Microsoft's Sale of Mediaroom to 'Dedicate TV Resources to XBox'

In its continuing effort to fully transform the Xbox from a gaming console to a Living Room Entertainment Machine, Microsoft has announced the sale of its IPTV (Internet Protocol television) business, Mediaroom, to Ericsson.  

The announcement, discussed at length on the Microsoft blog by Yusuf Mehdi, seems to be a big move to focus TV resources within Microsoft to the Xbox platform. We’ve already seen much of this happening already on Xbox Live, and it was that moment during E3 a few years ago when they announced ESPN coming to the Gold service that it seemed that Microsoft was making a big play for the cable TV market.

We are proud of the world-class engineering and business achievements within Mediaroom. They have a rich history of driving innovation in IPTV. As early pioneers, they built the infrastructure to stream video on limited bandwidth, and today they enable multiscreen entertainment experiences for pay TV subscribers. Mediaroom has contributed to the evolution of TV and powers 22 million set-top boxes today in 11 million subscriber households.

Yusuf Mehdi continued…

With the sale of Mediaroom, Microsoft is dedicating all TV resources to Xbox in a continued mission to make it the premium entertainment service that delivers all the games and entertainment consumers want – whether on a console, phone, PC or tablet. And with 76 million Xbox 360 consoles around the world with 46 million Xbox LIVE members, it is a mission that gets us out of bed in the morning.

Did you see it? I’m sure you did. The use of the phrase ‘premium entertainment service’ seems to be the new buzzphrase being thrown around at the Redmond headquarters more and more lately. Compile this with the growing rumors (some almost entirely substantiated) of an Always Online console and it’s looking more and more like the next Xbox might be more akin to a cable box that plays games. So long as you’re connected to the internet of course.

Naysayers might try to remind us that we’re almost in that situation now. We pay for Xbox Live Gold Memberships and then pay again for access to Netflix or Hulu. Of course, all on top of our monthly internet services. I’ll grant them some land here.  But the big difference we have now, of course, is the ability to play games offline. And changing that certainly seems to be a bridge too far for consumers who have lashed out viciously at rumors of it being otherwise.

We’ll find out on May 21st if Microsoft is willing to take that leap.