Microsoft Stops Helping Rivals by Selling Mediaroom

Sale to help Microsoft focus on bolstering TV services to next Xbox 360, tablets and smartphones.

Microsoft has apparently been distracted in its push to turn its Xbox 360 videogame console into a central hub for TV in homes — more like annoyed that it’s been helping rivals improve their own set top boxes that do the same thing.

The company announced early Monday that it is selling its Mediaroom business to Ericsson. Financial terms  were not announced.

The sale makes Ericsson the dominant provider of IPTV technology — which enables TV broadcasts to be delivered over the Internet — with over 25% market share.

Microsoft can now focus fully on building out the technology inside its next generation Xbox 360 that will enable users to watch and interact with TV programming.

Based in Mountain View, Calif., Mediaroom is the technology that runs AT&T’s U-verse and set top boxes from Deutsche Telekom, Telefonica and Telus. Company launched as Microsoft TV in 2007 and now employs 400.

Because of that, Microsoft had two businesses: One that supplied IPTV services to the Xbox 360, and another that made middleware for rivals competing for shelf space in crowded entertainment centers in the livingroom.

With 76 million people worldwide spending more time watching entertainment on their Xboxes than actually playing games, Microsoft will now dedicate “all TV resources to Xbox in a continued mission to make it the premium entertainment service that delivers all the games and entertainment consumers want — whether on a console, phone, PC or tablet,” wrote Yusuf Mehdi, a corporate VP for Microsoft’s Interactive Entertainment Business, on the company’s blog. “We believe the future of home entertainment is one where TV becomes more simple, tailored and intelligent. We believe the best is yet to come for this industry.”

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