It makes sense. It's an extension of the momentum Microsoft has already built up surrounding getting premium content onto its gaming console -- from hooking in Netflix streaming to integrating the Zune Marketplace with the Xbox 360 for entertainment downloads.
In fact, the Xbox 360 is quickly blossoming into an all-around entertainment hub with recent social networking and Last.fm music integrations to boot. A deal with ESPN could bring live sporting events and new interactive sports games to the console for a per-subscriber fee, although sources say a final deal hasn't yet been reached.
With almost 60% of U.S. homes now owning at least one game console, it makes sense for Microsoft (along with Sony and Nintendo) to be delivering on the multiple ways an Internet-connected box in the living room can be useful to consumers beyond simply gaming. As the race to bring Internet-streamed content into the living room continues to heat up, we'll see a number of new partnerships and business models surrounding content on various platforms both hardware and software.