NBC News app for Xbox Live illuminates Xbox’s future in television

Comcast and Microsoft strengthen their partnership on Xbox with an NBC News app. What does it mean for Xbox's future?

There are almost 70 million Xbox 360s in the wild. More than 26 million of the people using them have Xbox Live Gold accounts, and the majority of their time is spent watching television, not playing video games. Netflix, HBO Go, MLB.tv, ESPN—These are the Xbox 360 goods that dominate time on the box, not Halo and Call of Duty.

Comcast is one of Microsoft’s most consistent partners in transforming the Xbox into an all-purpose living room entertainment hub. Its latest contribution: The NBC News app. Not unlike the ESPN Xbox 360 channel/app—Microsoft really needs to not use the app name here as people still think of television in terms of channels—the NBC News app serves up streaming shows, breaking news, and short features. It’ll be broken into categories like Politics, Lifestyle, MSNBC, and regular old news. There will purportedly be original content made for the service, but Microsoft didn’t provide details.

Current events are becoming popular content on Xbox 360. NASA’s livestream of the Curiosity rover’s descent to Mars as widely watched if user comments online are any indication.

The NBC News app announcement is more significant as part of the Xbox’s broader future though. Comcast is emerging as the strongest of Microsoft’s television partners. It already offers Xfinity cable television service through Xbox Live as well. There have been rumors for more than a year now though that Microsoft is hoping to launch its very own cable television service through Xbox Live, and Comcast has been a rumored partner.

NBC/Comcast-owned content has already been used in demos of Microsoft’s Xbox Television service. CEO Steve Ballmer actually demoed Xbox TV for financial analysts in September 2011, showing off episodes of “The Office.” Word was that Xbox TV would launch in late 2011, but Microsoft apparently wasn’t able to rally enough content partners.

Now analysts believe Microsoft was just regrouping for a more concerted shift into cable with the Xbox 720. Wedbush Morgan’s Michael Pachter said in June that he believes Microsoft’s plan is to partner with a cable service provider like Comcast and offer the Xbox 720 for just $99, much in the same way that people buy cable boxes for cheap alongside cable subscriptions.

The NBC News channel is one more value add for Xbox Live here at the end of 2012. For Microsoft though, it represents something far more. It’s one more stone in the foundation of its future in entertainment.