Will Internet Browsing Make a Difference in the Console Wars?

For the first time in the history of game consoles, each respective console is truly stepping out of the role of simply playing video games on a TV.  With the launch of the Xbox 360, gamers were exposed to the Xbox 360 dashboard.  A gamers portal, if you will, which allowed for:

• Online/Video Chat
• Casual Game Downloads
• Game Demos
• Music Video downloads
• Music Player
• Digital Photo Viewer

and the list goes on...

With the recent announcement of TV and Movie downloading (including high definition), come November 22, the Xbox 360 continues to expand on the historical video game console capabilities in a big way. 

One glaring omission in this laundry list of features is the simple ability to browse the internet freely.  Microsoft has stated that the reasoning behind this is that the user experience is not optimal for browsing on a TV.  Why would Microsoft purchase WebTV if this was the case?  Certainly, Microsoft has a vested interest in keeping the PC connected to the digital living room, but that position may end up being the ball and chain that Sony, Nintendo, and perhaps even Apple use in this war for eyeballs.  Steve Jobs initially thought that video on an iPod was not an optimal user experience (too small of a screen/etc), but we now see how this initial position has changed in a big way.  The iPod with video and the popularity of the iTunes TV Show store recently influenced the decision to continue NBC's show 'The Office' for yet another season.

To Microsoft's point about the user experience - yes, it is true that surfing the internet with a controller is pretty darn painful.  The Sega Dreamcast attempted this and it was not pretty.  Three big things were missing from the Dreamcast TV web browsing experience:

• No high definition
• Surfing with an analog controller quite honestly sucks
• Mouse and keyboard don't fit all that well on a couch

Both the Nintendo Wii, and Playstation 3 will provide internet browsing from day one, but unfortunately it appears that both may not hit the mark.  The Nintendo Wii will not support resolutions higher than 480p, thus making it tough to read articles.  The one main advantage that the Wii has is the innovative controller.  Just as the Apple iPod 'wheel' makes it simple and easy to browse one's music library, the Nintendo Wii controller has the opportunity to truly make browsing the internet as easy as, well, using a TV remote.  Just point and click with the laser pointer.

The PS3 certainly has the high definition output capability, but surfing the internet with the Sixaxis, or a keyboard/mouse probably isn't going to cut the mustard either. 

Another argument against internet browsing is for security reasons.  Perhaps the browser could be isolated in the Xbox 360 in such a way that this would be a non issue.  Or perhaps a similar 'safe' image browsing capability, similar to the XBStream application could serve up RSS feeds in a safe and secure manner.

So with all that being said, will web browsing capability make a difference in the console wars?  Will it be popular on the Sony Playstation 3 and Nintendo Wii?  If so, will Microsoft change its position?