We're now just days away from Microsoft's (NASDAQ:MSFT) May 21 unveiling of the new Xbox, but a leaked document suggests that the new gaming console may be a category killer of an entertainment appliance.

A leaked email is making the rounds in cyberspace and tech news site Ars Technica is reporting that in it the company admits that the new Xbox won't necessarily need an online connection for single-player games, playing Blu-ray discs, or streaming live TV. A rumor earlier this year claimed that the new Xbox would have to always be tethered to the Internet to work.

That will come as a relief to folks with spotty connectivity, but the email -- if legitimate -- also points to following Sony into embracing Blu-ray as the high-def optical disc platform of choice. Then we get to the "live TV" component, which suggests that Microsoft will work with your current cable provider but possibly result in Microsoft putting out its own TV service.

Ever since Netflix CEO Reed Hastings left Microsoft's board of directors last year, it's been speculated that Mr. Softy was readying a play for a premium video service of its own.

In this video, longtime Fool contributor analyzes the nuggets in the reportedly leaked email and concludes that Microsoft may redefine the home theater experience if it aims well this time.



Longtime Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of Netflix. It also owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.