New Xbox Live Dashboard with Netflix

Microsoft has landed a deal with Netflix to bring movies directly to the Xbox 360.

Netflix is by far the largest online movie rental service out there. Thru their “Watch Instantly” feature, subscribers can stream “near-DVD quality” movies and recorded television shows on their PCs or laptops at no additional cost. Major film studios that distribute their releases thru this feature include: Universal Pictures, Sony Pictures, MGM, 20th Century Fox, Paramount Pictures, Warner Brothers, Lions Gate Entertainment and New Line Cinema. Just recently, Netflix subscribers have been able to watch the streaming content with the help of a Roku TV set-top box. This device, which is sold separately, enables streaming content to be played directly on TV sets. With this new Xbox 360 feature, there’s no need for the Roku device.

Microsoft announced the new feature during their pre-E3 press conference. The service will be made available by late fall this year. In the past, Xbox 360 owners have been able to download content from Microsoft’s own video store, but users are complaining that the selection is very limited. Now, that’s just a thing of the past. Currently, Netflix have over 10,000 legitimate movies and recorded TV episodes in their database, with over 100,000 more that they are yet to get the rights to distribute – all of which will be made available to the Xbox 360 users.

According to Microsoft’s VP for interactive entertainment John Schappert, those Xbox 360 owners who are currently subscribed to Netflix won’t have to pay extra for the service. Netflix has approximately 8.2 million subscribers, while Xbox Live (Microsoft’s online service) currently has 12 million active users.

The Xbox Live users will be able to play their Netflix downloads with their Xbox 360 consoles and watch the video on their TV. Plus, they will be able to share the downloaded videos with their friends who are also on Xbox Live and “watch them together despite sitting on different couches,” according to John Schappert.

“You can now share Netflix movies with a Live Party at no extra cost,” he added.

“Live Party” seems to be a newly coined term from Microsoft. Together with the Netflix feature, many more features are coming to the Xbox 360 this coming fall. New features include 3D avatars, instant messaging, video chat, and photo sharing – all on a new Xbox Live dashboard. A Live Party hence is like a “Sims” party of Xbox Live avatars.

Sony has announced that its PlayStation Store for the PS3 will also have the same service available soon; but there are no indications that it’s also going to be in partnership with Netflix. Nintendo has no plans of adding a video store for its hot-selling gaming console, Wii.