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Microsoft will launch a major upgrade for its Xbox 360 dashboard (pictured above) this fall. The upgrade will mean users can browse content faster and can navigate faster via speech commands delivered through the Kinect motion-sensing system.

The dashboard, or main user interface of the game console, got a slight makeover last year when Microsoft added Kinect voice commands to the system. But the last major upgrade was two years ago when Microsoft got rid of the console’s original “blades” user interface (pictured at bottom) and replaced it with what it called its New Xbox Experience (pictured right). The changes show that Microsoft is focusing on software changes to deliver new fresh experiences to users, even though its original console shipped in 2005.

Now it’s time to change it again, given the growing library of content. Albert Penello, director of platform marketing, said in an interview that the changes are aimed at making it easier to navigate through the growing amount of content on the Xbox 360, including games, videos, music and social networks.

“It’s about making the content easier to get to and more discoverable,” Penello said. “This is as big a change to the dashboard as NXE was and it sets a foundation for the future.”

I saw a demo, and it’s really fast to scroll sideways (rather than up and down) with a click of a control stick. The content on the page now uses larger tiles that are easier grab using the Kinect motion-sensing commands. Those tiles are reminiscent of the user interface for Microsoft’s Windows Phone 7 software for smartphones. But the imagery associated with the content, such as the cover art for a movie, is visible within a narrower strip that runs across the page. You can see more boxes to navigate to at a time now.

Above the content strip are categories such as Home, Videos and Games. You can speak commands to the Kinect system, such as “Xbox Home,” and it will take you to your destination quickly. (This particular Xbox 360 dashboard upgrade does not accelerate the speed of Kinect commands, which are still slower than button or stick pushes).

Penello said that Kinect has a significant improvement in voice recognition. As soon as he said that, however, the demo curse struck and Kinect failed to recognize a bunch of his speech commands. When the system recovered, it was pretty responsive to Penello’s commands.

One new feature is that you can now issue game invitations to your friends that don’t expire. In the past, you could extend an invite for a particular multiplayer game session. But now you can issue a Beacon, or an open invitation to your friends to play a game such as Call of Duty. That invitation stays around and your friends can take you up on it at any time.

Microsoft’s Bing search is now integrated with the content on Xbox Live. Before, you were limited to a category such as searching for movies when you did a search. Now you can search for Harry Potter and everything will show up. You still can’t search the wide open internet, though. But Bing will search for everything on the service and the hard drive.

The faster navigation is important because Xbox 360 owners now spend about 40 percent of their time on TV and video when using the Xbox 360. And now the entire dashboard is integrated with Kinect’s voice and hand gesture commands. You can now string a few words together when giving voice commands for faster navigation.

My guess is that Microsoft is readying the Xbox 360 for integration with the user interfaces of Windows 8 and Windows Phone 7. But there’s nothing to report about that so far. Overall, it’s a big improvement on the user interface.

Other additions such as YouTube aren’t yet ready to show off, but they are coming later this year. Beta testing starts in October.

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