Sony's PS3 beats Microsoft to market delivering the combo of IPTV set top boxes and Gaming

Microsoft will have to take a back seat to Sony for now brining IPTV set top boxes to market.   Sony's PlayStation 3 gaming console will be positioned as an IPTV set top box. Delivery is set for next month via a Korean partner Mega TV offering a high definition service.

Mega TV, backed by TelCo giant KT,  plans to bundle the PS3 console as an IPTV set top box to increase the demand for the new IPTV service.  The bundle is reported to include a DVD drive for high definition Blu-ray formatted discs and a fast, high-quality graphic processor

As far as Microsoft's plans – earlier this year they had plans to release the Xbox 360 with IPTV functionality by the end of this year.   No site of it yet.  However, report state that Microsoft's entertainment executive, Robbie Bach, said they are in talks with TelCo giants AT&T, British Telecom, Deutsch Telecom, and Swiss Telecom.