Broadband

Of the U.S. households with internet accounts, 40% of those who have access to broadband connections (cable modems or xDSL) have adopted it.  This rate of penetration is faster than that of the VCR.

Consoles are getting into the fray as well.  PlayStation 2 will not ship with a modem (although it can accept a third-party USB device) because a broadband add-on is coming next year.  X-Box will ignore traditional internet access entirely and ship with a 100 MB/sec Ethernet card.  A massive installed base of broadband-enabled devices will make online distribution of demos, levels and even full games mainstream (especially for the X-Box with its 8 Gig hard drive) and will allow developers to create whole new genres of entertainment (i.e., 11-on-11 multiplayer football, massively multiplayer X-Wing dogfights, etc.)

Mass-market Pricing