Rumor: Microsoft to Partner with Netflix for X360 On-Demand Movie Downloads

Speculation is flying over a possible announcement of Netflix on the Xbox 360 at this week's GDC, MSNBC reports.

Suspicions of a partnership arose last week when a survey, distributed by Netflix, asked clients if they would make use of streaming movies and television shows on their Xbox 360s if such a service was provided. Microsoft's history of making big announcements at the Game Developers Conference—like the Xbox and the Xbox 360—leads some to believe that the partnership will be officially announced this week.

The most compelling evidence for such a team-up is that it makes good sense for both parties involved; Netflix wants to be in every internet-capable device imaginable, and Microsoft wants the Xbox 360 to be the one-stop media machine in every household.

"A partnership with Netflix gives Microsoft a partner that already streams movies to over 7 million subscribers through their PCs, and encourages these subscribers to sign up for the Xbox Live service in order to stream movies to their TVs," says Wedbush Morgan analyst Michael Pachter. Meanwhile, Netflix would have direct access to over 10 million Xbox Live subscribers—many potential new customers.

Microsoft would not comment on the rumor, telling MSNBC to simply "stay tuned". If the rumors turn out to be true, an announcement will likely come later this week, in the latter half of GDC.