Microsoft’s Xbox One was launched yesterday in Redmond Washington. The company describes the new console as an “all in one entertainment system.” Thats right, the new Xbox version offers games, live TV, movies, music and Skype. Jia Wu from consultants Strategy Analytics explains the company’s move from a gaming console to include all that and more.

Microsoft is very strong in business software and the enterprise cloud business, but its consumer businesses are facing tremendous challenges: PCs are declining rapidly and Windows Phone handsets have only a fraction of the market shares of rivals.

Xbox represents Microsoft’s core strategy in the consumer entertainment market, especially after it sold its Mediaroom video distribution business to Ericsson earlier this year. This is also the unique asset which Microsoft has that can differentiate itself from Apple, Google and several of the other large tech companies.

The new features included with the Xbox One are a Blu-Ray drive, Skype, Kinect sensors and a redesigned gamepad that vibrates among many other things. The console is controlled by motion, face recognition and voice activation  Yves Guillemot Ubisoft’s chief executive said:

We believe it will reinvigorate the industry…There’s a huge step up in graphics and there’s a big step up in terms of memory as well…It will take time to take full advantage of the machines because we’ll have to learn how to best optimise the technology – but even from the beginning you will see a huge difference between a game on the two different generations.

The console is set to go on sale later this year.

[Source: BBC News, The Telegraph, Read Write, YouTube]