Report: Microsoft ready to step in as 'virtual' cable operator with Xbox deal

Following on the heels of rumors that Apple (NASDAQ:AAPL) may include streaming TV and movies as part of its forthcoming iCloud service, new rumors that Microsoft (NASDAQ:MSFT) will be launching an IPTV service available through its ubiquitous Xbox gaming console, and will include Microsoft Mediaroom services. The announcement is expected to come at the E3 video games confab in Las Vegas this week.

Reports say Microsoft will demo the service, called Xbox Live Diamond, after it wraps up negotiations with content providers and programmers. This isn't the first time rumors of an Xbox subscription TV service have made the rounds; they've been going on for about four years. The company already offers services like Netflix and Hulu, and it also offers some live sports through ESPN.

According to Microsoft VP Frank Shaw, 40 percent of Xbox user activity is spent on activities other than gaming.

"The vision for Xbox is straightforward: All of the entertainment you want. With the people you care about. Made easy," Shaw said. "That is why we’ve baked social directly into the experience with Xbox Live--connecting gamers, friends and families across the globe. That is why you’ll see Xbox marketed more as an entertainment brand this yea," he added.

For more:
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