Use game consoles to connect TV, Internet

— -- Microsoft on Tuesday strengthened the case for its Xbox 360 video game system to be a star of the digital living room, an all-in-one entertainment set-top box.

The console system was the first game system to incorporate a Netflix streaming app. Now it's bringing in live TV from Verizon FiOS and the Epix movie channel to complement current offerings of ESPN and Hulu Plus. And all that content can be accessed with your voice using the Kinect motion controller.

The move by Microsoft, along with similar ones by rivals , comes as many shoppers this holiday season are looking to take their home entertainment center over the top.

They've grown accustomed to watching video wherever and whenever they want on whatever device they choose. Yet they still cherish the kick-back-and-relax viewing experience provided by the old, reliable home TV.

So, increasingly, viewers are incorporating Netflix and other Internet-based streaming and on-demand content providers, such as Amazon and Hulu, with current broadcast, cable and satellite services to tailor a home TV experience all their own.

"What we see is people adding streaming video and maybe cutting down on the premium service, or finding some way to save some money on the pay-TV side," says Norm Bogen, analyst at market research firm In-Stat.

Just a few years ago, connecting a PC to your TV used to be the chief way to get that over-the-top experience. Now, nearly as many people use a game console as a PC to make their TVs "smart," an In-Stat survey found. "Driving it is the consumer (appetite) for a wide variety of content on demand and the availability of devices that allow them to get that content on their big-screen TV."

This holiday season could be the perfect time to bring these new services to your living room, because there are bargains to be had on Blu-ray players, streaming-media set-top boxes, smart TVs and even video game systems, such as the Xbox 360, that can be a conduit for TV, movies and other Internet content.

"Price points have all come down," says Shawn DuBravac, chief economist and director of research at the Consumer Electronics Association.

Depending on the model, Internet-connected players can be found for up to 50% off the suggested retail price. Models that use ethernet connections such as LG's Network Blu-ray Disc Player, regularly priced at $119.99, is available for $67.99 on Amazon.com. And Best Buy has a Dynex model with built-in Wi-Fi for $59.99. The entry-level $49.99 Roku set-top box costs $10 less than last year. Video game systems and new smart TVs are discounted, too.

Also fueling the over-the-top phenomenon is the growth in homes with high-speed broadband Internet connections and wireless networks. Some 59% of U.S. homes have them, up from 54% in 2010, CEA reports. With a wireless home network in place, you don't "feel the pain" when you connect a new device, DuBravac says.

Electronics makers, video game companies and Internet-based services are competing to find ways to get more programming to consumers.

While smart TVs may be the easy choice for those in the market for a new set, options abound for those looking for less-expensive ways to upgrade their entertainment options.