Microsoft Corp. is developing a set-top-box to compete for mainstream consumers. The STB will reportedly be released alongside the Xbox Next and will offer entertainment services as well as basic gaming technologies. The product will primarily fight against Apple TV and other similar devices.

The main idea behind the Xbox game console was to bring Microsoft into the living rooms around the world. However, the video game system is too expensive for everyone since many consumers still do not play video games. To address those not interested in gaming, Microsoft is developing a set-top-box that will use a low-power (presumably, ARM-based) system-on-chip, core components of Windows and will run all entertainment services the Xbox Live platform has to offer, reports The Verge web-site. Naturally, some casual gaming capabilities will still be present on the Xbox Live STB.

A set-top-box compatible with Xbox Live services could help Microsoft to significantly increase market share of its content and entertainment service, which should help the company with negotiations over pricing of content with the owners.

The software capabilities and possible hardware architecture of the Microsoft Xbox Live set-top-box implies that the software giant will be able to quickly reduce the cost of the STB in order to gain maximum possible amount of customers. However, the price is not the only thing about the STB. For example, Apple TV costs $99 and the latest generation does not have as many limitations as the previous ones. Still, not a lot of people are getting the Apple TV.

Another thing about the Xbox Live STB is that Microsoft will need to ensure that it does not interfere with Xbox 360 and Xbox Next as this will hurt sales of all three products. Keeping in mind that there are console-class video game streaming services today as well as mobile games that look better than some console titles, it will not be easy to do provided that Microsoft does not artificially limit performance of the system-on-chip inside STB.

Microsoft did not comment on the news-story.

Tags: Microsoft, Xbox, Xbox Live, Xbox Next, Loop, Durango