The technology will allow consumers to use the console to watch television programmes delivered by their broadband provider.
Microsoft said that it has struck deals with some of the world's largest telecoms service providers to use Microsoft IPTV Edition.
The software giant claimed that commercial deployments are currently under way with AT& T, BT, Deutsche Telekom, T-Online in France and Swisscom, and that the first services will roll out as early as Christmas 2007.
Ed Graczyk, worldwide director of marketing and communications for Microsoft TV, will demonstrate the product during his keynote speech at The Connected Home show at London's Olympia.
"The demonstration will showcase what happens when next-generation television is combined with next-generation gaming in a unique new service delivered by your broadband provider," said a statement from Microsoft.
The Connected Home Show runs as part of the third annual IPTV World Forum from 5-7 March 2007.
"This will be a unique opportunity to witness first hand the possibilities which IPTV offers to service providers and to the online gaming market," said Ian Johnson, managing director of Junction Group, which organises the forum.
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