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Microsoft sells Mediaroom unit to Ericsson in bid to focus on Xbox

Microsoft is selling its Mediaroom IPTV division to Ericsson as it shifts its focus to its Xbox console, the company has announced, confirming rumours that first surfaced earlier this year.

Mediaroom produces software that allows telecom firms to distribute television over the Internet, and is said to be used to run 22 million set-top boxes around the world.

Writing on the company’s official blog, Yusuf Mehdi, a VP of Microsoft’s interactive entertainment business, described the deal as “mutually beneficial and strategically aligned for both parties.”

“With the sale of Mediaroom, Microsoft is dedicating all TV resources to Xbox in a continued mission to make it the premium entertainment service that delivers all the games and entertainment consumers want – whether on a console, phone, PC or tablet. And with 76 million Xbox 360 consoles around the world with 46 million Xbox LIVE members, it is a mission that gets us out of bed in the morning,” Mehdi added.

Financial terms of the deal were not disclosed, but the acquisition is expected to close during the second half of this year. When it goes through, the takeover will leave Ericsson with a quarter of the global IPTV market share, the company said.

“Ericsson’s vision of the Networked Society foresees 50 billion devices to be connected via broadband, mobility and cloud. Future video distribution will have a similar impact on consumer behavior and consumption as mobile voice has had,” said Ericsson head of business unit support solutions Per Borgklint.