Early this week, I wrote about how the Blu-ray drive in the PlayStation 3 is changing the video game business. Sony's console is built for gaming, but features like Blu-ray and online connectivity make it a home entertainment system in disguise. So is Microsoft's Xbox 360.

It's no secret that Sony and Microsoft are fighting to establish a footprint in the American living room. That's why they're both willing to lose money selling consoles - they think they'll make the money up on games, but also with online services and video on demand. For the past few years, however, both companies have gone out of their way to market their machines as game consoles, which only made sense. What self-respecting gamer is going to buy a movie machine?

All three companies fought for the family market during their annual presentations at the E3 industry conference. Microsoft made the case that its Xbox 360 is a full-featured home entertainment system, complete with the ability to download TV shows and movies, through a deal with Netflix. Sony announced its own movie service, and pointed out that its PS3 already supports the movie format of the future. Both showed impressive games, but the hardcore gamers who are waiting for them have already bought a console. Now they're fighting over the family audience.

So far, Nintendo has captured most of that audience - not only because the Wii is delightfully easy to use, but because the price is right: $250. And, to the despair of fanboys, Nintendo kept pushing its family appeal. Its new "Animal Crossing" game is like MySpace for the stuffed animal crowd. And "Wii Music" seems made for the younger siblings of "Guitar Hero" fans.

Nintendo has no broader home entertainment strategy. The Wii isn't meant for TV, movies, or music - just plain old games. And in an age of integrated entertainment, some analysts suggest it won't be nearly as appealing.

I don't believe this for a minute. For hardcore gamers, the 360 or PS3 are the obvious choices. But I think families will stick with the Wii. As we head into a recession, the Wii looks like a bargain - and Nintendo could easily lower the price without cutting into its profit. For many adults, renting movies through a game machine just sounds confusing - whether it actually is or not. And while Xbox Live is optimized for gamers, Nintendo's online service sacrifices ease-of -use for security features that make parents feel better about who their kids are talking to. These kinds of features are why Nintendo is winning this round of the console war - and why it will keep on winning for at least another year.

Robert Levine is the MOLI View contributing editor for Business and Technology.

At this time last year, Sony's video game business looked like it might take a beating. Sales of its PlayStation 3 lagged behind those of Microsoft's Xbox 360 and Nintendo's Wii. Sony's machine was more expensive - at least $400 compared to $250 for the Wii. And although the PS3 has more processing power than the others, few games have taken advantage of all the horsepower under its hood.

Now at the start of this year's E3 - the annual business conference that sets the tone for the industry - everything is different. Well, not everything: The Wii is still outselling the other machines, and Nintendo is still making more money than its rivals. But the PS3 suddenly looks like a good deal compared to the Xbox 360. This has very little to do with any difference in performance. At this point, most third-party publishers develop their PS3 and 360 games together, so any differences are minor. And though Microsoft has some impressive exclusives, including the "Halo" and "Gears of War" franchises, most analysts expect it to gain ground on its Redmond-based rival.

One reason the PS3 carried such a high price tag was Sony's decision to include a Blu-Ray player that could be used to view movies in that format. A couple of years ago, this seemed foolish - it doesn't do much for game play, there weren't many movies available and Sony was locked in a format war with Toshiba, which was promoting its HD DVD technology with help from Microsoft. Gamers didn't think the extra feature was worth the extra cash.

This winter, Sony won its format war - to the extent that Toshiba abandoned the format in February. Blu-Ray suddenly seems useful, if not quite necessary. And since video game console makers subsidize machines to make money on software, the PlayStation 3 looks like a bargain. It costs $400, while the most reasonable Blu-Ray player I could find on Amazon is going for $330. If you're in the market for a Blu-Ray player, you can get a next-generation video game machine for $70. If you're thinking about getting a Blu-Ray player, the idea of getting a next-generation game machine might push you over the edge. And if you're thinking of buying a video game machine and you're not sure which one you want, the PlayStation 3 fills two functions. (Perhaps most importantly, it's easier to justify spending $400 to a wife or girlfriend who likes movies.)

This won't hurt the Wii, which is a very different machine in a very different price range. (As I joke to friends, If you don't pick up a Wii for $250, you must just hate fun.) But it could cause problems for the Xbox 360. Microsoft does have some nice exclusive games, but Sony now has at least one exclusive hit in "Metal Gear Solid 4: Guns of the Patriots" and more on the way. Sony still lags in online features, but it is expected to announce plans to address that this week.

The video game business is once again a real horse race - great news for those of us who cover it. I'll weigh in again with a mid-week update on Wednesday. 

Robert Levine is the MOLI View contributing editor for Business and Technology.

If you repeat something often enough, people start to think it's true. That, more than any other reason, is why people seem to believe that Google follows its famous, unofficial motto: "Don't be Evil." As a branding exercise, the slogan was sheer genius.

Evil genius, that is.

When we talk about Google, we're talking about a company that controls much of the Internet and increasing chunk of the advertising business, as well as a staggering amount of data. Most of its information comes from Internet searches that don't have names attached, but could be guessed without much trouble. The company is extending its reach to street-level photographs, medical records, and genetic information. In a few years, Google may know more about you than you can remember yourself.

These days, however, Big Brother can't even take care of his younger siblings. This weekend New York Times columnist Joe Nocera wrote about what I'll christen "Kindergate" - the controversy over Google's changing childcare policy. On the surface, it seems like a typhoon in a teapot - a fight between members of the business elite over childcare perks in a country where many enjoy no such benefits. Dig in, though, and it's plenty disturbing.

As Nocera tells it, a Google employee named Susan Wojcicki decided to change Google's daycare system. At first, the "Kinderplex" was run by Childrens' Creative Learning Centers, but Wojcicki wanted to adapt Reggio Emilia - which sounds like a type of trendy cheese but is apparently a type of trendy education movement. You really have to read Nocera's piece for the details, but here's the upshot: "Parents who had been paying $1,425 a month for infant care would see their costs rise to nearly $2,500." (Usual disclosure: I write for the Times.)

From everything we've read about Google, the "best company to work for," according to Fortune, this doesn't sound realistic. But wait - it's worse. At a meeting to discuss the issue, company co-founder Sergey Brin said he was tired of employees who felt entitled to perks like "bottled water and M&Ms." This from a man who has a private jet. Journalistic convention compels me to note that a Google spokesperson denies that Brin said this, but I don't believe that for a minute.

What made this galling to many employees is that Wojcicki is Brin's sister-in-law, the person who rented the garage Google started in to him and co-founder Larry Page and the company's current vice-president for product management. Since Google's products do not (yet) include child care, one must assume that Wojcicki derives much of her authority from personal connections. At a public company, that's not good. At one of the world's biggest public companies, it's a minor scandal.

Google spokespeople and other writers have questioned whether this very minor scandal is worth an article in the Times, much less one that ran on the front page. I'd ask another question. After seeing how Google handles its internal affairs - which seem to be run partly by the whim of the co-founder's sister-in-law - how much do you trust them to handle your medical records?

Robert Levine is the MOLI View contributing editor for Business and Technology.