Microsoft announces an alliance with Netflix will stream movies over the internet to the Xbox 360 video game console. Microsoft announced the move at the opening of the E3 video game convention in Los Angeles. The deal will allow owners of the Microsoft video game console to access 10,000 movies offered by Netflix - twice as many as Netflix previously offered over its internet streaming service to PCs.

To use the new service, Xbox 360 owners must subscribe to the Netflix monthly subscription service which costs a minimum of 9 dollars for unlimited streaming. They also must have a 50-dollar annual "gold membership" to the Xbox 360 online service. Currently about half of Microsoft's 10 million Xbox 360 owners in the US subscribe to the service.

Though Netflix currently relies mostly on sending DVDs to subscribers via the postal service, movie downloads are gaining in popularity and the alliance with Microsoft marks an important step in transitioning the company to an all digital service.

For Microsoft, the deal represents progress in its aim to make the Xbox 360 the hub of the digital living room and a complete entertainment control center.