More than half of the time people spend on Xbox Live is devoted to watching videos and listening to music, Microsoft's Yusuf Mehdi told the Los Angeles Times. "What we're seeing is that people are turning on the Xbox to play games and then keeping it on afterwards to get other types of entertainment," Mehdi said.

The Xbox 360 isn't a gaming console; it's now officially an entertainment center that includes games, and it's becoming more popular with this angle. Today households spend an average of 84 hours a month playing games and using other apps on Xbox Live, up 30 percent from a year prior. To compare, the average household watches 150 hours of TV each month.

Even before Kinect, a tool that has always made more sense as an entertainment control rather than a gaming one, Microsoft has wanted the Xbox 360 to be "the heart of connected digital entertainment," as HBO senior vice president of consumer technology Otto Berkes put it.

Today Microsoft added MLB.TV, HBO GO and Comcast Xfinity TV apps to its lineup, which already includes Hulu, Netflix, YouTube, Zune, Last.fm and others.