So, why require broadband for console gaming, User Experience is the answer, plain and simple. UI designers (UID's), Info Architects (IA), Usability Engineers and Product Managers all know that user experience is a significant key to product/project success. One of the first things the UID or IA asks, is "who is the audience?" The answer to that question will direct the development one way or another, towards simplicity (37 signals), or design-y sophistication (k10k, adobe exchange). The same thing goes for the console market, but it's probably less clear how to proceed in that market than it is in the Web App market (after all there's many UI and web dev blogs and self proclaimed experts out there, but how many broadband gaming blogs do you see?).
There have been online gaming announcements by Microsoft, Sony and Nintendo for their respective systems.. What they all have in common is this broadband requirement for connectivity, which has puzzled me for a while now. I'm a PC gamer (ie, I play networked video games on my Windows computer) and have been for several years now. The Myth and Tribes series of games have been my favorites, and I have always managed to be competitive using a 56k modem. So, it has confused me that console games would require the fat pipe, until I accepted console gamers are different than PC gamers (even if Microsoft is trying to bridge that gap).
EA Games, a video game publisher, knows the console gamer well, and knows that broadband is coming. Console gamers play games without network lag, which is a huge difference in expectations for game performance. Quite often I hear players in Tribes2 saying things like 'this map causes lag' and 'user x is causing lag on this server.' Both of those comments reveal a huge misunderstanding of a network game and what is causing a compromised user experience.
The facts are that a certain map causing lag is really a massive polygon count and their machine is choking on the massive amount of work to do and their frame rate is dropping. for the most part, you don't see that on older console game systems where developers know the systems limits. In the PC environment, everyone's hardware config is different, so someone out there is going to have frame rates over 80fps, and someone else will see 12fps. This dynamic doesn't exist in the console market (Halo will perform the same on all Xbox systems, period). This consistency is a corner stone of the console gaming experience.
The belief that a certain user is causing lag (with the thought that their slow connection is somehow affecting the server) is pure ignorance. Game servers send out UDP packets, not TCP, so error correction is not done, so re-sending of packets to slow clients doesn't happen, thus a given client will not effect the performance of another, period.
A console game played on a console with a broadband connection will make these problems go away. Developers will make games that run smoothly on the machine, and the broadband connection will make the game run smoothly online. Console gamers, who are not necessarily PC owners will see abetter online experience. Ironically, those with broadband connectivity are those who will be most educated on network dynamics and would be most tolerant of UDP economics.
So, I guess I'm back to my original problem of not understanding why a broadband connection is required for the Playstation2 and the Gamecube. The Xbox has ethernet built in, and forcing a consumer to buy a modem adapter would be an arm twisting experience, so that platform is sort of locked into broadband. Sony still has the opportunity to a make broadband and modem adapter combo available to users, and instantly widen this nascent market (eg, the online console market) for 30 million users. Nintendo already has both planned but doesn't have 30 million users, so we'll see what happens there.
What's most concerning about this movement (within the context of being a share holder of one of these three companies, which directly, I am not) is that broadband adoption is not universal. The market is kind of narrow, and then owners of consoles who also have broadband is narrower still. Now consider that those who have the fat pipe have that connection going into their PC's. In my humble opinion, no one is going to get a $50/month bill just to get their game console online. I think those who have a broadband connection, own a console, and want to play console games online will need to set up home networks. By now, the potential market has been trimmed down to gaming junkies who understand networks to some degree. Knowing that Microsoft is going to spend millions of dollars on their Xbox Live initiative makes me happy because I'm the sort of geek who likes to get a home network running to support a console, my PC and Mac multiple Macintoshes, all behind a Linksys access point. How many others like me are out there that enjoy the 'figuring it out' experience as much as the gaming experience?