Xbox Live cues up TV, movie downloads

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And while content providers like Paramount are happy to be working with Microsoft right now, they will likely be making similar content available to any company with a digital living room initiative.

"There (are) very few exclusive deals in Hollywood, especially in video-on-demand," said Lesinski. "We're talking to all of them."

Meanwhile, Henson said, Xbox Live users will have more than 1,000 hours of content available to them and more than 2,000 individual pieces of content.

The timing of Microsoft's addition of movies and TV shows to Xbox Live is noteworthy for two reasons. First, November 22 is the first anniversary of the launch of the Xbox 360, Microsoft's next-generation video game console. Second, it is just days after Sony's expected November 17 launch of the PlayStation 3 and the November 19 release of the Wii, the next-generation console offerings from Sony and Nintendo, respectively.

Neither the PlayStation nor the Wii are expected to offer users the ability, at least at first, for downloading movies or TV shows.

For its part, Sony touted the PlayStation 3's hard drive and its capacity for downloading and storing content.

"PlayStation 3's content is designed for everyone to enjoy right out of the box, no matter which configuration you purchase," said Dave Karraker, senior director of corporate communications for Sony Computer Entertainment America. "We would never shut anyone out of the entertainment experience because they didn't have the money to buy the top-of-the-line system. Both PlayStation 3 versions available on November 17 include hard drives for downloading content."

But Microsoft is trying to do all it can to highlight the differences between Xbox offerings and that of its competitors, especially given its year head start. Among the chief differences, the company likes to point out, is that by the holidays, there will be 160 games available for the Xbox 360, while the PS3 will boast only 22 and the Wii 62, of which 32 will be new.

Further, as Microsoft attempts to take on Sony, Nintendo, Apple, Cisco and others, it does so with a big head start. Along with its year lead over the PlayStation 3 and the Wii, it already has an install base of at least 7 million Xbox 360s and is expected to have as many as 17 million by the end of next year, Enderle said.

This "gives them a significant lead," Enderle said. "The advantage of using a game system that's already in the market is it gives you kind of a jump-start."