Microsoft understands that going forward, having the same titles side by side with the PlayStation 3 is not going to be enough to give them a competitive edge. With PS3 console sales picking up quite a bit in recent months, the 360 instead enjoys of an already large user base that is unlikely to see exponential growth. The software giant has teamed up with a Hollywood production team with the intent of creating exclusive entertainment content for the Xbox Live. The company, Safran, will help distributing shows via Xbox Live, adding on to the existing portfolio the console has for video.
A Microsoft spokesperson likened the partnership and further services on Xbox Live as an "on-demand television channel" - an evolutionary step console makers have been touting for a few years now but that is just beginning to take place. Microsoft's aim is largely similar to Sony's, with the console becoming a "media hub" as opposed to a plain game platform. The hardware certainly has the capabilities to do it, and the popularity of Xbox Live, sitting at 10+ million users, makes it very feasible.