Xbox 360 teams with Netflix, NBC-Universal

Microsoft today preceded E3 by announcing two major deals for movie viewing on the Xbox 360. The company has struck an anticipated deal with Netflix that will let subscribers to an Xbox Live Gold membership watch movies online for free, effectively giving them a movie subscription service along with the gaming that already comes with Live. Microsoft expects the Netflix feature to come along with a major redesign of the Xbox 360 interface (shown) and notes that the interface's new Community channel will let parties, or gatherings of friends, share their Netflix queues with each other.

The video feature should be available sometime in the fall along with the Xbox interface remake, which uses a Cover Flow-like interface for browsing content visually rather than by text. It also adds a Primetime channel for live events and personalized avatars that can be integrated into games, such as the upcoming 1 vs 100 trivia game. The refresh is planned for the fall.

In addition to the streaming feature, Microsoft has also negotiated a deal with NBC-Universal to add the studio's catalog to the Xbox Video Marketplace for a-la carte downloads and rentals. The catalog includes permanent downloads of NBC TV shows such as Heroes and The Office as well as HD and standard-definition movies that include the Bourne trilogy and the Mummy series. The extra titles are available today.

NBC-Universal's deal follows earlier integration with the Zune Marketplace, which already carries NBC shows, and puts additional pressure on the Apple TV; NBC has refused to offer its TV shows for iTunes over a dispute regarding variable pricing.

The Netflix deal also gives the Xbox 360 an edge by supplying it with a subscription service that isn't available through Apple TV and similar pay-by-title devices.