Microsoft rumored to be making new streaming set top box

Xbox-Video — Image used with permission by copyright holder

Always seemingly one step behind, the latest rumor has Microsoft looking to come to market with a new streaming set top box that would compete with the likes of Apple TV, Roku, and Boxee.

Anonymous inside sources revealed something was in the works to the Wall Street Journal, suggesting that the company’s Xbox gaming console provided the spark with which Redmond would look to pursue getting into the streaming media space. The Xbox is already capable of streaming content to a TV, but it looks like there may be another angle to how this might work.

Though it’s still unclear, the box might include Kinect, the motion-sensored camera peripheral that works with the game console and Windows PCs, and could also offer some level of casual gaming similar to how Angry Birds is playable on the Roku 2 XS, for example.

TV and film content would be the centerpiece of the device, but where the content would come from is also unclear. Microsoft does operate its own TV and movie streaming service via Xbox Live, but accessing it requires a Gold subscription, so perhaps this new box would be an attempt to win over consumers who aren’t interested in gaming, and even less interested in paying an annual or monthly fee just to get to the Xbox Video service.

On the flip side, Microsoft already has relationships with content providers, like Netflix, Crackle, Hulu Plus, HBO Go and YouTube, so it could conceivably get off to a running start should it choose to go that route. Skype integration is also a possibility, as would connectivity with smartphones and tablets, particularly Windows models. An added tidbit is that Microsoft may also partner with TV manufacturers to embed the streaming platform onto smart TVs as well.

Amazon has also been rumored to be cooking up its own streaming set top box for a piece of the action, which could be launched as early as the fall. If Microsoft is looking to muscle in, the timing of both launches could be interesting if their respective plans fall in line with what insiders have said thus far.

Microsoft’s new Xbox console is expected to be unveiled at an exclusive event in Redmond on May 21, where executives may also shed light on what the company’s strategy will be for non-gaming content on the device. The Xbox 360 currently sells for between $200-$300, considerably more than the average streaming box, which averages $100.

A new streaming box would mean Microsoft is late to yet another party, but with the over-the-top market beginning to heat up, the timing might not be as off as it seems.

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