Microsoft has announced that it will offer broadband video services on its Xbox 360 games console. These will be offered by providers that are deploying television and video services over broadband networks based on the Microsoft IPTV Edition software platform.

The integration of a video gaming console with IPTV or internet protocol television services is intended to deliver a new entertainment experience.

The plans were announced as part of the Bill Gates keynote at the start of the Consumer Electronics Show in Las Vegas. IPTV services are expected to be available on Xbox by the end of 2007.

“Both Xbox 360 and Microsoft TV IPTV Edition by themselves deliver unique and exciting entertainment experiences today, but IPTV on Xbox 360 is truly a solution that is greater than the sum of its parts and will enable even more exciting experiences to delight consumers, service providers, content providers and game developers alike,” said Robbie Bach, president of the Microsoft entertainment and devices division.

Two years ago, Microsoft gave a demonstration of its IPTV Edition solution at CES. Now, said Robbie, Microsoft is in the market with five providers: AT&T, British Telecom, Deutsche Telecom, C-Com in France and Swisscom. He said that Microsoft is also working with 11 other customers and a number of others who are in trial or evaluation.

“This market is going to continue to grow and over the next three or four years is going to become a major part of the TV delivery ecosystem,” he said.

At CES, Microsoft provided the first public demonstration of its IPTV Edition software running on an Xbox.

“IPTV on Xbox 360 allows our service providers to really differentiate their TV experience,” continued Robbie “because now on one box not only can you get an amazing TV experience through IPTV, but you do get all that great gaming experience that is Xbox 360.”

The Xbox Live online marketplace already sells downloadable movies and television shows. The 20 gigabyte hard drive on the Xbox is something of a restriction, but newer models are likely to feature larger drives.

The addition of streaming video services to the Xbox, which has shipped over ten million units in just over a year, demonstrates the strength of the Microsoft broadband video strategy. As well as delivering television and video services to set-top boxes, it can offer a similar experience on its games console, offering the potential for combining the television and gaming experience in new ways.

Service providers benefit from the extension of their proposition to games consoles without needing to subsidise additional set-top boxes and they can exploit the demand for the games platform to draw users to their broadband video services.