Microsoft's Xbox 360 Event: The Mighty Xbox Extends Its Lead In The Living Room

There was, as is par for the course at Microsoft keynote presentations, much to laugh about and mock at Monday's Xbox event, presented live at the E3 Technology Conference.

There was the idea that anyone in the mostly-male, hardcore-gamer audience would be enchanted by a performance by pelvis-thrusting sex-music heartthrob Usher. There were the customarily terrible jokes and overscripted speeches. There was the sincere hope that customers would buy the next Dance Central game because it features "Teach Me How To Dougie" as one of its key routines.

Sure, there was plenty to lampoon. But in between the screw-ups, the head-shakers, and the interminable Usher performances, there was this: Microsoft announced a raft of improvements and important new features that make the Xbox the best set-top box on the market and one of the most useful devices you can hook up to your television, period.

The Xbox 360 already offered a robust suite of entertainment applications. In addition to the on-demand movie and music offerings in its marketplace, for $60 per year Xbox owners could access their existing accounts on Netflix, ESPN 360, Hulu Plus, HBO GO and YouTube. The number of high-quality third-party apps available for the Xbox stacked up favorably against competitors like Apple TV, Boxee and Roku (see chart for more).

And -- oh yeah -- it also has some decent video games.

Microsoft took what was already a well-loaded home entertainment system and, quite simply, made it better. It added apps from 35 content providers, including Nickelodeon and the NBA, and it announced 24/7 availability of ESPN, ESPN 2 and ESPN 360 for cable subscribers and those with the right Internet providers. Voice search on Xbox Kinect now supports search by genre and more than a dozen additional languages. Nike even showed off a cool-looking training program that integrates with the Kinect motion sensor bar.

All of those additions are nice padding for an already stout ecosystem. But we haven't even hit the two most important new functions coming to the Xbox this fall: SmartGlass screen-sharing and the whole dang Internet.

First let's talk about SmartGlass, which will, at its core, allow users to stream certain content on their phones, tablets and laptops onto their television screens through the Xbox, and vice versa. Start a movie on the Xbox, and you can finish it on your tablet. Begin a TV show on your phone in the subway and then watch it on TV once you arrive home. And once you do pop that content on your TV, your smaller device becomes the remote with which you control that content. The core function -- which will include screen mirroring in some form -- is similar to that of AirPlay on the Apple TV, but Microsoft one-ups Apple in an important way: SmartGlass will also be available as an app that works with iPhones, iPads and Android tablets as well as with Windows Phones, Windows 8 tablets and PCs. In other words, you don't have to buy a specific mobile device from the maker of your set-top box to fit your television's needs. That might not be great for Windows Phone sales, but it's awesome news for consumers and current Xbox owners.

(Microsoft also seems fairly excited about the ability to display secondary information about the movie or TV show you're watching or the Xbox game you're playing. Me? I'm more keen on the screen mirroring. When I'm watching a movie, I want to be watching the movie, not reading about the cast and crew.)

Anyway, while Microsoft attacks the Apple TV's best function with SmartGlass, it's also knocking at Google TV and Boxee with its announcement of a full web browser for the Xbox. Navigating the web using the remotes for Boxee and Google TV is kind of like trying to unzip your jeans without using your fingers: frustrating and rarely successful. Internet Explorer for the Xbox -- which can be navigated by controller, voice, or touch on your Windows Phone device -- appears to be a leap forward in TV-first web browsing.

Ignore the fact that it's called "Internet Explorer" and that you are pre-conditioned to hate "Internet Explorer." This is a browser. On your television. That works. And the Metro design for IE on the Xbox is much more attractive than what Microsoft currently vomits out for desktops.

What is holding the Xbox back, of course, as a purely web-connected, Apple-TV-killing gadget, is price. (The Xbox is not really a web-connected gadget at heart -- it's a gaming console -- but stick with me). I'm not much of a gamer -- my takeaway from the demos of upcoming Xbox titles is that shooting enemies in the face is going to be HUGE this year -- so my Xbox really does operate solely like a Roku or Apple TV. You have to pay about $229 for the machine itself, and with a $60 per year Gold membership necessary to access most of the apps, the price is hard to justify for those who just want a little gizmo that will get Netflix on the big screen.

If you've got the dough, however, the Xbox is easily the best "set-top box" you can buy. The two new features alone -- an actually functional web browser and the ability to stream media from virtually any Wi-Fi-enabled device to your television -- combined with Microsoft's existing entertainment suite and third-party apps, push the Xbox far past what Apple, Google, Boxee and Roku are offering to consumers. Obviously, it's a far more expensive device, but you are paying for a quality that no other box can match. If you've got the cash, it's the best Internet-connected option for your television.

From a purely anecdotal standpoint: I have a Boxee, Roku and an Xbox 360 hooked up to my living room television, and I find myself reaching for the Xbox controller far more often than the Boxee or Roku controls. It's faster, the layout is smarter and there is much more content, much more to "do" on the Xbox. And I don't even play video games (not even ones with "Teach Me How To Dougie" in them).

In other words: Yes, there was a lot of risible, jaw-dropping nonsense on stage at the Xbox presentation on Monday. But if you can forgive Microsoft for foisting a six-minute Usher fiasco upon you, you will see that the Xbox 360 really is winning the living room wars for a reason: Like the iPad in the tablet wars, Microsoft is galloping out in front of its competitors in terms of device quality.

Some were disappointed we'd have to wait another year for a brand new device, the Xbox 720. But, if you were Microsoft, why would you release a totally new system when the 360 is still selling and performing so well? Just as Apple quietly upped the quality of its category-leading iPad in March, so too has Microsoft incrementally enhanced its best-in-class gaming system and multimedia console. And that's something that no amount of disastrous Usher concerts can take away from.