Microsoft strikes Xbox deal with Netflix, PS3 counters with own video service

July 16, 2008 - Microsoft has struck a deal with online video rental service Netflix that will enable the Xbox 360 games console to stream Netflix movies to users in the US, while Sony has revealed its own plans to enable PS3 owners to download and watch videos via their console.

The deal, announced at the E3 show in Los Angeles, will give US Xbox 360 owners access to 10,000 movies and TV shows for viewing on their television from this autumn, joining the selection already available on the console's video store service. While Netflix's DVD rental library is ten times larger than that of the streaming service, the company reportedly aims to add around 8,000 titles to the streaming service over the next 18 months.

"This generation of consoles will change the face of home entertainment more than any other generation before," said John Schappert, Corporate Vice President of Microsoft's interactive entertainment division. Sony clearly agrees, as it simultaneously announced its own video download service for US PlayStation 3 owners, available as of yesterday through the Playstation Network and offering movies and TV shows for download, as well as allowing content transfer to a PSP handheld console and sporting a progressive downloads feature to enable users to start watching a movie while it is still downloading.

TV episodes start at US$1.99 and movies cost from US$2.99 to US$5.99 to rent and US$9.99 to US$14.99 to buy. Sony's content partners for the service so far include Fox, MGM, Sony Pictures, Lionsgate, Warner, Disney, Paramount, Turner and Funimation.