Will Microsoft's Xbox 360 kick the Apple TV out of your living room?

Posted by Christian Zibreg

Redmond (WA) - Apple TV could be in big trouble when Microsoft unveils its new Xbox LIVE service in six weeks - with a revamped UI and a much broader focus on Hollywood. The software maker is betting on entertainment content in an effort to push Xbox 360 sales. And it seems that the Xbox 360 is the currently best-positioned gadget to become an all purpose gaming and entertainment platform for the living room.

Microsoft announced an improved Xbox Live service described as a "transformation in home entertainment" at yesterday's Tokyo Game Show 2008. John Schappert, corporate vice president of Xbox LIVE, Services and Software said the updated service will include more social networking options and a broader focus on all forms of entertainment, not just games. The service is scheduled to go live on November 19 in 26 countries and 11 languages. "When the New Xbox Experience launches in just six weeks, we will be inviting the whole world to play," Schappert said.

At first sight, the makeover delivers a cleaner and more attractive UI with easier navigation features. The dreaded blades (sections stacked on top of each other) are gone, paving the way for the first-gen Apple TV-like interface where sections spread out and stretch into the distance, zooming into position as you navigate through them. Besides cosmetic changes, a vast content library and new end-user features are also in the works - like animated avatars with customization options to allow gamers to create their online representation throughout various parts of the service, such as chat and party. Gamers can change many details such as hair, clothing, accessories, opening the door for a new Xbox achievements system that will award players with avatar content.

Another new feature: Virtual parties with up to eight people can play games together, voice chat or instant message even during gameplay, share photos in real time (a paid Gold membership is required), view each other's profiles and show what they are playing. Gamers can even communicate if they are not playing the same game. Another addition is the Community Games feature, basically a repository for games created by fans using Microsoft's XNA Studio development software.

The strongest selling point appears to be more entertainment content and system software that turns Xbox into a set-top box more than ever before. Microsoft said it aims to "put more games and entertainment at [gamers’] fingertips than any other device connected to the TV," hinting at other conmsoles such as the PS3, Nintendo Wii and Apple TV.

Microsoft is going to great lengths to transform Xbox 360 into Apple TV-killer. If Microsoft will be able to build its content library, the Xbox 360 and its reduced price points could give Apple TV a run for its money. Gamers can choose between three Xbox models - the entry-level $199 Xbox 360 Arcade (no HDD, 5 full arcade games included), the regular 60 GB Xbox 360 (HD, HDMI port) priced at $299 and the top-of-the-line Xbox 360 Elite (detachable 120 GB HDD, HDMI port with cable, black headset and wireless controller, black finish, one-month subscription to Xbox LIVE Gold) that will set you back $399. Apple TV comes in two flavors: A 40 GB version for $229 and a 160 GB version for $329. However, Apple TV has a huge drawback, at least in this version - it can't run games.

In terms of content, Microsoft is closing the gap between Xbox Live and the iTunes Store entertainment, even surpassing iTunes in some areas. For instance, console owners who purchase Xbox LIVE Gold and Netflix Unlimited subscriptions gain unlimited streaming to 15,000 movies and TV shows from Netflix (Netflix subscription required.) Xbox LIVE currently has 12 million members, although Microsoft refuses to divulge how many of them are paid accounts. Apple’s iTunes Store has 65 million active accounts.