Nintendo Wii to Add Netflix Service for Streaming Video
SAN FRANCISCO — Owners of the Nintendo Wii can finally stop waving their video game controllers in the air and sink back onto the couch. — Nintendo is bringing Netflix's online streaming video service to its Wii gaming console …
Context & Ripple Effects
This closes a loop opened over a year earlier, when Nintendo first said it would offer videos on the Wii, and lands weeks after Netflix signed five more consumer-electronics manufacturers to carry its streaming service. The company's April 2009 push into game console platforms made the Wii the conspicuous holdout among the big three machines; today's announcement removes that gap.
The strategic frame comes straight from Netflix itself: CEO Reed Hastings has spent months positioning streaming as a disruptive threat that he expects to make cable obsolete, and every additional device — a black-box player unveiled in September 2009, now the best-selling console in America — widens the pipe past the pay-TV bundle. The Wii's massive install base makes it less an app port than a distribution coup.
First-order effects
- Wii owners get instant access to Netflix's streaming catalog on the largest installed base of any current console, no new hardware purchase required.
- Nintendo gains a marquee non-gaming application that keeps the console relevant in living rooms between game releases, at no content-licensing cost of its own.
Second-order effects
- Sony and Microsoft face renewed pressure to tout their own console streaming credentials, since the differentiator shifts from games alone to which machine anchors the household's entertainment stack.
- Set-top box and consumer-electronics makers competing for the same HDMI port now contend with consoles that arrive already in tens of millions of homes — a channel Netflix is signing up manufacturers to serve faster than they can build dedicated devices.
Third-order effects
- If Hastings' cable-obsolescence thesis holds, consoles evolve from game machines into general-purpose streaming hubs, and the contest for the living room becomes a battle over whose app shelf the viewer opens first.
- The pattern pushes Netflix further from its DVD-by-mail core toward device ubiquity as the moat, rewarding whoever signs the most screens rather than whoever ships the best single box.
The trend: Game consoles are consolidating into all-purpose streaming-video appliances as Netflix races to embed its service on every screen in the living room.