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How Microsoft Is Taking Netflix Head On

Updated from 11:11 a.m. to include information on Amazon and Hulu in the ninth paragraph.

NEW YORK (TheStreet) -- It all started with Time Warner's (TWX) HBO doing original series, with shows like Sex & the City and The Sopranos. But now, as Netflix (NFLX) takes the original content race into the 21st century, everyone, including Microsoft (MSFT), wants in on the act.

Microsoft announced Xbox Entertainment Studios will be unveiling a ton of original programming set to hit the Xbox One, Xbox 360 and other Microsoft devices (Microsoft Surface, Windows Phones?), starting in June. The programming includes a multitude of different genres, such as documentaries, sci-fi, comedy and much more. There are 12 different projects, with some already in production, while others are still in development. Perhaps the most notable is a television series on Halo, Microsoft's hit video game, to be produced by movie director Ridley Scott. Microsoft noted that this project is separate from the one Steve Spielberg is working on, adding Spielberg will "executive produce the live-action TV series, created in partnership with 343 Industries and Amblin Television."

Other shows already in the works "are an unscripted series about international street soccer, an original drama about robotic servants in a dystopian world, and a documentary about the search for discarded Atari games in a desert landfill -- which were unearthed yesterday in New Mexico -- amongst several others," the company said in the press release.

"We are developing premium, original content for the Xbox community which is an audience we are incredibly respectful of," said Nancy Tellem, president of Xbox Entertainment Studios, in the release. "We believe Xbox Originals should embrace the way our fans think about traditional TV." Tellem's creative vision involves year-round, high-quality programs based on subjects gamers care about, with interactive features tailored to each show.

Tellem joined Microsoft in September 2012 from CBS (CBS), where she was the president of CBS Entertainment. Tellem noted that from her television experience, she knows creating hit shows isn't easy, tempering expectations for Xbox's content.

"I know full well from my years spent at traditional TV networks that creating a lineup of hit shows isn't easy. It's the beginning of a long journey, but we're incredibly excited to be on our way," Tellem said.

As more companies like Netflix, with its hits such as House of Cards and Orange Is the New Black, realize original content is key to keeping consumer eyeballs, Microsoft is working with Hollywood to create even more content than it has before. "Microsoft has a long and rich legacy in the content business," said Jordan Levin, executive vice president of Xbox Entertainment Studios, in the release. "Games have been part of our DNA for at least the last 15 years, and creating original TV content is a logical next step in our evolution."

The business model seems to be working for Netflix, with the company surpassing 35 million streaming subscribers in the first quarter. On the company's conference call, Netflix Chief Content Officer Ted Sarandos noted Orange Is the New Black is Netflix's "most-watched show."

In addition to Netflix, other companies are increasingly getting into the original content business. Amazon (AMZN), which recently announced a major deal with HBO, is working on adding more original content to its Prime Instant Video service, with Alpha House, and several other programs. Hulu, co-owned by a consortium of entertainment companies, has Deadbeat, and several others.

Microsoft announced last week it sold 3.2 million Xbox consoles in its fiscal third quarter, including 2 million Xbox One units. The company also said Microsoft Surface revenue more than doubled year over year to $500 million.

Aside from the long-awaited Halo series, Xbox is also producing a live broadcast of the Bonnaroo music festival; Humans, a show about a family that buys a robot servant; Every Street United, a series about soccer stars Thierry Henry and Edgar Davids; and much more.

Projects that are in development include Deadlands, a show about the alternative history of the Weird West; Extraordinary Believers, a stop-motion show being produced in part by Seth Green (Robot Chicken); Fearless, an unscripted show about an Australian Navy bomb clearance diver; Gun Machine, based off the New York Times bestselling novel by Warren Ellis; Winterworld, a series based off the graphic novel of the same name by Chuck Dixon and artist Jorge Zaffino; and an untitled comedy show featuring JASH (a comedy collective founded by Sarah Silverman, Michael Cera, Tim and Eric and Reggie Watts).

--W ritten by Chris Ciaccia in New York

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