Monday's ESPN-Xbox deal brings the Xbox back into view as a competitor in the Internet connected set-top box battle that has further heated up since the Google TV announcement. Oddly, the Xbox, a device that is already in millions of homes, is often left out of the convergence conversation. To me it seems like a sleeping giant, with many early advantages that should put it squarely on the connected STB map.
The Xbox, as a gaming device primarily, clears the hurdle many set-top boxes stumble over - getting people to buy an additional box. Gaming has allowed it to build a user base of early adopters who are eager to consume online video. Its controller is an easy to operate wireless gamepad, great for navigating screens and menus quickly. In addition, the gamepad has an attachable keyboard the size of a mobile device for easy searching of vast libraries of content.
The ESPN deal is a coup for Xbox, giving Xbox Live Gold members free access to sought after ESPN.com VOD content and over 3,500 live ESPN3.com sporting events, which includes many World Cup games, in addition to college basketball, college football, MLB, NBA, tennis, golf, and much more. However, ESPN is another addition to an already impressive library. Xbox has had 1080p HD streaming video for its large video marketplace, for over a year now. It was the first non-Roku device with Netflix Watch Instantly and was immediately well received by its users. Xbox also offers access to Amazon's large collection of VOD. No doubt other deals will follow.
The two main problems it does not yet solve are open access to the Internet and true synergy with cable content; these are two issues Google TV is attempting to tackle. Nonetheless, the ESPN partnership hints that Microsoft - with its money, clout, and experience, has ambitions to position the Xbox as an even bigger convergence competitor. In addition, if the Kinect, "Wii-killer" technology does in fact take off for family use as Microsoft hopes, the Xbox could find its way into even more living rooms, further enhancing Xbox's potential in the convergence race.
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