and announced this week that Disney films will be available for VOD download on the service. Movie titles in both standard and high definition from Walt Disney Pictures, Touchstone Pictures, Hollywood Pictures and Miramax Films are all part of the deal. Movies are ‘rented’ for a 14 day period (or 24 hours from the initial start) and cannot be ported to any other device. Movies are paid for using the Microsoft Xbox Live points system, with HD movies costing 480 points and standard definition rentals costing 320. Points are sold in bulk at about $20 for 1600.

This announcement confirms the expanding role of the way beyond a gaming console. In fact, the Xbox is an entertainment gateway, which could easily be mistaken for an alternative to subscription video service. According to Microsoft, the Xbox Live network has 2,350 hours of entertainment content from 15 partners, and has experienced close to 10 million downloads of entertainment content since launching 7 months ago. Xbox Live has over 7 million members and 5.6 million Xbox 360 consoles have been sold in the U.S. At the recent E3 gaming conference, Microsoft announced that Xbox Live Video Marketplace has taken in more than $125 million in revenue, and is bigger than any cable providers’ VOD offerings. Microsoft announced earlier this year at that future Xbox consoles will be able to act as set top boxes. The writing is clearly on the wall. Xbox consoles may someday soon be seen as a viable replacement for a subscription video service. One could make the argument that that day is already here.

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