This thread is speculation borne out of a snippet of a very long article between two masters of modern film, Peter Jackson and James Cameron.  The article is a great read, a worthy read, as it touches on where they see the industry heading.  An interesting comment made by Jackson was as follows:

“JACKSON: I do too. In addition to the theatrical experience, we will be seeing a lot of other forms of distribution and delivery, which is going to be interesting. We have things like Xbox Live with all the subscribers. It's not going to be too much longer before Xbox Live produces programming. There are so many opportunities there. Everybody is playing a defensive game. Nobody is going on the attack and being brave and courageous, apart from you.”

Is this the next step for M$ and XBL? Some have speculated that gaming will be an atferthought, and the box will drive straight for the heart of the entertianment center. Personally, I think that would be a mistake, but I do see, and agree with what Jackson is speculating here. Xbox Live is going to have to innovate and provide something more than multiplayer, as its defining characteristic, if M$ has any ambitions of making this a more robust and expansive service, and certianly if they want to squeeze more even revenue from the service.

Another interesting point brought up was CGI technology, and these numbers are outstanding, since can you imagine a game having these many people working on it:

“JACKSON: People are holding on to the idea of lowering the price. The vast majority of the CGI budget is labor. Unless everything goes to China or Eastern Europe in the sweatshops, that sort of approach, labor is never going to go down. It's only going to go up.

CAMERON: Because computers don't create beautiful images. People do. Down at your place in Wellington [New Zealand], we had 800 people working on Avatar for the past six months.”

WOW…800!  So, when people ask, why did it cost so much…there is your answer, that kind aof CGI cost a lot in people and time.

http://www.newsweek.com/id/227737/page/1

They already had some custom programming for XBLA, however it was not really good. Now they have The Guild on there, and the show with Amber Mcarther. If they could get some big people like Peter Jackson to get something going It will probably pick up steam.

Xbox live is the gift that keeps on giving for Microsoft in terms of profit. Im sure they will expand it in any way they can. I've seen a TV running the NXE btw.

Isn't it obvious this is the way forward? There is not much more to give from a gamers point of view from Live, I don't know what else it could do? So all this stuff is what is coming next. Sony is still a little behind, and they need to keep their lead

Expect more to come from their Primetime stuff.