Microsoft Said to Add Comcast, Verizon Pay TV to Xbox Live
Microsoft Corp. plans to offer online pay television service from Comcast Corp. (CMCSA) and Verizon Communications Inc. (VZ) through Xbox Live, in an bid to channel more entertainment to its video-game console, people with knowledge of the situation said.
Context & Ripple Effects
Microsoft has been building toward this for years: it put ESPN programming on Xbox back in 2007, and through 2011 the rumor mill churned over an Xbox LIVE Diamond subscription TV service floated ahead of E3 and a Zune-branded video streaming subscription reported in July. The Bloomberg report — sourced to people with knowledge, so still unconfirmed by the companies — would be the biggest step yet: live pay television from two of the largest US distributors, Comcast and Verizon, delivered through Xbox Live.
If it lands, the deal matters because it moves the console from a games-and-streaming-catalog device into genuine pay-TV distribution, putting Microsoft between cable operators and their own subscribers' living rooms.
First-order effects
- Comcast and Verizon subscribers would authenticate their existing pay-TV accounts through Xbox Live, giving both operators a new screen for content they already sell and giving Microsoft a non-gaming reason to own an Xbox in the living room.
Second-order effects
- Other pay-TV operators face pressure to cut similar Xbox Live deals or sit out a device their competitors now reach through, while Sony and Nintendo are pushed to match the entertainment-hub positioning rather than compete on games alone.
Third-order effects
- If the pattern holds, the console competes directly with the cable set-top box, and carriage negotiations start treating connected devices as standard distribution endpoints — shifting leverage toward whichever platform aggregates the audience.
The trend: Game consoles are becoming general-purpose living-room entertainment hubs, pulling pay-TV distributors onto connected devices wherever their subscribers already are.