Shares of DivX gained 2.4 percent to $19.07 in morning trading following the announcement that its technology is to be included in the PS3. JPMorgan analyst Paul Coster commented that the agreement is an important breakthrough for DivX and that the respective format will now probably be used in the Xbox.

DivX did not say how much the agreement is worth, but expects it to significantly increase the number of products using its digital playback technology. More than 100 million DivX certified products have been shipped.

Shares rose 44 cents, or 2.4 percent, to $19.07 in morning trading.

JPMorgan analyst Paul Coster described the agreement as "an important breakthrough" for DivX. He said DivX technology will probably be used in Microsoft Corp.'s Xbox, along with other major entertainment products.

"DivX's adoption on the Sony PlayStation 3 was not likely widely anticipated,'' he said.