Microsoft confirms Zune HD, video-service tie to Xbox

A week before E3, Microsoft has let its Zune announcements out of the bag, confirming it will start shipping new Zune HD multimedia players this fall and connect them to Xbox consoles via a "connected entertainment" Zune video service.

A week before E3, Microsoft has let its Zune announcements out of the bag, confirming it will start shipping new Zune HD multimedia players this fall and connect them to Xbox consoles via a "connected entertainment" Zune video service.

The new Zune HD will feature a touch screen, built-in high-definition (HD) radio receiver, HD video output, WiFi and a built-in Internet browser. The images look largely like the promotional images leaked earlier this year (though the circle on the back of the unit which many took to be a camera actually seems to be a screw).

From Microsoft's press release:

"Zune will be a premium partner in the Xbox LIVE Video Marketplace, bringing an exciting catalog of TV and film to the platform. Zune will occupy the first slot within the Xbox user interface in the Xbox LIVE Video Marketplace, exposing the Zune brand experience to millions of new consumers for the first time. At the Electronic Entertainment Expo (E3) next week, attendees will see firsthand how Zune integrates into Xbox LIVE to create a game-changing entertainment experience."

(In other words, the long-rumored Zune VideoX service seems to be the first piece of Microsoft's long-promised "connected entertainment" scenario.)

What's your take? Is HD Radio an interesting differentiator? Will users care about access to the Xbox Live Video Marketplace content/games on their Zunes?