SlashGear

Microsoft have begun to push out the Xbox LIVE update for their Xbox 360 console, and along with the games on demand, new avatar customization and UI improvements comes confirmation that the company has signed an exclusive deal with Netflix for instant streaming to a console.  The partnership means that the Xbox 360 will be the only console on which Netflix streaming is possible, effectively cutting the PlayStation 3 and Wii out of the loop.

“This exclusive partnership offers you the ability to instantly stream movies and TV episodes from Netflix to the television via Xbox 360. Xbox 360 will be the only game console to offer this movie-watching experience, available to Xbox LIVE Gold members who are also Netflix unlimited plan subscribers, at no additional cost” Microsoft

As well as the usual TV and movie streaming from Netflix’s catalog, there’s a new “Party Watch” feature which allows multiple groups to gather together and watch the same content simultaneously on different 360’s and in different locations.  You’ll need to be a Netflix unlimited plan subscriber to have access through Xbox LIVE Gold, and use a separate computer to queue up titles as there’s no facility to do so through the 360 itself.

Xbox LIVE will be pushed out to users starting from today, offered as an upgrade when you restart your console.  Later on in 2009, Microsoft have promised to add access to the Zune Video Marketplace – for 1080p content – together with integration with Facebook, Last.FM and Twitter.  More on the update here.