Nintendo ready to stream films and TV through Wii consoles

Console players race to establish themselves in home entertainment market

Nintendo has become the third video game giant to strike a deal with the US online rental firm Netflix, as consoles look to challenge traditional forms of in-home entertainment.

The Japanese group follows rivals Sony and Microsoft in sealing an agreement with Netflix, the US equivalent of Britain's Lovefilm.com, to stream movies via its best-selling Wii console.

Reggie Fils-Aime, president of Nintendo in America, said: "The Wii console is the social hub around which friends and family members gather to play games and have fun. Soon both new and longtime Wii owners will enjoy the benefits of Netflix."

This is the latest move by games companies to position consoles as the centre of home entertainment. As well as its agreement with Netflix, Sony's PlayStation 3 comes equipped with a Blu-ray player and has an online movie store. Microsoft's Xbox 360 also has its own movie store.

Marie Bloomfield, broadband media analyst at Screen Digest, said: "The consoles will be hoping that the more bases they cover, the wider their appeal, and will look to overtake the traditional devices in the living room." She added: "The rise of broadband has helped as it allowed the companies to deliver content to the consoles."

Netflix said yesterday's deal would "extend the reach of content streamed from Netflix farther than ever before, thanks to the mainstream popularity of the Wii console". It added that the Wii, which sold more than three million units in the US last month, remained the fastest-selling games console in history "and reaches more consumers than any other device that currently supports streaming movies from Netflix".

Anyone who pays more than $8.99 a month (£5.50) subscription to the rental group will be able to watch movies and television shows over the internet for no extra charge from the spring, providing they have a broadband connection.

Netflix, the largest DVD mail rental service in the US, has signed deals with manufacturers including Panasonic, Samsung and Sony to put the internet streaming capability into television sets. While no such deals have been struck in Britain, Lovefilm's chief executive, Simon Calver, is excited by the prospect of new ways to stream movies and television programmes to customers. "Netflix's deal with Nintendo is a great example of how many digital opportunities and platforms there are to deploy Lovefilm's services in the UK," he said. "At Lovefilm we have already struck deals with big name consumer electronics brands for internet-enabled hardware and are, of course, in discussions that will lead to some very interesting developments over the next 12 months." He declined to name which companies he is talking to.

Microsoft was the first to sign a movie-streaming deal for its Xbox 360 with Netflix in July 2008. Sony followed in October last year. There has also been speculation it is in talks with Apple over a deal for the iPhone.

Sony's key gaming title still stuck in the pits

Sony has delayed the launch of the much-anticipated fifth instalment of its Gran Turismo motor racing game. It blamed development issues and said there was no indication when the title, on which it has lavished $60m so far, will be released. The hold-up is bad news for the Japanese company, which released Gran Turismo 4 for the older PlayStation 2 console five years ago.

The software developer Polyphony Digital gave fans a sneak preview of Gran Turismo 5 when Sony unveiled the PlayStation 3 in 2006. It announced at the Tokyo Game Show in September that the game would be released in Japan in March, and was slated for release in Europe and the US soon after. Sony said the launch had been postponed because of "production-related matters" and apologised for any inconvenience. No revised launch date was set.

The Gran Turismo series has sold 53 million copies worldwide since the first instalment in 1997, and previews of the new version had fans drooling over 1,000 beautifully rendered cars and 20 race tracks. Polyphony last released a preview disc, called Gran Turismo 5 Prologue, in April 2008.

Piers Harding-Rolls, an analyst at Screen Digest, said: "There is strong competition among car games but it is still one of Sony's biggest franchises."