Nearly 40 entertainment content providers will offer content to the online service, including Bravo, Comcast, HBO GO, Verizon FiOS, and Syfy in the U.S.
Worldwide partners include the BBC in the U.K., Telefonica in Spain, and Rogers On Demand in Canada.
Current content partners include AT&T Inc., Netflix Inc. and Hulu Inc.
The Kinect sensor bar will offer voice and gesture controls for TV programming.
Additional features include the ability to watch the same TV program with other Xbox Live members.
The Xbox Live division currently holds 35 million subscribers worldwide that spend 2.1 billion hours a month on the service.
Microsoft in July said the Entertainment and Devices division, which includes the Xbox business, recorded revenue of $1.48 billion, an increase of $1.41 billion one year earlier.
The division held operating profit of $32 million compared to a loss of $172 million one year ago.
Microsoft sold 1.7 million Xbox 360 units in the quarter, an increase of 18 percent from year prior.
The Xbox 360 Call of Duty: Modern Warfare 3 Bundle, to be sold Nov. 8, will include an Xbox 360 320GB SKU with custom Modern Warfare 3 graphics and sounds, two custom wireless controllers, special Avatar items, Bluetooth Headset, and a copy of Modern Warfare 3 at $399.99.