Just received our XBox 360 today at the office, which has not exactly increased productivity, but since the dev team just hit a large milestone, it's a good release for everyone. Ignoring the obviously powerful game playing aspects of the machine (amazing graphics, fairly good games), what jumped out to me was that the 360 has made massive steps towards becoming the first legitimate cable bypass box. This means that companies could create viable video distribution models by going through the Internet rather than over the broadcast, cable or satellite services.
With a 20G replaceable hard drive, a powerful piece of hardware, HD capability, reasonable pricing, and tens of millions of sales guaranteed, it seems clear that the 360 will be an incredible destination device for online video. Because you can download directly to the machine as well as connect through a PC, it offers the best of both worlds from a capacity and connectivity perspective.
Unlike other digital media adapters which have not had either the horsepower, the volume, or the HD options, this box will begin to be a viable distribution opportunity for content providers by the end of 2006, especially if MS opens up the system to outside providers, as Ray Ozzie's memo forecasts. Depending on what Sony does with PS3, these new devices will open up a new competitive threat to today's service providers, as well as provide distribution opportunities for smaller content providers locked out of traditional cable and satellite boxes, and it will be a huge accelerant to the HD marketplace. It's going to be an exciting 2006.