Xbox Becoming Centerpiece Of The Digital Living Room - InformationWeek

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Xbox Becoming Centerpiece Of The Digital Living Room

In a fierce competition with Sony's PlayStation 3 and Nintendo's Wii, Microsoft said it needed something new to set it apart.

Think the Xbox is just for games? Think again. Microsoft announced at the Consumer Electronics Show on Sunday that the Xbox 360 is about to become your set top box and one-stop shopping for digital downloads.

During a keynote address on Sunday night, Microsoft chairman Bill Gates and Microsoft entertainment and device division president Robbie Bach announced that British Telecom would soon be offering consumers the choice of using their Xbox 360 as a set-top box for IPTV. Whispers of such a development were heard as early as last July's Financial Analyst Meeting, though details and confirmation were scarce at that time.

Microsoft also said that the Xbox would bolster its position in the digital downloads game, announcing deals with ABC and Disney to distribute high-definition content on the $350 console. That means Hannah Montana fans and people looking to watch the ABC evening shows they missed can watch directly from their Xboxes. MGM, meanwhile, is bringing its library of films to the console. Microsoft first announced digital downloads would come to Xbox in late 2006.

"Xbox Live, when we're done integrating this content, will offer more than twice as many hours of on-demand, high definition content as any cable or satellite provider," Bach said.

In a fierce competition where the PlayStation 3 has gained accolades for its high performance and superior graphics and where Nintendo's Wii has revolutionized the use of gestures for games, Microsoft needed something new to set it apart from the other two. It got that in these announcements, which make the Xbox as much a central part of the digital living room as a gaming device.

Not that the Xbox 360 was suffering too much from a competitive standpoint. Bach announced that Microsoft has shipped 17.7 million Xboxes to date, doing $3.5 billion last year in sales through November. That number constitutes a billion more than the Wii, its closest competitor. The downloads will be distributed through Xbox Live, a service Microsoft says has 10 million users today.

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