“Console Vendors & OTT Delivery: Let the Games Begin!” is the latest report from The Diffusion Group, a research and consulting team. Their 49-page report points to consoles like the Xbox 360 and PS3 as the future of on-demand video.

“Rising dissatisfaction with service value, the lack of flexibility implicit in tiered strategies, and a growing interest in watching on the internet video on the Television have combined to create a one-of-a-kind opportunity for alternative video services — an opportunity not at all lost on console vendors.”

“Microsoft and Sony know that today’s console gamers are perfectly suited for new TV offerings,” says Dixon. “The segment is dominated by males between the ages of 18 and 35 — a prized advertising demographic — with tiny sense of loyalty to their ‘local’ cable or telephone company. They’re also heavy viewers of on the internet video and quite comfortable spending money for online digital media,” says report co-author Colin Dixon.

The group predicts that 190 million households will have a video-ready console in their homes by 2012, and 80 percent of them will be connected to the web. They think that 75 percent of the connected will use video streaming services.

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