Microsoft's Xbox gets live FiOS TV from Verizon next month

Verizon (NYSE: VZ) is making some of its live, FiOS TV channels available over Microsoft's (Nasdaq: MSFT) Xbox 360, allowing users to interact with their TVs using voice and gesture commands through Kinect.

The deal will require customers to subscribe to both Verizon's FiOS TV and high-speed Internet services, and to be Xbox Live Gold subscribers as well. Verizon said an app for the Xbox console would be available to download next month.

Verizon, on its blog, said it would be the first time customers could use voice and gesture control to watch and browse TV channels. The company said it would make 26 channels available on the Xbox initially.

"Joining forces with Microsoft and Xbox, we are breaking the boundaries between TV and gaming, and furthering the borderless lifestyle Verizon customers enjoy with our new offers and services," said Eric Bruno, VP of consumer and mass business product management for Verizon.

Verizon is offering new customers who sign up online for FiOS TV service triple-play service with FiOS TV, FiOS 35/35 Mbps Internet service and Verizon voice service for $90 a month. They will also get a 12-month Xbox LIVE Gold Membership and the Xbox Halo: Combat Evolved Anniversary game.

Today's announcement comes out of talks between Microsoft, Verizon and Comcast (Nasdaq: CMCSA) that were leaked in September and confirmed in October. Reports said Microsoft was in talks with some two dozen providers of video and music content, as it attempted to expand the role of the Xbox.

In May, Fox Group SVP of content protection Ron Wheeler, in a filing with the FCC, stated that "in the course of renegotiating a contract with one of Fox's multichannel video programming distribution ("MVPD") partners, the MVPD has told Fox that it intends in the near future to make its subscription and on-demand video services available directly to widely-marketed consumer electronics devices, such as game consoles."

Earlier, Disney made a similar filing but with one major difference: Fox goes on to reveal the plans of an American operator to begin substituting software on game consoles and other "widely-marketed consumer electronics devices" for set-top boxes.

"While there have been hints of this kind of thing for the last eighteen months, this revelation, especially in relation to game consoles, is a significant step up in the commitment level from the operator(s) in question," Stephen Froehlich, a senior analyst with IMS Research, said at the time. "While it is impossible to yet say who the MVPD in question is, our analysis points to a cable operator in the U.S. (including Verizon FiOS in that category)."

Froehlich said that AT&T already is using Mediaroom in that capacity on the Xbox 360, but it "lacks the bandwidth to do much more than it is currently doing."

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