The battle for the living room is hotting up, with Microsoft’s plans to provide movies on-demand through Xbox Live.

The service is set to launch in the UK next week, with launch titles including The Matrix, Harry Potter, and Ocean’s Eleven.

Xbox Live users can download movies for 250 Microsoft Points, which is equivalent to around £2 each, or pay more for high definition versions.

Microsoft currently has around 8m subscribers to Xbox Live worldwide, with the vast majority in Europe and North America, so there is a sizeable audience for its downloads.

We have previously argued that, despite Microsoft making a loss on many of its consoles, and the much publicised ‘red ring of death’ issues, the Xbox will be a success in the long run.

Microsoft has not only sold a games console, it has also provided an online-enabled set top box that is ready to deliver movies, music videos and more to millions of living rooms.

Other existing contenders for dominance of integrated consumer TV / internet / phone / media services include BT, Sky, and Virgin. The mobile operators are also well-placed. Many observers expect Google to wade into the market at some stage, while Apple also has the potential to partner up and make a splash. Time will tell…

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