UPDATED Microsoft launching Xbox tablet, Barnes & Noble denies involvement

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Microsoft (NASDAQ:MSFT) is poised to unveil a Windows 8-based tablet reportedly highlighted by Xbox Live gaming capabilities.

Multiple reports indicate Microsoft will officially introduce the tablet during a media event slated for late Monday afternoon. Sources tell TechCrunch the unnamed tablet represents the first non-Xbox device to integrate Xbox Live streaming. Earlier this month, Microsoft announced Xbox SmartGlass, a cross-platform application enabling consumers to interact with their Xbox 360 entertainment console via smartphone, tablet or PC. Optimized for Microsoft's Windows Phone and Windows 8 as well as rival operating systems like Apple's (NASDAQ:AAPL) iOS and Google's (NASDAQ:GOOG) Android, the free Xbox SmartGlass app delivers companion content for interacting with games, videos and music on the Xbox platform.

Although many reports stated bookseller Barnes & Noble worked closely with Microsoft on the product, Barnes & Noble has since denied its involvement, telling The Verge "We are not part of their announcement." The retailer's removal from the equation calls into question what else will differentiate the tablet from competing devices like Apple's iPad and Amazon's Kindle Fire. Multiple sources indicated the tablet would emphasize mobile entertainment experiences similar to those available on Barnes & Noble's Android-based Nook Tablet, introduced in early November and touting a wealth of e-books, mobile applications and HD video content.

Barnes & Noble's denial also clouds the details of its relationship with Microsoft. In April 2012, Microsoft invested $300 million into a new Barnes & Noble subsidiary dedicated to advancing the bookseller's digital content strategy. The unit, tentatively named Newco, merges Barnes & Noble's digital and college businesses; the retailer owns approximately 82.4 percent of Newco, which will operate in association with the company's retail stores, and Microsoft owns the remaining 17.6 percent. Microsoft previously stated it will integrate B&N's Nook digital bookstore into the Windows 8 operating system, which is expected to roll out this fall.

Even without complementary bells and whistles, Xbox Live integration could prove a potent selling point. Microsoft has sold 67 million Xbox 360 consoles in seven years on the market, fueling sales by incorporating entertainment content including Netflix video streaming and Last.fm digital music services.

"Telling compelling marketing stories to consumers for the most part is not something Microsoft has demonstrated an ability to do," said Michael Gartenberg, an analyst at market research firm Gartner, in an interview with Bloomberg. "Obviously, Microsoft is hoping this will be another Xbox."

For more:
- read this TechCrunch article
- read this Bloomberg article

Related articles:
Microsoft launches Xbox SmartGlass cross-platform app
Microsoft invests $300M into new Barnes & Noble e-book business
Barnes & Noble explores spinning off Nook e-reader unit
Hulu Plus, Netflix integration highlight Barnes & Noble's Nook Tablet
Barnes & Noble's Nook e-book sales quadruple year-over-year

Updated June 18, 2012 to reflect Barnes & Noble's statement.

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