By Joseph White and Dawn Chmielewski
LAS VEGAS (Reuters) - What started out as a novelty offered by Elon Musk to Tesla (NASDAQ:TSLA) owners has turned into table stakes in the next generation of electric vehicles.
Automakers from Sony Honda to Hyundai are introducing ways at the CES 2023 technology trade show this week to reshape the in-car entertainment experience, including offering video games during the rides. They are positioning themselves to take advantage of the time people spend in their cars as a source of potentially lucrative, recurring revenue.
"This is a field which can be deployed very quickly," Dirk Hilgenberg, head of Volkswagen (ETR:VOWG_p) AG's CARIAD software unit, told Reuters at CES. "You could just host the third-party app for a streaming service, or generate joint platforms. You guarantee certain volumes, you guarantee certain revenue."
While car radios have been an entertainment staple in vehicles for decades, Tesla vehicles have reset consumer expectations with the ability to watch popular video streaming services, such as Netflix (NASDAQ:NFLX), YouTube and Hulu, while the vehicle is parked and charging.
In December, Tesla issued a "holiday update" to its software to add access to 1,000 PC games through the Steam platform.
Other automakers have followed suit. In October, BMW announced a partnership with AirConsole to bring casual gaming into its vehicles. Stellantis last year announced plans to add Amazon.com Inc (NASDAQ:AMZN)'s Fire TV for Auto to its new Wagoneer and Grand Wagoneer SUVs.
In Las Vegas, South Korean carmaker Hyundai Motor Co said it would use technology developed by Nvidia Corp, a company whose chips power PC gaming, to stream games in cars.
Nvidia's cloud-based game service, known as GeForce Now, would provide access to more than 1,000 titles from PC game stores such as Steam, as well as free-to-play games such as Fortnite. China's BYD and Swedish electric vehicle brand Polestar also are working with Nvidia.
Japan's Sony, the maker of the market-leading PlayStation video game console, on Wednesday at CES said its newly christened electric vehicle, Afeela, would be powered by the same Unreal Engine 3D technology used in video games.
Sony promised "best in class" movies, games and music, though it offered few details on the vehicle it is developing jointly with Honda Motor Co.
"In order to realize intelligent mobility, continuous software updates and high-performance computing are required," Yasuhide Mizuno, chief executive of Sony Honda Mobility, told the trade show.
The auto industry has been grappling with how to introduce these new features safely, and restrict use to passengers while the vehicle is in operation.
Tesla became the focus of regulators in 2021 following reports that one feature allowed drivers to play games on the cars' tablet-like touch screen. Tesla disabled the feature while the car was in motion.
Hilgenberg said Volkswagen is developing vehicles that can drive themselves on the highway or in traffic jams, which could give drivers and passengers more time to view videos or play games. But those vehicles will have safety systems that could shut down gaming or video displays to the driver if conditions made automated driving unsafe, he said.
Still, these are features that consumers are demanding, so VW is at CES seeking partnerships.
"In some regions, we will see people say, 'You don't have that? I'm not buying," Hilgenberg said. "We will see the content ... which is provided by software enabled functionality will be a decisive factor for buying."