One of the most popular uses of a television set has been that of a screen for the gaming consoles. TV is now beoming a lot more connected with these consoles, or should we say the new generation internet-enabled gaming consoles are now beginning to recognise the power of being connected to a device like the television set.

When you have a programmable micro-chip and gigabytes of storage on any device connected to a TV, it is really difficult to resist using it as a “record and playback” device (Like a PVR/DVR) or even as a conventional set-top box to receive broadcast signal. All the popular consoles have been trying to get into this game for quite some time now to see how can they get a larger share of “screen time”.

Just yesterday at the E3 Gaming Industry Trade Show in LA, Sony reveleaed a double-capacity PS3 (meaing it has a 160 gig of hard-disk) and launched a service that allows users to download and rent movies- a direct competition to a device like Apple TV. This is not the first entry into Video-on-demand by a gaming console- however it appears to be one with some really valuable content on offer- given Sony’s own access to such assets.

Late last year, British Telecom partnered with X-Box for their TV distribution service where viewers are able to watch the BT’s video-on-demand content. Nintendo’s Wii jumped on the bandwagon this April announcing that the BBC IPlayer would be available on the consoles. Both these efforts mean that the owners of Wii and Xbox consoles can now watch TV programming- on demand- whenever they want to- on their TV sets and not on their computer screens. The open-ness of the availability of this on-demand content, however, is not that great. It is usually limited to one or two content-providers.

It is not just the gaming console’s partnerships that are helping define TV of the future. There are some really interesting examples of how TV content is being integrated into various games. Grand Theft Auto (developed by a company called Rock Star Games) has special TV content within their newest version of the game where gamers can, for example, watch Ricky Gervais perform live in a virtual comedy club in the Liberty City. Ricky did a special recording for the game.

Gran Tourismo 5 (developed by Sony), the most popular racing game in the world with over 50 million copies sold worldwide, has a virtual TV station of its own, called GT TV. BBC cracked a deal with GT TV last year whereby 40 episodes of Top Gear were made available to watch on GT TV. GT TV also features news and updates from the motoring world.

All this is really exciting. What is even more exciting is to think about the implications of it all on the advertising and media industry. Integration of the content into games is a really clever way of getting the consumers to pay for the content. In terms of advertising time, all of these efforts seemingly fragment the distribution of content, and hence perhaps the buying of advertising. However, it is not really difficult to imagine a situation where a “central” ad-server sells time on all of these platforms- much like the Apple’s patented technique, and major media owners like BBC, Sony reserve the right to sell and place advertising into their content themselves. Not different from what the TV stations do now, regardless of which cable or satellite platform distributes them (Sky, Virgin etc).