Up until now Microsoft has offered two tiers of Xbox Live service. The first is Silver level which is completely free and gives you basic access to online features and the Xbox Live marketplace. Gold membership is the paid-for upper tier that adds multiplayer, access to services like Zune and Last.fm, as well as Video Kinect features.
We thought Xbox Live would stay at two tiers for the rest of this console lifecycle, but we were wrong. Microsoft is apparently going to unveil Xbox Live Diamond during E3 next week.
The new feature that Diamond level brings is the addition of Microsoft’s very own subscription TV service. With it, Microsoft will be in direct competition with other settop box service, but Microsoft has a major advantage for a new entrant due to the millions of Xbox 360 consoles already sitting under TVs in homes across the U.S.
The TV service is expected to fully integrate with the existing live sports offerings, music services, and Kinect control/avatars. It’s apparently something Microsoft has been working on for a while under the codenam Orapa. That suggests quite a healthy line-up of content from launch and on display next week.