Microsoft is exploring options to bring full-on cable service to Xbox Live and presumably Windows Media Center. Encouraged by the positive reaction to ESPN’s channel on Live, Microsoft is exploring a variety of options to add more elaborate television offerings to their lineup. On the table is everything from becoming a full-on Internet cable operator to introducing more segmented experiences like ESPN does currently, or just continuing their cable-box-in-a-console deals with other providers besides AT&T U-verse.
As GoogleTV and Apple start their aggressive move into the settop box space, Microsoft, who arguably already has a very functional ecosystem in Media Center, needs to get their Extender licenses back in the game. With a lot of the needed technology already going out there in every Blu-ray player via Netflix support, taking them one step further shouldn’t cost too much on either end, and with the potential addition of cheap portals to premium cable content, this could be the advantage they need to stand on par with Apple. As we saw in the HD Disc wars, Microsoft has always had strong ties to NBC/Universal (Uni was the only studio to back HD DVD exclusively), and with their impending takeover by Comcast looming, this could definitely lead to some interesting developments come E3 2011.
While any active services aren’t likely to launch for another 12 months, I’m sure a lot of cable providers might be willing to jump on board to stop the rampant “cord cutting” with a lower priced, more focused plan for the console set.