Analysis & Opinion

‘Me too’ thinking endemic at E3 as console and smart-TV manufacturers eye up each other’s turf

The distinction between games consoles and connected TVs became even more blurred at this week’s E3 computer and video-games trade show in Los Angeles. Even Nintendo has given up on the notion of a traditional games-only machine. Its soon-to-be-released console, the WiiU, might principally be about playing games, but it can also be used as a media hub.

Microsoft’s E3 presentation illustrated the continued transformation of its Xbox 360 from a mere games console to a fully fledged set-top box. It has become accepted wisdom to say the Xbox 360 is Microsoft’s attempt to win the living room. But with the announcement of SmartGlass, Microsoft appears to be aiming to own not just the living room, but also a user’s wider entertainment experience.

Xbox SmartGlass screenshot

Screenshot of Xbox SmartGlass app

SmartGlass offers something akin to Apple’s Airplay service and a new, improved remote app.  It also offers an advanced second-screen service, which pushes additional information about the program being watched to a user’s tablet or smartphone.

None of these features is a major innovative step in its own right, but Microsoft appears to be bundling them into a single service, something that no one else is doing yet.

Across the Pacific at Computex in Taiwan, the other component of Microsoft’s plan to establish itself as a major player in entertainment was taking shape.

Asian PC manufacturers announced a host of Windows 8 tablets and hybrid laptops at the event. It is likely that SmartGlass will work on these devices out of the box and could provide a compelling reason for many Xbox 360 owners to buy a Windows 8 tablet.

With the WiiU, Nintendo finally seems to have embraced connectivity and the importance of offering a more rounded device, one equally at home offering media services, although several years after its rivals. And the WiiU’s Miiverse social network pushes that side of games consoles to a new level.

The WiiU will be launching with Netflix and Hulu preinstalled; it says much about the industry that these apps have become the bare minimum that must be offered today. What is more interesting is Nintendo’s announcement at E3 that its innovative controller – a tablet-like device with traditional games controls on the side – would double as a TV remote when the WiiU was turned off. The aim of this feature appears to be to keep the WiiU controller in the hands of the user, something the previous Wii failed to do. It was all too common that owners simply stopped playing with the device.

This new controller already promises to offer second-screen gaming. Users will be able to play a game using the screen on the controller while the TV is in use, or interact as a second player with the first player in a complementary rather than direct manner. If Nintendo is bold enough, it could even begin to offer a TV second-screen experience, one that enables users of the controller to interact with the content being watched.

Smart TVs already offer a wide variety of OTT video, and in some cases pay-TV services, but announcements at E3 this week were a shot across the bows of the games-console manufacturers.

LG and Samsung announced that their respective cloud gaming services, OnLive and Gaikai, would be launching on their smart-TV platforms. This is a major step forward for both services, because being on the TV is paramount for their success. There is also a significant reduction in costs for the user, who no longer has to buy a separate device to access these services. Consoles’ long-term monopoly on premium gaming on the TV is over.

But this is not where the war will be won. Casual gamers – those who regularly play the likes of Angry Birds and Farmville, and who want gaming just to be something they can easily drop in and out of – far outnumber core gamers. It is this all-important information that Microsoft, Nintendo and Sony seem to understand and are building their strategies around. And they’re doing so far better than LG and Samsung, much to the chagrin of their traditional audiences.

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