After years of promises, it looks like the Xbox 360 will finally be able to act as a television set-top box for AT&T U-Verse subscribers, starting next month.

The news isn’t official, but Engadget got some leaked documents that spell out the deal. AT&T will release a U-Verse update on October 17, and will switch on the Xbox 360 compatibility on November 7. Just a couple gotchas: U-Verse subscribers will still need at least one AT&T set-top box or DVR in the home, and the Xbox 360 needs to have a hard drive.

The main benefit to using an Xbox 360 is cost savings. One of the documents says “No MRC for Xbox receiver,” which I think refers to monthly rental cost. Additional U-Verse receivers cost $7 per month, so subscribers could save $84 per year by using an Xbox 360 instead. Juggling fewer set-top boxes and remote controls is also a plus.

Microsoft first touted the Xbox 360′s IPTV capabilities in 2007, at the Consumer Electronics Show. Microsoft’s Mediaroom television software, which is used by more than two dozen television providers worldwide, can technically run on the Xbox 360, but until now, few providers have actually done it. In the United Kingdom, BT started supporting the Xbox 360 in 2008, but could not actually send live television to the console. In Canada, Telus switched on Xbox 360 support in August, becoming the first provider in North America to do so.

U-Verse’s arrival will be better late than never. But if the IPTV feature was available three years ago, Xbox 360s acting as second receivers would’ve almost paid for themselves by now.

Microsoft is making a yearly tradition of updating the Xbox 360, once again bringing new features to the console.

This time around, the main attractions are ESPN, Zune Pass (if you have a subscription) and a better version of Netflix. The Xbox 360 software also gets a minor face lift. Microsoft let me try the new Xbox 360 software before its public release, and while I can’t take full advantage of ESPN (more on that later), the other changes are still enough to solidify the Xbox 360′s standing as the best software experience on a game console — provided you’re willing to pay for Xbox Live.

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With almost a month to go until Microsoft launches Kinect for Xbox 360, the company released a video showing how to set up the motion sensing camera, and it’s a doozy.

The rundown is almost four minutes long (watch it at Kotaku) and runs through a list of ideal conditions you must achieve to get the best performance from Kinect. To wit:

• The camera should be in line with the television, and as close to the top or bottom as possible.
• You need at least 6 feet between you and the camera, preferably more, and three to four feet on each side.
• You’ll want to clean up clutter on the floor, so Kinect can get a good reading of the room.
• Try to have even lighting throughout the room, because dark spots can affect how the camera sees you.
• Background noise confuses Kinect’s microphones, so you must keep the camera away from speakers and subwoofers, and don’t put it on the Xbox itself.

I’m definitely feeling disqualified after going through these requirements. The coffee table in my living room would definitely have to go, and even then, space is tight. And with no overhead lights (I have high ceilings and use a tall lamp), achieving even lighting could be a problem. At least my floor is tidy.

That said, I’m glad Microsoft released this video. Being honest ahead of time about what Kinect requires is far better than pretending the camera will work anywhere. (For what it’s worth, Sony says the Playstation Move performs fine in poor lighting, but it reportedly works best when you’re eight feet from the camera. The Wii’s instruction manual says to stay at least three feet away from the TV for safety’s sake.)

Free downloadable content has become somewhat of a rarity for console video games. The fees for getting extra levels and multiplayer maps approved by the console maker, and the need to cover increasingly high development costs with post-release content, means you just don’t get a lot of freebies anymore.

Team Meat, developers of the upcoming Super Meat Boy, have discovered a workaround, at least on the Xbox 360. The game — a two-dimensional throwback platformer, like Super Mario Bros. with twisted humor — will store new level data under “Title Managed Storage,” a section of Microsoft’s servers usually used for non-essential data like weather, sports game rosters and other settings. By storing level data instead, Team Meat can offer new Super Meat Boy levels at no extra charge, and at no cost to them.

To boot, what a quote from Super Meat Boy co-developer Tommy Refenes (asterisks mine): “In a world where it costs $2 to unlock content in a game that you’ve already purchased it is nice to have the power to totally say ‘f*** you’ to that system and go our own way.”

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More than a year old, “Milo” is still Kinect for Xbox 360′s most impressive tech demo. Sadly, Kotaku’s unnamed sources say the project has been cancelled.

The sources say the technology behind Milo will be put to use in another game based on Fable, a series of role-playing games developed by the same studio that put Milo together. But Milo himself is, reportedly, no more.

Milo debuted during E3 2009, when Kinect was introduced under the codename Project Natal. In a video, shown at Microsoft’s press conference, a young boy on the screen interacted with an older girl in real life.  Milo referred to the girl by name, responded to what she said and how she said it, and could even recognize a drawing that the girl showed to Kinect’s motion-detecting camera.

With Kinect due to launch in November, supported mostly by simple, casual games, Milo remains fresh in the mind. It’s a sign of Kinect’s potential even as Microsoft sees fit to mimic the Wii’s stable of sports, exercise and racing games out of the gate.

I’d love to see more than just mini-games from a device that can recognize movement, facial expressions and speech. Hopefully, the supposed Fable tie-in game will do great things, but I’m sad that such a powerful and simple concept — hanging out with an avatar — isn’t coming to Kinect any time soon, even if it’s a little bit creepy.

Since the dawn of the gamepad, console makers had to make a tough decision with each new iteration: Disc-shaped directional pad, or traditional plus shape?

Microsoft thinks it can choose both with a new wireless controller for the Xbox 360. Like the existing Xbox 360 controller, the new model starts in a disc format, which is ideal for sweeping motions that connect one direction to the next. Players can also raise up the plus-shaped portion of the D-pad by rotating it, allowing for more distinct directional presses. This is intended to appease fans of fighting games like Street Fighter IV, who need the accuracy when stringing together button combinations.

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This wasn’t entirely unexpected, but Microsoft announced that it’s raising the price of Xbox Live Gold, effective November 1.

Yearly subscriptions will increase from $50 to $60, quarterly subscriptions will jump from $20 to $25, and monthly subscriptions will go up from $8 to $10. Before the price hike, Microsoft is giving subscribers a chance to get one more year for $40, effectively negating the new price until 2012. Joystiq points out that several retailers are also selling $40 yearly subscription cards, which you can stock up on now and use over a longer period of time.

The troubling thing about this price hike is not so much the $10 difference itself, but the feeling of powerlessness that it instills.

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If you lack scruples, you might be interested to know that some hackers found an early version of Halo: Reach on Xbox Live, stole it, and put the code on file-sharing websites.

Personally, I can wait until Halo: Reach’s September 14 launch date. What piqued my interest was the means by which the hackers took the game.

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Gizmodo’s Matt Buchanan got a lengthy tour of Microsoft’s Kinect for Xbox 360, the upcoming gaming peripheral that detects 3D motion with a camera and captures audio with microphones. His conclusion? This is the future for Microsoft, an idea with boundless possibilities that will spread far beyond gaming.

One project manager said Kinect’s technology could some day allow Star Trek Holodeck-style environments, no joke.

Pondering this, I can’t help but draw parallels to the way Apple has approached multi-touch. After popularizing two-finger scrolling in MacBooks, and gestures like pinch-to-zoom on the iPhone, Apple has steadily expanded the role of multi-touch in all its computer products. First came the multi-touch Magic Mouse, then the iPad, and now the Magic Trackpad. Apple put its faith in flat, pressure-sensitive surfaces, and it’s paying off. Microsoft is investing in the air, and hopes to see a similar expansion.

Motion control and multi-touch are not all that different in spirit. Both input methods are supposed to feel natural, as if there’s no barrier between you and the machine. This is especially true with Apple’s iOS devices, with which you interact simply by touching what you see. On the downside, neither input method solves the problem of physical feedback; anyone who’s tried typing on an iPad without looking at the keys should understand why that’s an issue.

For now, Microsoft and Apple are not having an input war. Multi-touch emerged from personal computing, and remains entrenched in it. Kinect’s origins are entertainment, and the technology will probably work back to the computer as an accessory for multitmedia and communications.

To oversimplify, Microsoft’s trying to kill the game controller and the remote control, and Apple wants to slay the mouse, and maybe the keyboard, but it’s clear that both companies have input revolution on the brain. They complement each other beautifully.

When I tried NBA Jam at E3, it seemed like a faithful remake of Midway’s classic two-on-two arcade basketball game from the mid 1990s, but the Wii’s limited processing power makes online play unlikely when the game arrives in October.

The announcement of NBA Jam for Xbox 360 and PS3, with their elegant systems for multiplayer, seems like great news, except it comes with a couple of serious catches.

First, the only way you can get NBA Jam for Xbox 360 or PS3 is with a free download when you purchase NBA Elite 11, EA’s more traditional basketball game.  That’s not such a bad deal, because you’d get two games for the price of one, but with that offer comes another gotcha: The downloadable version of NBA Jam is not the full game. Only the Wii version has the “Remix Tour” mode and “boss battles” against basketball legends such as Larry Bird and Magic Johnson. These features reportedly add another 20 hours to the game.

EA has put gamers in an tough position, where they’re deciding not just what console they’d rather play on, but which features are more important. While I agree with EA Creative Director Trey Smith playing NBA Jam against someone in the same room is part of the classic experience, playing against someone across the country is part of modern gaming.

I’m guessing this bizarre feature split was the only way EA could get NBA Jam on all three consoles, after announcing it as a Wii exclusive in January. For Nintendo, it’s a guarantee that not all buyers will jump ship to the version with multiplayer, but for gamers, it’s a lose-lose.

Ever wish you could play Gears of War for Xbox 360 against someone who owned the PC version, or vice versa? Microsoft reportedly did too, but might’ve killed the concept of PC vs. Xbox 360 gaming because console controls just aren’t accurate enough.

That’s the rumor coming from Rahul Sood, the founder of Voodoo PC and chief technical officer of HP’s gaming business. He cites “reliable sources” who say Microsoft was working on a way for PC gamers and Xbox 360 gamers to play together, but problems arose during testing. Mediocre PC gamers were able to wipe the floor with even the best console players, because the PC’s mouse-and-keyboard combination was so precise.

Sood doesn’t say definitively that Microsoft killed the project because of the accuracy issue, but he lays heavy blame on Microsoft for not seeing the project through. The rest of his blog post is a ramble on the decline of PC gaming, the threat from Apple and a strange plug for WebOS game development (“and while it may take time for new devices to start showing up, you can rest assured that the wait will be worth it”).

If Microsoft was working on a way to connect Xbox 360 and PC gamers, control differences seem like a petty reason to ax the project. Why not require PC gamers to use an Xbox 360 controller in order to dive in with the console crowd? Or limit connected play to cooperative games such as Borderlands, instead of competitive ones in which the PC gamer has the advantage?

I hope Microsoft revisits (or visits) the issue some day, especially with Windows Phone 7 presenting its own opportunities for gaming. If Microsoft really wants to unify the PC, television and phone, there needs to be a way for gamers to interact across all three platforms.

Microsoft has cleared up a couple of rumors about a new Xbox 360 model and the Kinect motion-sensing camera, revealing prices and details for both.

The Kinect camera, bundled with one game, will cost $150, the same price Microsoft posted as a “an estimate only” to its online store a month ago. The game is “Kinect Adventures,” a collection of minigames that includes jumping and ducking to avoid obstacles on a moving platform, and moving back and forth in a raft to navigate through rapids.

Microsoft also has a new Xbox 360 model coming August 3, priced at $200 without Kinect. Like the one spotted on Amazon Germany last week, the basic Xbox 360 has a 4 GB flash drive and built-in 802.11 n Wi-Fi. Later this year, the console will be bundled with Kinect and Kinect Adventures for $300. No word on whether the 250 GB console model will get a Kinect bundle.

I’m glad Microsoft went with Kinect Adventures for the console bundle. I tried it at E3, and though it’s not a shining example of what Kinect could be, it’s a better tech demo than Kinect Sports, another minigame collection that just seems too much like Wii Sports. (For that matter, running in place for the hurdles minigame was too much like the Power Pad.)

Microsoft is promising more than 15 games at launch, including Dance Central, arguably the best use of the technology yet. The game is like Guitar Hero for dance, prompting the player to perform full-body dance routines and scoring for accuracy. In another strike at the Wii, Dance Central will cost $50, not $60 like most Xbox 360 games.

Kinect is coming in November, with pre-orders available now. I’m interested in theory, but still waiting to be wowed by the software. That didn’t happen at E3.

One of Xbox Live’s most innovative features, the online game show 1 vs. 100, won’t return for another season.

If you missed it, 1 vs. 100 was a trivia show in which one contestant would try to outlast a “mob” of 100 others, each of whom face elimination with wrong answers. Players who weren’t competing could still answer questions from the sidelines, with a chance to rotate into the main game. Semiweekly live shows, hosted by comedian Chris Cashman, offered prizes to the winners.

The game was included with an Xbox Live Gold subscription, and at one point attracted more than 60,000 players to the live show. Microsoft didn’t say why it canned the show, only noting that the development team will move on to other projects. It’s rumored that the original 1 vs. 100 television show, hosted by Bob Saget for two seasons on NBC, could return, so maybe that was an issue for Microsoft.

Whatever the reason, I hope Microsoft comes up with a suitable replacement. As several commenters on Kotaku wisely point out, 1 vs. 100 is a social, casual game that draws in exactly the same crowd Microsoft will try to capture with the Kinect motion-sensing camera. And Kinect support seems like an obvious choice for game shows; imagine waving your arms in celebration and seeing an avatar do the same, or raising your hand to answer a question and speaking the answer.

Kinect aside, the idea of a massive multiplayer online game show is just plain cool. Half the fun of watching game shows on television is trying to answer questions yourself, and 1 vs. 100 let spectators do that by sectioning non-players into small groups to compete amongst themselves. I think 1 vs. 100 had a chance to revolutionize game shows, but like an anxious TV network, Microsoft pulled the plug too soon.

Microsoft has gone quiet on the fate of Xbox 360 Arcade, a cheaper, feature-barren version of the main console, but that’s not stopping Amazon Germany from sharing some secrets.

The online retailer now lists an “Xbox 360 Arcade System Bundle 4 GB.” There aren’t any other details available besides that one line, which is at least enough to tell us that Microsoft could significantly boost the low-tier console’s storage capacity.

As the Xbox 360 gained better specs over the years, the stripped-down model improved as well, going from wired to wireless controllers and gaining an HDMI output while dropping in price, eventually to $200. But the Arcade console was held back by a mere 256 MB to 512 MB of storage capacity. The main console’s 120 GB hard drive and wired headset was worth the extra $100 if you planned to download games or play online.

The latest Xbox 360 model has a 250 GB hard drive and built-in wireless. That’s a pretty good deal, but with Microsoft now allowing Xbox 360 storage on USB sticks, it’s possible to have plenty of storage on an HDD-free console for cheap. Put together a 4 GB console and a 16 GB USB stick, and you’ve got the same amount of room as my late 2007 model, which has served me well so far.

Three things will be worth considering when Microsoft actually confirms a cheaper console: Will it have built-in wireless, will this bundle include Kinect, Microsoft’s motion-sensing camera, and of course, how much will it cost?

For now, Microsoft has scrubbed all mention of Xbox 360 Arcade from its Xbox landing page. If you want a bargain on what could soon be outdated goods, Amazon and Target are both selling old Xbox 360 Arcade bundles, with two games, for $150.

Microsoft let E3 come and go without a word on the price of Kinect for Xbox 360, but now the Microsoft Store lists a tentative price of $150 for the motion-sensing camera.

“Official pricing has not been announced,” warns the site. “$149.99 is an estimate only and subject to change.” MSNBC cites a Microsoft representative who said that price is based on retailer estimates. Last week, Gamestop started selling Kinect for pre-order, also for $150.

As PC World’s Matt Peckham speculates, Microsoft wants to start selling these things ASAP, and it’s better to offer a worst-case price and drop it before launch if necessary.

Still, why hold off on an official price during the big show? I can guess at a few reasons:

• Microsoft really hasn’t figured out pricing yet, or thinks it can bring the cost down between now and November 4.
• Microsoft is still figuring out bundles — both with Xbox 360 hardware and with Kinect games — and doesn’t want to make a big announcement on pricing until everything’s squared away.
• The general attitude in the press is that $150 is too expensive for Kinect (I beg to differ). Announcing a price at E3 could’ve derailed the product’s flashy debut.
• A tentative price lets Microsoft see how many people are interested by the E3 buzz alone.

I imagine the answer is a combination of all those factors, but its kind of silly to sell something at a placeholder price in any case. I hope Kinect’s real price stops being a mystery in a week or so.

Short on shocking moments and big reveals, Microsoft pulled the trump card at the end of its E3 press conference today: Everyone in attendance would get a brand new, redesigned Xbox 360 for free. For all the journalists in the audience, it was time to make an ethical decision. For the rest of us, it was suddenly clear why Microsoft chose a small venue for the event, forcing many reporters, myself included, to watch via live video feed.

Microsoft’s new Xbox 360 model ships today. It’s not officially dubbed the Xbox 360 Slim, but it’s smaller than its predecessors and includes a 250 GB hard drive and built-in wireless n. Previous models had only wired Ethernet jacks and maxed out at 120 GB hard drives. The new Xbox 360, which comes only in black, sells for the same $300 as the current Xbox 360 Elite.

The new Xbox 360, and its subsequent gifting to the to the press, were among a few surprises dotting an otherwise lackluster press conference. Most of the games Microsoft showed off were obvious Xbox 360 exclusives, and looked just as predictable in action. Halo: Reach was more Halo. Gears of War 3 was more Gears of War. Call of Duty: Black Ops was more Call of Duty. And almost every Kinect game on display had already debuted the night before (the exception being Metal Gear Solid: Rising, which may support motion-controlled sword combat). The conference’s only new blood was a game codenamed Kingdoms, and its short teaser video had so little concrete information that the game is hard to get excited about.

But for existing Xbox 360 owners, at least there was ESPN. Rumored by the New York Times in January, ESPN for Xbox 360 will offer more than 3,500 live and on demand sporting events, including Major League Baseball, the NBA, soccer, college football and college basketball. No mention of the NFL, which has lagged on new media in general. In addition to the games, Xbox 360′s ESPN support will include trivia, highlights and voice activation with Kinect. Best of all, it’s free for Xbox Live Gold subscribers. The unanswered questions: When will the service arrive, and how subservient will the live broadcasts be to cable and local broadcasters?

Strangely, Microsoft announced a November 4 launch date for Kinect, but no price, nor any console bundles. Maybe the previous rumor of $150 is still in dispute.