It may be a while before game companies pose a serious threat to cable giant Comcast Corp. or satellite service Dish Network. Services such as HBO Go and ESPN, in fact, require cable subscriptions to work on the consoles.
And game consoles aren't the only devices impinging on cable's turf. Most new Blu-ray players, television sets and tablets come with services such as Netflix and Amazon Instant Video built in.
To compete, the game companies are trying to do with digital video what they have always done best: make it interactive. An upcoming "Sesame Street" app for the Xbox will use the console's Kinect camera to scan a child's clothing and have a character on-screen wear the same color. And playoff games, they say, are no longer meant to be enjoyed while simply lounging on a recliner.
"With our sports applications you can look up live stats or, during recorded games, zoom the camera around the field," said Jack Buser, senior director of PlayStation digital platforms. "This points to the future of how we'll enjoy and interact with our media."
Of course, the more broadly the game consoles try to appeal, the bigger the risk of losing their earliest, most loyal audience. To keep them excited, Microsoft showed off a number of big-budget games at its news conference, including "Resident Evil 6" and "Gears of War: Judgment." Sony was expected to do the same at its own event Monday evening.
"We have to continue to make Xbox the best platform for games," said Yusuf Mehdi, chief marketing officer for Microsoft's interactive entertainment division. "But even the most hard-core gamer still watches TV."