At Microsoft’s annual holiday preview I gained a glimpse into a number of new online services coming this fall to the Xbox 360 including a new system for watching movies and TV shows that will work even if your Xbox 360 didn’t come with a hard drive (the Arcade bundle) and the very first steps designed to connect video games with the worlds of Facebook and Twitter.

Zune Confusion

Sometime soon the “Video Marketplace” on Xbox Live will re-launch as the “Zune Marketplace”. This is to reference the online PC-based music store Microsoft launched in the United States to support their family of Zune portable media devices. This store was not launched in Canada nor are there any plans at the moment to do so.

The change is also designed to incorporate the “Zune HD”, a version of Microsoft’s portable media player that supports High Definition Video. It too did not get a launch in Canada, nor are there any plans at the moment to do so.

At the moment, re-branding Xbox Live’s “Video Marketplace” as the “Zune Marketplace” doesn’t make much sense here in Canada, except for these two reasons:

1. Standard Definition videos purchased through Xbox Live can be transferred onto a regular Zune player, which are available in Canada.

2. Movies and TV shows are presented in the store the same way content is presented on the Zune Marketplace on your PC, with background info, cast listings, and other details.

My preview of the new movie service involved the Canadian Beta and amongst the screen options during the menu to make purchases was an option to select whether you would like to watch the content on your Xbox 360, PC, or Zune. Does a single purchase cover all three platforms? If you buy a movie and download it onto your Xbox 360, can you then transfer/download it onto your PC and Zune? Or do you need to purchase them separately? Is this even a feature that will be available in Canada?

At this point Microsoft does not have an answer to such questions and we’ll have to wait until the Canadian Beta is complete before they know exactly what can and cannot be made available here.

1080p In 60 Seconds

The new video service will deliver movies and TV shows in a streaming format. Any Xbox 360, regardless of whether it has a hard drive or not, will be able to watch the new video content. From tests done during the Canadian Beta, it’s a service that will work on any high speed internet connection with a minimum 3 Mbps download speed.

The promise is that a movie will begin “instantly”, but that it will also be available in 1080p High Definition format. They did not, however, promise them both together.

The streaming technology Microsoft uses requires the stream to be analyzed initially during playback and then optimized before it can achieve 1080p.

When you select a movie, playback begins immediately, but with a poor, pixilated performance. As the service tests the stream, the video quality quickly improves. To help you gauge this process there’s a set of on-screen icons on the upper right. A set of bars, just like the ones you see on a cell phone, show the strength of the connection. Once the bars fill up and the service improves, the “HD” icon will light up to show that the movie is now playing in High Definition, and then again as it improves, the “1080p” will finally activate and the quality is crisp and clear. The process takes about 40 – 60 seconds and unfortunately has to be done each time you press play. So at the beginning, you will experience pixilation during the opening credits, but if you press pause or stop playback in order to come back to it later, you will experience that pixilation again when you press play again.

Microsoft is still performing tests to see if they can improve the experience, but some form of quality ramp-up will always be there.

As much as Microsoft is pushing the instant-on aspect of their service, the draw of not having to wait for download, I’d rather they include a 60-second start-up sequence that hides this ramp up process than have any second of the movie I’m watching degraded.

Movie Parties

The movie party mode allows users to connect online and watch a movie or TV show together, chatting with each other using headsets or text messages, and interacting with each other using their avatars.

Up to eight people can connect in this way, but each person has to purchase the movie. This is not a feature that allows you to take a movie that you’ve bought and watch it with your friends like you would at home with a DVD. The members of the party can suggest and vote on which title to watch and then the leader gets to decide whether to include avatars or simply watch the movie as-is with headsets active.

Including the avatars brings up a virtual theatre. The movie plays on a virtual screen, there are curtains, and the avatars sit in seats next to each other. Users can then access an “Emotes” menu to activate animations such as tossing popcorn in the air and catching it with their mouths or blowing kisses to their favorite actor on-screen.

What Microsoft is recreating is the experience of being on the phone and watching the same movie on television as your friend or lover, as the main characters in “When Harry Met Sally” did, but by forcing each person in the party to pay the rental price, Microsoft has kind of killed the mood and so it’s unlikely to get as much use.

Facebook Live

Launching soon, Facebook on Xbox Live is merely a simple integration of the popular social network. You can log into your account using your Xbox 360 and it will display your profile, give you your news feed, and allow you to update your status.

Microsoft is pushing the use of their ChatPad accessory as the keyboard for use, but you can also use the on-screen virtual keyboard. I’ve asked if a regular USB keyboard can be used, but have not gotten an answer on that yet.

The real advantage to accessing Facebook through Xbox Live is that you can display photos from the network using the Xbox 360’s own slideshow program, displaying a friend’s pictures or all the photos tagged with your name as if they were saved on your Xbox 360’s hard drive.

The relationship between video games and Facebook isn’t there yet. It will be up to individual game designers to build a feature into their titles that will allow it to access Facebook in order to upload screenshots or send out messages.

The only option at this point is that you can update your Facebook account to advertise your Xbox Live account. This will allow you to search your Facebook contacts to see if any of them are on Xbox Live and then you can add them to your friend’s list on your Xbox 360.

Twitter Live

Similar to Facebook, Twitter on Xbox Live delivers the most basic functionality. You can log into your account and see the fifty most-recent tweets displayed next to your avatar. The avatar doesn’t do anything Twitter-related, it’s just there to keep you company.

You can send out tweets using a ChatPad or the virtual keyboard and there’s a built-in option now to “ReTweet” messages, which is something that the basic web-based Twitter service doesn’t offer.

What does not work are the links, pictures, videos, audio, and GPS coordinates the people like to post on Twitter. Xbox Live is limited to text only.

While I can understand the lack of support for web links that require a browser, I’m a bit surprised that it can’t display photos or videos the way that some clients do (Tweetie for example) without the need to open a browser. At this point there is no connection between Twitter and video games, again It will be up to game designers themselves to build it into their games.

For most users, I suspect it will be easier to use Twitter on their laptop, cell phone, or Wi-Fi-enabled device while playing on their Xbox 360, than to use Microsoft’s solution.

1 Vs. Tens Of Thousands

Microsoft’s game show experiment, 1 Vs. 100, is a go. An official version of the game is expected to be announced soon with proper prizes and a proper schedule of air times.

The game itself will be tweaked to include more avatars in the audience in order to deliver some impressive visuals that communicate that there are tens of thousands of players connected. Microsoft says they feel that many players were confused on this aspect, not understanding that for each game session there is, in addition to the “one” and the “one hundred”, tens of thousands of others making up the audience.

Everything’s Still Beta

Although everything above is listed as launching soon or this fall, the continuous point communicated by Microsoft is that there is no fixed release date yet, everything is still undergoing testing and revision, and that there still might be changes made between now and launch. If such changes do occur, it’s likely to include some last minute, unseen features rather than to eliminate specific limitations. If there’s one change I’d like to see, it would be a special Movie Party rate to reduce the cost of having everyone pay to rent the same movie in party mode.