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Sony's recent announcement that its PlayStation 3 console will soon act as a digital video recorder in Europe is little surprise to anyone following the industry. It's long been believed that the PS3 and Microsoft's Xbox 360 could act as DVRs. The real question is how this move will affect a soon-to-be crowded DVR marketplace. TiVo, the best-known DVR brand, has struggled financially as cable and satellite distributors released their own recorders. Although its future may be a bit brighter thanks to a recent licensing deal with Comcast and the potential of a renewed DirecTV contract, there's more competition for TiVo than ever — and from the unlikeliest of places.


Services like iTunes, working with the Apple TV set-top box, and Xbox 360's Marketplace, offer a limited but growing library of TV shows and movies. Netflix, the DVD rent-by-mail service, is hiring hardware engineers. Amazon, currently a TiVo partner, is rumored to be working on a media-playing device of its own. And more networks are beefing up Web-enabled viewing like ABC's HD-like experience and ESPN 360. To top it off, there's the enigma that is Vudu, a set-top box that's built to replicate Netflix's level of service by offering a host of first-run, DVD-quality movies.

What TiVo has going for it is its ability to record live broadcasts, much of which never turns up on DVD or online video libraries. It also has mainstream appeal compared to Web-video downloads or multitasking game consoles and personal computers. But increasingly, it's going to be hard to convince consumers to buy a separate gadget and make room for it in their living room, when the devices they already have — PCs, game consoles, and even portable media players — can provide the same basic service of delivering video.

Microsoft, in particular, is trying to market the Xbox as a set-top box replacement, especially for phone companies trying to deliver video over Internet connections, a technology known as IPTV. That, more than anything, is what's likely spurring Sony's DVR move — and with Sony, Apple, and Microsoft sparring over the living room, there's going to be little room left for TiVo.