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Using voice commands and Kinect to find content in the revamped Xbox Live dashboard.

Six years after the original Xbox 360’s debut, Microsoft this week is overhauling its video-game console, again, with a big software update that attempts to cement the company’s place in the living room. It also continues the expansion of the console beyond the world of games.

The Xbox Live update, rolling out this week, includes an overhauled Netflix interface. (Click for larger image.)

Changes include the addition of new TV programming, new third-party apps, integration of Microsoft’s Bing search technology, the release of a companion Windows Phone app, and new social networking features that make it easier for users to tell friends what they’re watching or playing, to help them connect.

But more notable, as a sign of our changing relationship with machines, is how the update makes the Kinect sensor and its speech-recognition feature a bigger part of the experience.

Kinect, with its built-in microphones and sensors, will be integrated broadly across the Xbox Live dashboard as an optional alternative to the traditional controller for finding content and navigating menus with voice commands and gestures. These capabilities had previously been limited to the Kinect Hub in the main Xbox 360 interface, but now they’re native.

“You’ll find that the experience is a lot different,” said Lisa Worthington, a senior product manager for Xbox Live. “It doesn’t feel as clunky. You’re not waving to go into a Kinect Hub. It’s all naturally integrated.”

Users can navigate the console by saying “Xbox” and a desired destination, such as a menu title. To search for a piece of content, they’ll say “Xbox … Bing” and then the title or other details (such as an actor’s name) from a piece of content they’re trying to find.

Yes, get ready for some strange looks from the rest of the family — at least until they get comfortable with the notion of talking to the television.

The Beacons feature is meant to streamline the process of connecting with friends on Xbox Live. (Click for larger image.

Microsoft isn’t the only company aiming to use voice commands to improve upon the television remote. There’s also speculation that Apple will integrate its Siri intelligent assistant into its next-generation television technology, based on comments made by Steve Jobs to his biographer, Walter Isaacson, before the Apple co-founder’s death.

Like the release of the Kinect peripheral last year, the Xbox 360 software update is designed to keep the Microsoft console fresh in the competition with Sony’s PlayStation 3 and Nintendo’s Wii. Microsoft has been consistently outpacing its rivals in U.S. sales, but faces stiffer competition from those rivals worldwide.

The Xbox team doesn’t expect voice commands to completely replace the controller for navigation. Kinect remains an option, not a requirement. In fact, the company says many people will end up using a combination of voice commands, gestures and the controller, depending on the situation.

“The key advantage (with voice commands) is when it’s time to do text entry, when you’re looking for something like Star Trek, like a director’s name, or an actress’ name,” said Mike Suraci, lead product manager for Xbox Live, demonstrating the new interface. “This controller becomes not very useful.”

Microsoft’s free Xbox Live update rolls out on Tuesday.

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