Microsoft is investing in TV in a big way with its next Xbox console as part of a fight for the living room. Multiple sources familiar with the company's Xbox plans have revealed to The Verge that Microsoft will introduce a feature that lets its next-generation console take over a TV and set-top box in a similar way to Google TV. We understand that the next Xbox will require an online connection to use the entertainment services, allowing them to be always-on for streaming and access to TV signals.

Very similar to Google TV, but with Xbox gaming

The functionality will work by taking a cable box signal and passing it through to the Xbox via HDMI, allowing Microsoft's console to overlay a UI and features on top of an existing TV channel or set-top box. We're told that this is a key part of the next-generation Xbox and that it will go a step further than Google's TV implementation thanks to Microsoft's partnerships with content providers. Extended support for various cable services will be rolled out gradually, but the basic functionality will be available at launch.

Coupled with this TV functionality, Microsoft's next-generation Kinect sensor will also play a role in the company's TV focus. The Verge has learned that the next Kinect will detect multiple people simultaneously, including the ability to detect eye movement to pause content when a viewer turns their head away from a TV. Microsoft is said to be using these capabilities as part of its UI and features for its TV plans.

Xbox TV set-top box still in the works

Microsoft recently announced its plans to sell its Mediaroom IPTV business to Ericsson. The sale moves Microsoft away from supporting and helping build out software that's used in over 22 million set-top boxes worldwide. It's also part of an effort by Microsoft to focus fully on its Xbox console for entertainment apps and TV services. We're told that the company is still planning to introduce its own low-cost "Xbox TV" set-top box, but that this will likely debut early next year rather than alongside the next-generation console.

Microsoft is currently planning an Xbox event for May where we expect the company to detail parts of its next-generation Xbox. A spokesperson for Microsoft refused to comment on this story.