According to a source, Xbox's Kinect motion sensor technology will enable the creation of half-TV style, half-gaming content, which will teach kids about subjects including reading and geography through playful learning elements. National Geographic and Disney are also content partners.
The BBC iPlayer catch-up service will become available through Xbox Live, the online service for Xbox 360, next week after the two companies resolved issues over charging for BBC content.
The BBC was , but was set back by issues with Xbox's "freemium" model, which offers internet gaming for free but charges for premium video-on-demand content as part of the Gold membership scheme.
The licence fee-funded iPlayer will now be offered for free, while other video content such as Channel 4's catch-up service 4oD is only accessible via the premium membership scheme, costing £39.99 a year.
ITV Player is expected to join the service before the end of the year.
The increasing amount of content partnerships is enabling Xbox Live to provide an app-based system on the desktop that will bring it in line with the user interface on Windows 8 and Windows Phone 7.
Microsoft is investing significantly in partnership, content and marketing to change the Xbox proposition from a gaming console to a more holistic entertainment offering.
At the end of last year it was reported Xbox Live has 35 million global users and speculation is mounting it will launch a global movie rental system to challenge Apple and Amazon.
A Microsoft spokesperson said: "We do not comment on rumour and speculation."
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