Multimedia content, such as Netflix streaming services, and popular games with online components, such as Call of Duty and Madden NFL, are driving households to connect their game consoles and creating a new foundation for future growth in online video, according to international research firm Parks Associates. The firm's new report Connected Game Console Update finds 64% of U.S. broadband households with an Internet-connectable game console have it hooked to the Internet, a major increase from 2007, when only 25% had their next-gen console connected.

"PlayStation 3 and Xbox 360 have higher connectivity rates among the current generation of consoles, showing the power of multimedia offerings and popular game franchises in getting gamers online," said Pietro Macchiarella, Research Analyst, Parks Associates. "Despite the Wii's wireless capabilities, it has been less successful in getting users online due to less compelling online games and multimedia content. However, with its large installed base, it still is a significant player."

Parks Associates forecasts households will connect more than 260 million game consoles worldwide to the Internet by 2015. Broadband connectivity enables new business models for game consoles, according to Macchiarella. Both Microsoft and Sony are now leading providers of premium Internet video content and derive a large share of their gaming revenues from their digital video outlets.

"Location and high penetration of game consoles make them ideal devices for distributing digital content," he said. "Our Digital Media Evolution II found 65% of U.S. broadband households with a game console have it in their living rooms, where they loathe adding another black box. Therefore, consoles are the perfect Trojan horses in the competition for content distribution."