An upgraded version of Microsoft's Xbox Live online gaming service is set for debut around E3, Reuters reports today, echoing earlier speculation regarding improvements to the Live system. New features reportedly include voice communication-enabled lobbies outside those of individual games, where players can meet to chat and arrange games, and more advanced media-playing capabilities.
While the aforementioned features will be more useful to those who just want to play games online with their Xboxes, the latter holds out interesting possibilities for turning the system into an all-in-one game and media player. The "Xbox Music Mixer" (a term used by Reuters) would allow users to download music and Windows Media movies from their computers to their Xbox hard drives and play them on the system.
With Sony set to debut the PlayStation 2 hard drive and its accompanying digital media features at E3, it would make sense for Microsoft to counter with similar features for Xbox Live.