The service launches later this year and will offer a range of linear TV channels, as well as a library of on-demand content. A number of subscription packages will be available, as will the opportunity to access programming on a pay-per-view basis.
Xbox owners who already have a Sky TV subscription will be able to access Sky Player’s on-demand services through their console, in addition to their PC or Mac.
The service will also allow users to IM each other, check news, access fixtures and any other on-demand information.
BSkyB wouldn’t say whether the deal with Microsoft was exclusive, although sources said that this is unlikely.
Similar deals could eventually be struck with Sony’s PlayStation 3, Nintendo’s Wii and Project Canvas, the appallingly named catch-up TV service in development by the BBC, ITV and BT.