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Major update turns Xbox 360 into entertainment hub

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For years, Microsoft has used the Xbox 360 as a Trojan horse to get into people's living rooms. Now, it's launching a full-scale attack on your other entertainment devices.

Starting Monday, Xbox 360 owners are being prompted to download a free new user interface for the console, which expands Kinect voice control, introduces a broad entertainment search option and adds a slew of new content options that have nothing to do with gaming.

It's all part of the Xbox 360's continued evolution from a pure gaming device into a fully-fledged entertainment hub, something that really began in 2009 with the addition of Netflix streaming.

With this update, however, roughly 40 TV and entertainment providers will offer an assortment of movies, music and television choices on the console, greatly expanding the system's capabilities. Hulu Plus, premium cable movie channel Epix and MSNBC's The Today Show are part of the launch lineup in the U.S., with content from Youtube and Dailymotion coming later this month. A dedicated UFC channel will also be live before the end of the year.

Not all of the new content is free, however. You'll need to be an Xbox Live Gold member ($60 annual fee) to sift through on-demand services, and many of the new channels will only work if you're already a subscriber. Netflix and the upcoming HBO Go (due on Xbox in 2012), for instance, require separate active subscriptions.

The console update further includes new voice search controls for users who own the Kinect camera. By way of Microsoft's Bing search engine, users will be able to simply shout out what they're interested in seeing or playing and the service will comb through all of the content offerings on Xbox to show you availability. Text search is available for those who don't have Kinect. It also works in conjunction with Windows phones.

The update is not without a minor setback, however. While a few heavy hitters are already on board, two of the biggest U.S. partners -- Comcast and Verizon's FiOS service -- are absent at launch. Verizon subscribers won't be able to use their Xbox as a limited set top box until later this month, while Comcast's Xfinity service (which plans to offer on-demand content, but not live TV) won't be available until an undetermined date early next year.

Despite that hiccup, Microsoft is positioning the launch of the new dashboard as the equivalent of a new console, a maneuver that it has successfully pulled off before with the launch of the current user interface.

More than 57 million people worldwide own an Xbox 360, which makes this update a notable one in the entertainment world. It's not quite the cable-killer some have positioned it as -- you'll still need a cable subscription to access most of the channels -- but it could impact sales of standalone set-top boxes like Roku, Boxee and Google TV.

It's likely a welcome one as well. Last month, Strategy Analytics found that 65 percent of Xbox 360 owners under the age of 25 watch more movies and TV shows through the console than on computers.

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