Editor's comment: Microsoft's controlling interest

Microsoft is waging war for control of your living room. This week the company fired the latest volley in its battle against its console rivals with a $500m marketing drive backing Kinect, its new motion-sensing control system for the Xbox 360.

Despite coming relatively late to market, Kinect has the potential to transform the in-home entertainment experience. It does away with a traditional controller in favour of the player's own body. It can track movements in real-time, recognise who in a room is participating, and respond to multiple voice commands.

However, competition - from Nintendo's market-leading Wii and Sony PlayStation's Move - is tough. The former has wooed the casual gamer, with ads starring saccharine celebrities such as Ant & Dec, while the latter is also building mass-market resonance with a warm and cuddly marketing drive. In contrast, Xbox 360 has long been the console of choice for the hardcore gamer, synonymous with those who don't mind losing the odd day to Gears of War.

The fact that Microsoft is betting the bank on Kinect reveals the strategic importance of the Xbox 360 to its future. Not only is Microsoft hoping that Kinect will spearhead its expansion into the hugely lucrative casual gaming market, but in the long term it hopes to establish Xbox 360 as the focal point of the modern living room.

If Microsoft gets its way, Xbox 360 will supplant the TV, PC and games console to become the multimedia hub through which consumers watch video-on-demand, surf the web, access social networks and play real-time games against friends.

Given that Apple, BT, Google and virtually every other technology company worth its salt are vying for control of this convergent media future, Microsoft's marketing challenge appears huge. Luckily, however, its pockets are also very deep.

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