The Trojan Horses Have Been Activated

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Dave threw the gauntlet down back in 2006(!) when he suggested the Xbox was a Trojan Horse, designed to be activated in the future as a central device in the connected living room. Today, that reality has, in many ways, come to pass. According to Microsoft exec Russ Axelrod, more than 20 million Xbox homes are connected to Xbox accounts, and of the total time users spend on their Xbox consoles, 44% is dedicated to non-gaming activities. Analyst firm SNL Kagan points out that in addition to those 20 million Xbox-connected homes, there are also 30 million homes in North America connected to PlayStation Network accounts. That’s 50 million households with connected game consoles. Not a shabby number considering there are roughly 120 million households across the entire US.

Yet despite the growth of connected platforms, the world of distributed entertainment is still limited, at least where TV is concerned. The Xbox can be used as a set-top, but Microsoft has shed its ambitions to become virtual MSO thanks to the high cost of content licensing. And while cable industry veteran Jeff Baumgartner thinks that change is coming, there are still a lot of messy battles to be fought where streaming rights are concerned. The soldiers have emerged, but the war for the connected living room is far from over. It may be several years yet before the victors are decided.

20 thoughts on “The Trojan Horses Have Been Activated”

  2. How do they fit the all Greek soldiers inside that little box?

    (And shouldn’t the Greeks only really activate the Trojan horses in Germany in order to fight their way to a better deal on debt relief?)

  3. I love that my Xbox works as an extender for WMC, so I can watch live TV streamed from my HTPC on it. I didn’t even know that it did this until I bought it, so that was a pleasant surprise. I’m still not sure why WMC seems to be the red-headed stepchild of Win7, it’s a really excellent application.

    With the Kinect voice commands for Xbox, I have to say it’s pretty close to the perfect all-in-one box. Though it’s supremely annoying that you have to have a Gold subscription just in order to watch Netflix on it.

  6. What about Wii’s? I know as many (maybe more) people who have a Wii as have an XBox or PS3, and all of them use it to stream Netflix.

    I was surprised that the numbers for PSN were higher than XBL, but I noticed that the article said “…90 million accounts activated worldwide, with 30 million in North America.” That makes more sense, since there have only been 62 million sold. :-)

  7. We stream Netflix on the Wii much more than we game. I would say something like 80% streaming vs. 20% gaming.

    I wish Amazon VOD would add a channel to the Wii. Right now, we have that on the original Roku that we moved to the bedroom after Netflix became available on the Wii.

  8. Phillip- The Wii was probably worth a mention, but its offerings are still limited. Note, though, that the original article also says 50% of Netflix use is on game consoles. I’d be curious to know how that breaks down across the Wii, Xbox and PSN.

  9. Yeah, I have a feeling a lot of folks watch Netflix on the Wii (even though it maxes out at 480p). As for me, my Xbox 360 is in the closet at the moment – I find it more efficient to do Netflix and VOD from Roku or Apple TV and the FiOS TV app is something of a proof-of-concept at the moment. But Microsoft is beating Sony in bringing content and apps to the 360. Conversely, I hope ESPN3 ends up on more platforms sooner rather than later.

  12. OK. I think I get it. The Greek soldiers have been miniaturized though some kind of HTML8 technology.

    When the tiny soldiers suddenly pop out of the Trojan horse, they set up a projector and screen in your living room, and project movies for you. Am I getting closer? If so, this could revitalize the Greek economy.

    (My real prediction here: with Microsoft, Apple, Google, Amazon, and even Verizon trying to get into the game, without anything like AllVid on the horizon, without a good broadband infrastructure for most households, and with the content companies unwilling to kill a good revenue source for a bad revenue source, OTT is going to continue to be a very balkanized and irrelevant market in the lean-back for at least the next couple of years. A thousand different boxes will bloom, all offering a subset of a thousand different services. Mobile is something different, but in the lean-back OTT will remain everyone’s hobby for a while cuz no one can generate critical mass…)

  14. @Dave/Chucky – broadband caps are exactly how they will “encourage” users to stay with them. THe numbers are fairly staggering – something upwards of 90% of FIOS and Uverse subscribers have both TV and broadband from the same provider and the numbers of the cable companies are in the 70s and higher. Once you drop one part of the service, there’s no longer any incentive to give you a good price on the other.

    @Mari – I was recently in Argentina and learned that the game device Trojan Horse may not translate worldwide. Argentina imposes a very high tariff on video games making them much more costly than they are in the US. So Argentine gamers use pirate sites to obtain their games and thus never engage in any online gaming – which makes a connected Xbox or PS3 a rare thing.

    I’m thinking Argentina isn’t the only country where gamers have gone this route.

  15. @Chucky – also, if I were a betting man, I’d lay odds that the bigger pay TV providers will add the bigger OTT services to their offerings to keep subscribers in place. They may even go so far as to work HBO-esque deals with Netflux and Hulu and Amazon, but just as likely that they will offer those services integrated into their EPGs in a way that Grandma can easily figure out.

  16. My PS3 gets significant use as a blu ray/dvd/VOD [vudu and PSN err SEN]. Over the course of a year I’d say non-gaming is more than 50%. Likely to increase as I moved it to the new projector set up in the basement.

  18. The total number of households is likely not the sum of the two consoles. I have no idea how many households have one, two or three consoles, but they make up some percentage of the the whole. I know at least four people who have both consoles in their households. It’s also likely that a good number of them have Wiis, as well.

    I have no idea how big the crossover numbers actually are, but it’s not hard to believe its enough that adding the two numbers together is probably not the actual number.

  19. Yeah, most of these studies are flawed in some way and I don’t usually take the percentages at face value. But hopefully what we can glean from this one is that non-gaming usage of gaming consoles seems to be on the rise.

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