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Microsoft's Entertainment Play

It's a landmark day for Microsoft as it pushes to control the entertainment pipeline into your living room.

For the first time, people are using its Xbox gaming console more for entertainment—watching movies and TV shows and listening to music—than for playing video games.

Xbox 360
Source: Microsoft
Xbox 360

The tech giant announced that not only has entertainment usage surpassed gaming, but that use of entertainment apps on the XBox platform have more that doubled over last year.

Microsoft announced its progress in the entertainment space as it launches three new entertainment apps for its Xbox Live subscription service: HBO Go, Comcast's TV, and MLB.TV. All three work with voice control through the Kinect controller.

HBO Go and Comcast's app offer a huge amount of movies and TV shows on demand, and MLB.TV provides nearly 2500 live baseball games, available later as recaps.

All this content is being delivered to TV sets via the Internet, but that doesn't mean consumers can cut the cord. In fact all these entertainment apps are designed to keep them paying subscription fees.

To access these apps Xbox owners must pay $60 a year for an Xbox Live Gold subscription, which costs $60 a year. And for each of those apps they must subscribe to HBO, Comcast and MLB.TV premium.

So what's the goal? The media companies want to give consumers convenient access to their content so they feel like they're getting a lot of value for that monthly fee. And Microsoft is hoping to get people who aren't interested in gaming to buy the Xbox and shell out $60 a year.

Plus, Microsoft is looking out for a bunch of new rivals: Google TV (GOOG), Nintendo's new Wii U, which will offer streaming video, and Apple TV, and whatever new device Apple has in the works.

Comcast, with GE, is part owner of NBC Universal which is the parent company of CNBC.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.