A report from Reuters states negotiations between Microsoft and various content companies have gone south, resulting in the Seattle firm putting its plans for Xbox 360's Microsoft TV on hold.
According to the report, the firm had been in discussions with several media outlets for over a year, and had the service pegged for an initial roll out over the next few months. However, Microsoft decided the licensing costs for various services would be too expensive for its planned business model, ensuing it would not be able to compete with satellite and cable services at this point.
Microsoft TV would have given Xbox 360 users the option of using their console as a "cable box" of sorts, as it would have given users the option of paying a monthly fee for various programming packages which included live networks.
"They built Microsoft TV, they demoed it for us, they asked for rate cards but then said that was too expensive," a senior media executive involved in the talks told Reuters.
The executive said media outlets are hoping Microsoft will eventually return to the "negotiating table" with a different offer.
While bringing more high-profile channels to the console may be on hold at the moment, at CES this week, Microsoft announced Fox Broadcast, Fox News, IGN and The Wall Street Journal would each release apps through the Xbox Live dashboard in the US. Crackle, iHeartRadio, Warner Bros., UFC, and Verizon FiOS TV were included with the new dashboard update before the end of last year.