Microsoft’s making progress with its effort to turn its Xbox gaming console into the central brain for home entertainment. The company said Monday that it has an agreement with News Corp which will provide apps this year to funnel content from Fox Broadcasting,  Fox News, and The Wall Street Journal to customers of the XBox Live service — with security to ensure that only pay TV customers see the cable programming. In addition, Microsoft has an arrangement to offer video from Comcast’s Xfinity On Demand, and a deal with Verizon FiOS to create a program guide app. The announcements were part of Microsoft chief Steve Ballmer’s keynote presentation to the 2012 International CES — supposedly his last annual infomercial address to the consumer electronics gathering. With help from American Idol’s Ryan Seacrest, he used the occasion to lay out his vision of a home where people make voice commands to the Xbox to find and call up TV programs, and use its Kinect motion control sensor to interact with TV characters. “We invest for the long term and make exciting things happen,” he said. The company demonstrated its interactive TV capability with Kinect Sesame Street TV; for example, kids can pretend they’re tossing objects that the show’s characters catch, and view themselves on screen engaging with the action.

The entertainment features were only part of Ballmer’s effort to promote the idea that Microsoft is a cutting edge innovator. He talked up plans for the app-oriented Windows 8 operating system, designed to work on tablets as well as PCs. The Windows Store with some of the initial apps is due to open late next month. The program also will feature an updated design called Metro, which replaces program icons with boxes and rectangles that integrate applications and data.  “There’s nothing more important at Microsoft than Windows,” Ballmer said adding that “Metro will drive the new magic across all of our user experiences.”

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