Microsoft is releasing a software update for its Xbox 360 games console that will allow users in the UK to watch TV programmes and films on demand via partners including Channel 4's 4oD service, Channel 5's Demand 5 and LoveFilm, with BBC iPlayer set to follow suit next year.

The free software update will be downloaded automatically by all internet-connected Xboxes today, with the new content available to members of the Xbox Live Gold scheme, which costs around £35 per year.

Programmes and films can be accessed via a revamped Xbox dashboard, which uses Microsoft's Bing search engine. Owners of the Kinect motion sensor will be able to use its voice recognition technology - similar to Apple's Siri for the iPhone 4S - to search by "talking" to their TVs. They will also be able to browse TV content using the controller-free motion recognition technology.

Xbox already have a partnership with Sky TV, allowing subscribers to watch live channels as well as accessing on-demand products - including a huge Sky Movies database - through their console.

The update will also allow hands-free and voice-activated browsing of YouTube and Microsoft's online media store Zune.

The developments have been described by experts as “revolutionary”, with James McQuivey of Forrester Research saying: “Microsoft has just built and delivered it: a single box that ties together all the content you want, made easily accessible through a universal, natural, voice-directed search. This is now the benchmark against which all other living room initiatives should be compared.”

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Fifty-seven million households worldwide currently own an Xbox.