Microsoft's efforts to control all the entertainment in your living room with its set-top box will continue with the next Xbox, according to a new report from the Verge. The story cites "multiple sources familiar with the company's Xbox plans" in reporting that Microsoft's next system will hook up directly to set-top cable or satellite boxes through HDMI, giving the system Google TV-style capabilities to control a live video signal.

According to the report, the new Xbox's TV connection will build on top of the existing IP video apps for the Xbox 360 that Microsoft began rolling out through Xbox Live in 2011, including apps for Comcast, Verizon FiOS, and many pay TV networks and TV shows. While only basic functionality will be available at first, Microsoft will reportedly roll out "extended support" for these partners through the system's "always-on" Internet connection, laying exclusive UI elements over the video coming from the cable box. In addition, the service will reportedly make use of an upgraded Kinect to detect things such as eye movement from multiple viewers at once, even going so far as to pause playback when your head is turned away from the TV.

The Verge's report also suggests that Microsoft is still working on a lower-cost "Xbox TV" device that would focus on these video and streaming applications, and that the company is planning to launch this version of the system early next year. Microsoft journalist Paul Thurrott recently suggested that Microsoft had put those plans on hold in favor of a lower-cost version of the Xbox 360.

The report is intriguing, but it's important not to get ahead of ourselves regarding just what kind of video features the next Xbox will handle. Let's not forget that Microsoft's E3 2011 presentation suggested that features like digital video recording and full integration with pay TV providers would be coming to the Xbox 360. When those video features finally came, they turned out to be DVR-free and a little underwhelming, offering limited live content and only a small selection of the channels and on-demand content available on a standard cable box.

Nintendo introduced some mild TV integration to the Wii U with Nintendo TVii. That service doesn't actually connect directly to a user's cable box, though, and simply uses the GamePad as a modified, Internet-connected program guide and universal IR remote control.