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PlayStation 3, XBox 360 and the digital home

Playstation_3_1 The arrival Friday of the long-awaited PlayStation 3 is expected to provide a badly needed boost to consumer-electronics giant Sony, which has been off its game since the end of the 20th century. Based on surveys conducted in June, Interpret, a media research firm, estimated that nearly 9 million people in the U.S. would buy a Blu-ray equipped PS3 at full price, with total sales of 36 million. Rival consoles from Microsoft and Nintendo are each projected to sell around 20 million.
Interpret presented its survey findings Wednesday morning at an invitation-only briefing and panel discussion inside the LA Times' mothership in downtown Los Angeles. More interesting than the sales projections, at least to me, were the observations about gamers' behavior. Although game consoles are found only in about a third of U.S. homes, more than half of U.S. consumers between the ages of 13 and 54 play video games in some fashion, whether it be on a console, a PC or a portable or a cellphone. These gamers -- and particularly XBox gamers -- are early adopters and heavy consumers of media, according to Interpret. And these two qualities are likely to put gamers in the forefront of the shift to the much-hyped but little-realized "digital home," that is, a place where media loses its traditional associations with specific devices and distribution methods. (Movies and TV shows flow over the Internet and home networks to all manner of devices, photos and MP3s beam from PCs to TVs -- you know the drill.) Both the PlayStation 3 and the XBox 360 are designed to become hubs of this digital home, conveying movies, TV shows, music and photos from the Net or a home PC to the TV.
Interpret urged the entertainment industry to view its findings optimistically. Making titles available in new formats and through new media will add to existing sales, not cannibalize them, said Jason Kramer, Interpret's chief strategy officer. He pointed to one response in particular by the 54% of those surveyed who said they played videogames. About 30% of them, representing about 27.5 million Americans, strongly agreed with the statement that "the more options there are for watching a TV show or movie, the more likely I am to actually see it." Only about 11% strongly disagreed. That's not so surprising, really. These folks are such active consumers, they're more likely to tune in when they can control the schedule. The new generation of consoles will give consumers more power to control when and where they are entertained; companies that do not accommodate them risk being swept aside by those that do.

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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