E3: Microsoft's living room dream coming true through Xbox

One of the coolest things about playing games on the Xbox 360 is trash-talking with players throughout the Internet. I don't know if it "trash-tweeting" would have the same effect. But that will be for the players to decide later this year.

News out of E3, the big video game show held in Los Angeles every year, is that Microsoft is integrating Twitter, Facebook and music streaming service last.fm into the video game system this fall. (Disclosure: Last.fm is owned by CBS, parent company of ZDNet.)

It's a big move for Microsoft but not just because of the features - microblogging, photo sharing and so on - that are coming to the gaming console. These sort of advancements - like the addition of Netflix movies last fall - prove that Microsoft's vision of the digital living room is finally starting to gain some traction.

I'll give Microsoft this much: it never gave up on that dream of the digital living room. I remember the mock homes that Microsoft would set up, year after year, in the parking at the Consumer Electronics Show in Vegas. Sure, every once in a while there would be a cool gadget spotted during that house tour but the concept itself - a digital home where appliances and devices talked to each other and shared content - rarely gained any real traction.

It always felt like Microsoft was offering pie-in-the-sky kind of stuff that always seemed to involve putting a PC in the entertainment center. It was hard to envision in my own living room.

But downloading a movie or tapping into the Facebook photo albums from a WiFi-enabled video game console that's connected to the big screen in the living room no longer seems like that much of a stretch of the imagination.

As an added bonus for fans of the never-ending Microsoft vs. Apple rivalry, this is one area where Microsoft is clearly ahead of the game.

Apple has largely ignored its living room product, AppleTV, calling it a "hobby" product and showing only slight interest in the movie rental side of the business. Apple's interest in gaming is pretty much limited to the game apps for the iPhone/iPod Touch - so in that sense, Microsoft and Apple aren't playing on same battlefield. At least one analyst has made bold predictions about Apple TV  - but, as of now, they're still just predictions.

I don't say it often but... Score one for Microsoft for turning the Xbox into a full digital experience for the living room. At some point, television programming will transmit over the Internet and leave the cable box/satellite receiver as obsolete as a VCR. When the time comes for the mainstream to put an Internet-connected device under the TV (assuming the TV itself isn't Internet-connected), the Xbox will already be there.