Microsoft is in talks with the BBC to bring the broadcaster's library of content, including high definition TV programmes, to Xbox Live.
Video content is already available via Live in North America, where Microsoft has signed agreements with partners such as Disney, MTV and CBS.
As reported by the Sunday Times, the company is now speaking to the BBC and other European content providers about similar deals.
The news was confirmed by Ross Honey, senior director for media at Microsoft‚s content and partner strategy group. He said Microsoft is keen to offer BBC programmes via Live including high definition shows such as Planet Earth.
"We are working diligently on multiple fronts to make it happen," he said, adding, "The BBC is a great content provider."
At last month's Leipzig GCDC, Sony announced plans to launch a TV tuner with PVR functionality for PlayStation 3. The company has also signed a deal with Sky to offer content via PlayStation Network on a pay-per-view basis.