Netflix on PS3 gets 1080p, adds 5.1 surround, loses the disc
Microsoft thought it was being all fancy with its dashboard update that brought search to Netflix, but Sony has just announced its own competing update to Netflix streaming. Starting October 18, you'll be able to access Netflix …
Context & Ripple Effects
Netflix on consoles has been an uneven race since 2008, when HD Netflix streaming arrived on Xbox 360 first and left the service caught between Microsoft and Sony in their living-room contest. Sony's console already leaned on HD credentials elsewhere — 1080p upscaling via firmware in 2007 and a European HD DVR — but its Netflix experience required a streaming disc and topped out below what Xbox 360 offered.
The October 18 update closes that gap in one move: a native application with 1080p video, 5.1 surround, and no disc. It lands two days after Sony put its $400–$1,400 GoogleTV hardware on stage in New York, making this week a coordinated push to position PlayStation hardware as the center of streamed video.
First-order effects
- PS3 owners get disc-free Netflix streaming at 1080p with 5.1 audio starting October 18, matching or exceeding the Xbox 360 experience that had been the format's showcase since 2008.
- Microsoft loses its differentiator: the dashboard's Netflix search advantage is answered by a Sony client that removes friction (the disc) entirely rather than adding features on top of one.
Second-order effects
- With both major consoles now offering comparable Netflix clients, Netflix gains negotiating leverage over Sony and Microsoft — neither can claim exclusive value from the relationship, so licensing terms and placement become the battleground.
- The update strengthens the PS3's pitch as a single box for discs and streams, pressuring Microsoft and standalone streaming boxes (including Sony's own new GoogleTV devices) on price-per-capability in the living room.
Third-order effects
- Consoles are consolidating into general-purpose set-top boxes, with Netflix functioning as table stakes across platforms rather than an exclusivity lever — a shift from winning the living room through exclusives to winning it through integration quality.
- If parity becomes the norm, the next competitive layer moves upstream to resolution and audio formats, where each vendor will race to certify new formats first to re-establish differentiation.
The trend: Console makers are converging on the same third-party streaming services as the core of their living-room strategy, turning Netflix from an exclusive win into shared infrastructure whose quality of integration decides the contest.