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Microsoft’s overhauled Xbox Live dashboard, rolling out this week, marks the start of a new effort by the company to change the way people interact with ads on television screens, using its Kinect motion sensor.

The initiative shows how Microsoft is trying to grab a larger slice of the TV advertising market as it continues to expand its Xbox 360 console beyond video games.

According to a Microsoft Advertising blog post this morning, the new dashboard is launching with more than 100 campaigns known as Branded Destination Experiences — portals within Xbox Live dedicated to specific advertisers, letting people use Kinect gestures to interact with the content.

It’s a first step toward a new type of TV commercial that Microsoft calls “NUads,” where people will be able to use voice commands and gestures to interact with an ad — for example, telling the console to find a nearby retailer selling the advertised product.

Within the revamped Xbox Live service, Microsoft says it will also be working with entertainment providers including the Today Show to sell standard 30-second television ads inside their content on Xbox Live. The ads will be similar to those on broadcast and cable television, but sold specifically for the Xbox Live experience.

“This makes Xbox LIVE the largest next generation TV platform to offer advertisers the ability to purchase 30 second TV spots within entertainment content,” writes Microsoft Advertising’s Shawn McMichael in the post. “It also makes Xbox the only place on TV where advertisers can use the power of gesture to engage with audiences.”

The effort dovetails with Microsoft’s move to increase the amount of television content available in the new Xbox Live dashboard.

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