Micosoft is moving forward with plans to produce original content for the Xbox 360 by hiring former CBS Network Television Entertainment Group president Nancy Tellem. Redmond’s latest hire will be responsible for overseeing the launch of a new production studio in Los Angeles tasked with creating interactive and linear content for the console.

Tellem’s role as president of Entertainment & Digital Media at Microsoft also means she will be in charge of further developing the Xbox into a consumer destination rather than just a gaming console.

Microsoft is already off to a pretty solid start in that venture with more than 65 entertainment apps that have increased video consumption on Xbox Live by 140 percent this past year. Furthermore, the company plans to launch a 2-way interactive TV experience powered by Kinect with Sesame Workshop and National Geographic later this month.

“The Xbox is already a consumer favorite, and we now have a tremendous opportunity to transform it into the center of all things entertainment — from games, music and fitness to news, sports, live events, television series and movies — so consumers have one destination for all their entertainment needs,” she said. “I look forward to building a studio team that embraces the challenges of creating true interactive content that the Xbox platform supports and to work with talent to create content that will change the way entertainment content is experienced and delivered.”

Tellem joined CBS as an executive in 1997, most recently serving as senior advisor to CEO Leslie Moonves. During her tenure with the network, she was inducted into the Broadcasting & Cable Hall of Fame for her contributions to the electronc arts. In 2008, she ranked 32nd on Forbes list of “The World’s 100 Most Powerful Women” while Entertainment Weekly proclaimed she was the third smartest woman in television.