Hot on the heels of the news that Youtube are to start streaming live sports, it looks as though Microsoft are also looking to show live sports streams via the xbox 360 console. Microsoft are said to be in significant talks with Disney to stream ESPN’s live sports TV shows through the console. Its not all great news though as owners would have to pay a subscription before gaining access to the streams.

To complement the service, Microsoft might develop tie-in games for ESPN, according to the New York Times source, although the company and Disney are still in the middle of negotiations so the facts are a little sketchy.

The initiative would be part of a larger strategy that has already included some live TV on xbox such as the Sky satellite tv broadcasts on the Xbox in the UK. Microsoft’s Mediaroom is also rumored to be coming to the Xbox 360 and would give gamers their IPTV service through their consoles.

Microsoft has declined to clarify the ESPN rumor but makes no secret of the fact that it wants “as much content as possible.”

Microsoft want to not only compete with rival console from Sony, the PlayStation 3 but also dedicated media hubs like Apple TV and Roku’s Internet Player. These devices, as well as North American Xbox 360s, still focus almost exclusively on pre-recorder content, such as rentals from the iTunes Store and Zune Video Marketplace or on-demand viewing from Amazon and Netflix.

Apple may be indirectly stepping up pressure on Microsoft as rumors have circulated of an iTunes TV subscription in negotiations that would supply downloads of most TV shows for a flat monthly fee.

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