A recently released Nielsen report shows that the viewership of streaming video on game consoles is on the rise. Not an unexpected outcome with how much Microsoft and Sony have been pushing themselves into the online streaming video market; but it’s still a bit early to tell who’s succeeding.

“Streaming now represents a reported 14 percent of Xbox 360 time, 15 percent of PS3 time and 33 percent of Wii time,” reveals the report. “This growth is fueled by the availability of services like Netflix, Hulu, MLB Network and ESPN3. Time spent on game consoles in general is also on the rise.”

It’s curious to see the Wii as the frontrunner—but in comparison, the Wii also dominates in offline gaming where the Xbox dominates in online gaming. Microsoft has put a great deal of time and energy into making the Xbox a stealth set-top-box and an Internet TV device. And recently, their updates to the interface and dashboard have been lauded as bringing the console out of the shadows and directly into the realm of providing a streaming TV.

The Neilson report analysis suggests that the additional time watching streaming content is incrementally adding onto the total time that users spend with their consoles; and that combined metered console usage from the first half of 2011 is up 7% over 2010.

This is good news for Microsoft as they will not want to give up revenue gained from video game sales as it might bleed into watching TV; although, if all of this content is provided through an Xbox LIVE subscription it might not hurt them if users do lean further one way or the other.

We can probably expect Microsoft to continue to aggressively push into the streaming TV market. Already they are making inroads by inking deals with major cable networks such as Comcast and Verizon. However, much of the content provided through them is still a bit scrawny and would benefit hugely from an infusion of extra channels.

The decisions of those cable providers on who to go with exclusively or to bank their ancillary and niche channels will probably be the make-or-break for the burgeoning console streaming video industry.