Xbox pushes the red envelope

Microsoft pacts with Netflix for streaming movies via vid game console

Microsoft kicked off the E3 video game conference Monday in Los Angeles by announcing a new deal with Netflix to enable Xbox 360 owners to play movies on-demand through their consoles.

Under the agreement, Netflix's Watch Instantly streaming-movie service will be playable on TVs connected to the console without any additional software or hardware.

Created as a PC service, Netflix has been partnering with consumer electronics companies to make Watch Instantly a TV experience. Netflix already has struck deals with LG Electronics and Roku.

A relationship with Xbox has been expected since Netflix CEO Reed Hastings joined Microsoft's board of directors last year. The service will be available at no additional cost to Xbox Live Gold members who also are Netflix subs.

The deal could boost Microsoft's efforts to turn the Xbox 360 into a digital entertainment hub, and it gives Netflix access to more than 12 million Xbox Live subscribers.

Netflix has 8.2 million subscribers to its DVD-by-mail service, which boasts 100,000 titles, though only 10,000 of them are available to Watch Instantly users.

Also at E3 on Monday, Microsoft announced a deal with NBC Universal to add its HD TV shows and movies to Xbox Live. Among the films and series set to become available this week are the trio of "Bourne" films and the TV series "Heroes" and "The Office."

Microsoft also used its E3 news conference to showcase upcoming titles, including "Gears of War 2," "Fable 2" and "Fallout 3."

E3 runs through Thursday.

David Ward is a freelance writer based in San Diego.