Add Nintendo (OTC: NTDOY) to the list of companies challenging cable operators and satellite TV providers for control of the user interface that subscribers rely on to access video programming.
Nintendo's Wii gamepad with TVii app. (Image source: BusinessWire)
The company took the wraps off of its new Wii U gaming console on Thursday-a $300 device that will come with an application called TVii that Nintendo says could be used to navigate live TV programming with a touchscreen controller included with the console. Nintendo says it has an integration deal with TiVo (Nasdaq: TIVO) that will allow Nintendo users to access programming stored on a DVR, along with online video content from Netflix (Nasdaq: NFLX), Amazon (Nasdaq: AMZN) and other providers. The console will hit retail stores on Nov. 18.
Nintendo hasn't yet detailed how it will be able allow console owners to watch live cable or satellite TV programming. Microsoft (Nasdaq: MSFT) lets Comcast (Nasdaq: CMCSA) and Verizon's (NYSE: VZ) FiOS TV subscribers access live programming through apps built for its Xbox 360, and subscribers with a Kinect camera can use voice and motion controls to channel surf. But the amount of content Xbox owners can access is constrained by TV Everywhere rights deals that operators have with programmers. For example, FiOS customers can only access 26 networks through the Xbox. The bulk of the networks available are owned by Time Warner Inc. (NYSE: TWX), including HBO, CNN and Cartoon Network.
It is clear, however, that cable operators and satellite TV providers will face increased completion for control of the user interface that viewers rely on to watch video programming. In addition to gaming consoles, operators face increased competition from connected TVs from Samsung (OTC: SSNLF.PK), Sony (NYSE: SNE) and other CE manufacturers, and over-the-top video set-tops such as Google TV and Apple TV.
While Microsoft, Nintendo and other technology companies could compete with cable operators by selling advertising through their user interfaces, the key for distributors is ensuring that customers continue to subscribe to expanded basic and premium cable channels. Time Warner Cable (NYSE: TWC) CEO Glenn Britt may have described the impact that competing UIs could have on operators best during the company's second-quarter earnings call last month. "If somebody wants to use the interface that comes with one device or another, that's fine. We're going to continue to have ours. If there's a better one--as long as they buy video from us--I don't care."
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