In undeniable evidence of how digital entertainment is evolving, Microsoft spent a considerable amount of its E3 press event demonstrating the Xbox’s new music, TV, movie and social capabilities, even though E3 is the world’s largest game industry conference. The unmistakable message is that the Xbox is no longer just a game console.

The announcement of Xbox Music – which has been expected for many months – was one specific example, and came with a nice demonstration of how Kinect can add voice control to all kinds of entertainment delivered via the Xbox. The service will be available across Xbox 360, Windows Phone and all Windows 8-based computers and devices when it launches, and will have social media and sharing as part of its DNA. Pricing and other practical details were not available for Xbox Music, which may well be the final nail in Zune’s coffin.

Another of today’s announcements that has intriguing possiblilities is what Microsoft is calling Xbox SmartGlass, an application that “turns every TV into a smart TV,” according to Don Mattrick, president of the Interactive Entertainment Business at Microsoft. He demonstrated how a viewer could start watching a movie on a tablet, then send it to an Xbox-powered TV set with a single touch. What made it clever, however, was that the tablet automatically switched over to show second-screen information, links and social interactions that complemented what was now on the bigger screen.

Xbox is getting the browser Xbox owners have been demanding for ages, too, with the launch of Internet Explorer for Xbox this fall. It will be integrated with Kinect and Xbox SmartGlass, making it possible to browse using a mobile device while the results are on the TV. This gives viewers more choice for how they want to watch HD movie trailers and online programming.