The service could be similar to Sky Player, which currently offers live TV and a selection of pay-per-view content over the Internet. We’ve had a demo of Sky Player and have been very impressed by the picture quality of the live streaming. So its arrival on the 360 would only be a good thing. It’s worth noting that Sky Player uses Microsoft Silverlight, so it’s wouldn’t be a massive surprise for the two of them to be working together on this little enterprise.

If this were to happen, it’s reasonable to assume what’s currently available on Sky Player will be the same on the Xbox service. That would mean you’d get access to live sport, news and a selection of Sky’s partner channels, such as G.O.L.D and the History channel. That would bring the promise of pay-per-view TV too, which is great if you want movies on-demand.

There’s some interesting competition here. Microsoft already provides a selection of movies to download via its Marketplace, so we wonder how this crossover with Sky will work. Will Sky’s pay-per-view allow you to pay with pounds sterling, or will you need to use those idiotic Xbox points? There’s also been no word on HD content — we’re going to assume this will be a strictly standard-definition offering, at least at the start.

We have to say, the idea of being able to access Sky through the 360 excites us. It will bring Sky to more homes too, because people who can’t put up a dish might decide to use this system to get access to Sky’s excellent sports service. It’s also interesting to ponder how Virgin will react to this. Imagine that people who have a Virgin TV package decide to cancel it in favour of using this service, but use Virgin broadband to do it. Surely that’s going to test the already fragile relationship between the two companies.

There’s no firm word on a launch date, as yet, and no indication what it might cost. If the service is like Sky Player on a computer, it will need a multi-room subscription and you’ll get access to the same channels as you do on your TV. You won’t need an existing Sky subscription either, so anyone with a fast Web connection and some cash to spend will be able to sign up.