September 26, 2012
Cable Providers Could Give Video Game Consoles New Competition
Peter Suciu for redOrbit.com — Your Universe Online
For roughly the last decade the video game console arena has essentially consisted of three players: Nintendo, Sony and Microsoft. Over the last 25 years there have been some shakeups as companies such as Sega have transitioned from hardware maker to software developer, and various startups have attempted to break into the market.
On the horizon already are startups that could seriously disrupt the market, as Ouya looks to bring out a $99 console that would provide content from cloud-based services such as OnLive. But this week a new report from Bloomberg suggests that competition could also come from cable and Internet providers
While Verizon, AT&T, Time Warner Cable and Comcast — among others — are typically rivals for delivering content to the living room, these companies recently reached an agreement to work together. This coalition could now be set to take on the big three with a digital gaming service that would allow customers to play games directly on their TV sets without the need of a console.
This approach to delivery isn´t actually new. There were attempts to offer game channels over cable as far back as the 1980s, and Sega actually launched a cloud-based — before the term cloud-based was ever conceived or considered — back in 1994. The Sega Channel, unlike this current reboot of cable delivery of gaming software, did require that users had a Sega Mega Drive/Genesis console. But the system, which ran until the middle of 1998 did deliver games via Time Warner Cable and TCI, which was later acquired by AT&T.
Everything old is new again as they say. And in more ways than one, as the cable providers aren´t the only companies looking to deliver games via the cloud.
In addition to OnLive and Ouya, major publisher Electronic Arts is looking to take its Origin service — which already provides a digital download service for PC-based games — and provide streaming content directly to the TV. It was also reported by Bloomberg that the cable providers would likely be looking to EA and other top publishers to provide content.
This isn´t really a surprise as the publishers are already known to hedge their bets by providing content for Nintendo, Sony and Microsoft — with fewer examples of exclusive content for a particular system. So it is conceivable that EA could provide titles to the big three console makers, the cable providers and still work on its Origin service. Clearly no one knows how all this will play out, especially as cloud-based services continue to evolve.
In the meantime, the cable carriers are turning to startups including Playcast Media Systems, CiiNOW Inc. and Agawi to provide software to speed delivery of real-time gaming and to avoid latency — an issue that plagued online gaming in the pre-broadband days.
The other interesting consideration here is that the cable providers are looking to take on the console makers as the console hardware are increasing becoming content delivery systems well beyond games. Microsoft´s Xbox has deals that provide content from OnDemand while Sony´s PlayStation is currently in a partnership with DirecTV.
Both of these systems, and reportedly Nintendo´s upcoming Wii U, provide content from a variety of other sources including Netflix — obviously disrupting the traditional system where cable provided TV shows and game systems were for games. In recent years the role of the box — regardless of who made it — has changed, and the path seems to indicate that one box in the living room could provide a plethora of content options including games, movies, TV shows and web access.
The numbers seem to be in favor of the cable and Internet providers as well. Verizon reportedly has 4.47 million TV subscribers and Cox had 4.66 million.
This new set top box could even make a universal console platform a reality. Currently it is impossible to play the same game with friends who own different systems. Very few games have been cross platform to date, but this could change. The cable providers would likely create a generic controller, but there is also talk that smartphones could become controllers with such systems.
Finally, while it might take some time to get this rolling in North America, the concept of cloud gaming is already very much a reality in many countries, including Portugal, France, Singapore and South Korea. The cloud services just need to gather.