What to do when a failed product concept still lingers, haunting every attempt at injecting it with new life? That's the problem with interactive TV, a term that grates like the name of an old girlfriend, conjuring up hopes long since unfulfilled yet still surprisingly fresh. Gratefully, it’s time to put old product notions of interactive TV behind us because this week Microsoft will release a user experience update to the Xbox 360 that will do for the TV what decades of promises and industry joint ventures have never managed to pull off.

Meet engaged TV. From now on, I will no longer need to plead with the audiences I address, the clients I meet, or my friends who still listen to me to imagine the future of TV. Because Microsoft has just built and delivered it: A single box that ties together all the content you want, made easily accessible through a universal, natural, voice-directed search. This is now the benchmark against which all other living-room initiatives should be compared, from cable or satellite set top boxes to Apple’s widely rumored TV to the 3.0 version of Google TV that Google will have to start programming as soon as they see this. With more than 57 million people worldwide already sitting on a box that’s about to be upgraded for free – and with what I estimate to be 15 million Kinect cameras in some of those homes – Microsoft has not only built the right experience, it has ensured that it will spread quickly and with devastating effect.

The new Xbox 360 user experience will start rolling out across the world this week. This free upgrade packs two punches: new content delivered through a new experience. Depending on what country you’re in and what TV service provider you use, your own results will vary, but in my home, served by Verizon FiOS, we will soon have the ability to use our Xbox 360 as another TV set top box, accessing dozens of linear TV channels from Verizon FiOS as well as a range of authenticated on-demand content. All of this is going into the same box that offers HBOGo, Netflix, Hulu+, ESPN, and other content channels beyond the games the Xbox 360 is already known for.

True, every set top box is adding similar content, and more TV service providers are working to deliver their on-demand content to connected TVs, game consoles, and tablets, followed in the coming year by more and more linear content. So the content alone isn’t really reason to proclaim the dawn of a new video product era.

That’s where the experience comes in. Microsoft is finally exploiting its Kinect sensor in all the right ways (dare I say, I told you so?). This 3D camera with face- and voice-recognition creates the perfect opportunity for Microsoft to radically alter the way you interact with TV content. Navigation of the entire Xbox experience is now voice directed, giving you the ability to simply ask for – and receive – what you want to watch or play.

This builds a new bridge between that content and the viewer. Every fancy interactive TV promise you’ve ever heard now has an easy platform through which it can be delivered – with no hardware upgrade required on anyone’s part, whether consumer or service provider. It’s all just a question of software at this point. And as one digital disruptor recently told me, “I can do anything in software for $30,000.”

This does to the TV product experience what Apple did to phones and then to computing generally with the iPad – it expands a product experience to create a platform on which industry-altering digital disruption can occur. But the Xbox 360 has the potential to do it even more swiftly, connecting a box people already have to content they already value and subscribe to. And it's that rapid adoption of such a simple yet powerful platform that will allow the TV experience to finally become and even surpass what we previously imagined interactive TV could achieve. 

To make this happen, Microsoft must ensure that its product strategy delivers three things: cross-platform utility, a robust developer community, and even more TV experiences. The cross-platform point is a sticky one. The new Xbox experience gives Windows Phone users cool options for two-screen interaction with the device. But the world is now dominated by Android phones, and Microsoft would be wise to take its services to the platforms that people already use. The developer community will follow, especially if they see that they can extend Android apps into the Xbox world. Ultimately, however, Microsoft must let developers put custom apps – not just games – right into the Xbox with as little friction as possible. If developers can have their way with the Xbox, they will work hard to finally bring to fruition all the TV experiences that we have watched flop over 30+ years of interactive TV trials. Yes, Virginia, you will finally be able to buy Jennifer Aniston’s sweater by clicking on it. But that will be the least interesting of the things that digitally disruptive developers will do to the TV screen once they have access to it, changing advertising, content co-creation, social engagement, and everything else we have long imagined TV could become. And doing it faster and cheaper than any industry initiative heretofore envisioned. That's digital disruption done right.

That’s why I say interactive TV can leave in peace, because if Microsoft does right by Xbox 360 users, it will take us far beyond interactive TV, engaging viewers in ways that will forever alter the future of home entertainment, communication, and commerce. That’s not just TV worth watching, it’s TV worth engaging.