Microsoft has finally killed off its Zune brand for music, unveiling instead a new streaming service called Xbox Music at the E3 conference in LA. The company is promising a library of more than 30m tracks, with the service initially available on Xbox consoles, Windows 8 computers and Windows Phone smartphones.

Judging by the demo shown at E3, Xbox Music is well-designed and works well across the three screens. While the initial focus on Windows devices is understandable from a corporate strategy standpoint, Microsoft will need to move quickly beyond that in mobile to include support for iOS and Android devices, though.

The theory behind Xbox Music – as for Sony’s Music Unlimited and Samsung’s Music Hub – is that selling tens of millions of devices is the ideal platform to get a new digital music service into the living rooms of consumers. Yet the only company to really nail this hardware/service model so far is Apple.

The wider context here, of course, is the upcoming battle for the living room between Microsoft and Sony with their games consoles, and Apple with its Apple TV platform. A battle that ranges far beyond music.

Here’s a video of Xbox Music in action:

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