Home media centres are finally arriving, says Bill Thompson. We just called them games consoles until now
The battle for the living room is on
One of the more interesting announcements made at last week's Consumer Electronics Show in Las Vegas was that BT Vision, the on-demand TV-over-broadband service, will be available on the Xbox 360 later this year.
It was one of several media-related announcements from Microsoft, including deals with both MGM and Disney-ABC that will see Rocky, High School Musical, Lost and many other films and TV series available to download on Xbox Live.
BT plans to use the Xbox 360 as a set top box rather than simply joining Xbox Live, so you'll only be able to get the service if you have BT broadband at home.
And they won't be streaming live TV, so Xbox owners won't be able to throw out their Freeview tuners for a while yet.
According to BT 'the console does not have the capability for live TV or enough space for practical downloading of content'.
Limited though it is, this tie-up marks another stage in the Xbox 360's evolution from games console to home media centre, finally delivering the sort of technological convergence that many of us have been forecasting for years.
When the original Xbox was released I pointed out that it was clearly part of a longer-term strategy to sneak a home media centre into living rooms under cover of offering games, and that is the way it has worked out.
Now that Microsoft has put its IPTV software, Mediaroom, onto the console, it brings it even closer to being a complete home media centre for live and recorded TV as well as downloaded content of all types.
I already have some idea how this will work.
At home we have an Xbox 360 with a wireless connection to the internet and an Xbox Live subscription. The console is plugged into a low-cost data projector so my son and his friends can play online on a wall-sized screen, and we also use it as a home cinema.
Thanks to the latest software updates from Microsoft we can also stream films and songs from my desktop PC via the 360, giving me access to an extensive library of material.
And since we rarely watch 'live' TV we're pretty happy.
Only 'pretty' happy, though, because there are a number of irritating things that diminish the quality of the experience.
You have to pay for downloads with pre-purchased Microsoft Points, which may reduce the transaction costs for them but can be annoying for the rest of us.
Most of the movies are rental only, so you have to watch them within 14 days, and of course there are regional restrictions so many of the advertised blockbusters are US only.
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You can't get content off the Xbox's hard drive or even see it over the network on other computers.
And you can't easily transfer downloaded content to another Xbox 360 if you decide to upgrade - assuming of course that they even bother to send you the cable to copy from one machine to another (I've been waiting over a month!).
These limitations are not there because the technology isn't capable of doing things differently. They all stem from decisions taken by Microsoft and the studios, who seem to believe that making life difficult for their customers is the way to build loyalty and generate profits.
But the technology promises more freedom, and over time the film studios will surely learn the same hard lesson as the music industry and abandon their attempts to control what their customers do instead of simply offering them the best entertainment they can.
Microsoft is not the only player in this important area, of course, although it does have an early lead. Both Sony and Apple have their own hardware that they believe can replace the dumb set top box and hard drive video recorder.
But even as the PlayStation 3 is reinforcing its solid reputation as a gaming platform, the PlayStation store has only games and trailers to download and 'Home', the much-anticipated 3-D virtual world for PlayStation 3 users, will not be launched until spring this year.
And although Apple will keep plugging away with the Apple TV, freeing it from its need to copy content from another computer at this week's MacWorld, it will find it hard to compete with the games consoles simply because they already have a good reason to be installed in the living room. Apple's box may look prettier, but it does far less for the money.
For the moment, then, the converged world is being shaped by Microsoft, a company that has for many years wanted to reinvent itself as a media organisation rather than just a software developer and has spent billions of dollars on the quest.
Their long term success isn't guaranteed, of course. Sony could come back, and it's not too late for another player to emerge. But whoever succeeds, we are on the verge of a significant shift in the ways we get access to entertainment of all types.
And in a few years we will all look back with wonder and astonishment to the time when TV, radio, music, films and other forms of media were stored, delivered and displayed on separate devices using incompatible technologies, surprised that we ever put up with the chaos and confusion we currently endure.
Bill Thompson is an independent journalist and regular commentator on the BBC World Service programme Digital Planet.