Microsoft’s CEO Steve Ballmer told a convention center full of financial analysts that Xbox TV will launch in time for this year’s holiday season. That would give families another reason to put an Xbox 360 on their gift list, and it moves Internet-connected television further into the mainstream.

This nugget of news comes less than a year after Ballmer mentioned the initiative at 2011 International CES, but more than two years after Xbox TV became available in Europe. He didn’t give any content specifics, but Ballmer did say it would be similar to what’s available via Xbox’s partnerships with Sky TV in the U.K., Canal Plus in France, and FoxTel in Australia. That would indicate several tiers of service starting with about 20 channels of live television, then adding premium packages and pay per view. Ballmer didn’t mention pricing, but as a guideline, in the U.K. Xbox TV costs £15 (about $24) to £40 (about $63) with premium sports extra. In Australia, the service starts at A$19.50 (just over $20).

Xbox Live already delivers content from online sources including Hulu, Netflix, Zune and Xbox Live Marketplace and more. Ballmer said he expects that the incorporation of Bing and Kinect will be a major differentiator from other services, since it means search and selection can be performed with voice and gestures.

“Having all of that content is right on, it’s fantastic, but it brings a new challenge with it,” Ballmer said. “Certainly we all know the frustrations of using guides and menus and controllers, and we think a better way to do all of this is simply to bring Bing and voice to Xbox. You say it, Xbox finds it.”

Unless it’s during a live demo, that is. When Microsoft’s Lisa Nelson said, “Xbox – Bing – The Office,” the service failed to find available episodes of NBC’s hit comedy.

It failed to do anything, in fact, leading Ballmer to joke, “It’s a good thing that’s shipping for Christmas.”

All of the social capabilities of Xbox Live will be available while watching Xbox TV as well, he said. “The vision is kind of simple,” Ballmer explained. “You should have any entertainment you want with all the people you care about, really simply and on any screen.”

Ballmer was speaking at the Microsoft’s financial analyst meeting in Anaheim, Calif.

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Photo shows Sky Sports presenter Georgie Thompson at the announcement of the Xbox and Sky partnership