Microsoft Corporation (NASDAQ:MSFT) is gearing up to launch their next project: a music streaming service. XBox Music will reportedly let users stream music from a variety of devices including smartphones, computers, and XBox game consoles.

Their upcoming music service is reportedly to compete directly with the likes of Apple Inc. (NASDAQ:AAPL),, Inc. (NASDAQ:AMZN), and Spotify.  Like the latter, XBox Music will feature a free ad-supported version for PC owners, and a paid ad-free version for computers, game consoles, and smartphones.  The paid version will start at $9.99 a month. The service will also be available to Surface tablet owners with Windows 8, which is set to launch later this month.

XBox Music should help Microsoft edge in closer to becoming an all-in-one living room entertainment source. This new service should appeal to most XBox users, as a large percentage of them use the device for entertainment purposes rather than just gaming.

Jerry Johnson (the general manager for the new service) explained that they realize the importance of music in the entertainment sector.

The XBox 360 is one of the best-selling video game consoles on the market, but it’s so much more than that. The device lets users download popular games, movies, and tv shows directly on their device. Members who sign up for XBox Live also access many different apps, including Amazon Instant Video, HBO Go, ESPN, Netflix, Hulu Plus, YouTube, and more.

This new music service will replace Zune, their now defunct music service that couldn’t compete well with Apple’s iTunes. The service will also feature 30 million songs that are available for download, a feature that could prove to beat iTunes current catalog of 26 million songs.

I’d like to see XBox Music compete with Apple Inc. (NASDAQ:AAPL) and, Inc. (NASDAQ:AMZN). I think their new music service could increase game console sales and Surface tablet sales this upcoming holiday season.