I had a talk with Microsoft regarding the Zune HD yesterday, after publishing my Zune HD Preview article. Here's what I learned.

Why now?

The real purpose of this week's Zune HD and Zune/Xbox Live integration announcement was to prime the gaming world for next week's E3 announcements. These announcements have nothing to do with the Zune HD, however. In fact, all Microsoft is going to talk about next week is Zune integration with Xbox Live. The Zune HD stuff was just thrown in because there's been a lot of speculation about the upcoming device which, as I noted previously, is slated for a September 5 release. (Microsoft did not officially confirm this date, however.)

"We wanted to clear the decks for E3," Microsoft group product marketing manager Brian Seitz told me. "Otherwise people would be confused why we were talking about Zune at E3. This just puts context around the strategy we're working towards."

What is Microsoft doing around Zune/Xbox Live integration

This first wave of Zune/Xbox Live integration is about video content only (i.e. not music). That is, a new "Zune" link will replace the Video Marketplace link in the Xbox New Experience (NXE) UI that you see on the console today. "We have been looking at ways to integrate with other businesses within Microsoft," Seitz said. "Xbox is a natural first step. When you look at the ways people use the console beyond video games, video is the most popular. And we can add value there. We're looking at ways to see how the content can flow more easily between the Zune and Xbox services than it does currently."

Microsoft told me that Microsoft would show off "new capabilities" of the Zune video service on Xbox Live next week. "This isn't just a new name," Seitz said. This change will also form the basis for future expansions of the Zune brand and service onto other Microsoft platforms. (Presumably including Windows Mobile.)

"Zune is growing," Seitz said. "It's a complete software + services layer. Zune is about music and videos. On the Xbox next week, we'll talk about Zune in the context of the Xbox Video Marketplace. We're making huge improvements to the navigation and the look and feel. We will also discuss other cool features and capabilities that the service will have."

Zune HD

Seitz confirmed to me that the Zune HD is a complete touch-based device, with no Zune Pad or other button-based navigation. "There are a total of three buttons on the thing," he said. "On the front, near the bottom, is a silver button that takes you back to the home menu. There's a rocker on the upper left that you can use for volume up and down and to trigger onscreen transport [Play, Pause, Next, etc.] controls. And there's a power button on the top. That's it."

While much has been made of the fact that Zune HD is "based on Windows CE," that's been true of every Zune device so far. "It's not a departure or change, hardware-wise," he said. "It's always been there, and this is consistent."

The Zune HD web browser is based on a "flavor" of Internet Explorer 6, Seitz said, "but you won't recognize that. We did heavy, heavy customization work on the UI, and it's optimized for multi-touch, gestures, and finger-based navigation instead of a stylus."

Looking ahead, Microsoft is still finalizing the software capabilities, so we can expect more about the Zune HD later this summer. "We haven't discussed all the capabilities of this device yet, and we're still in the middle of development work," Seitz told me. "There are changes to come, but we want to be respectful of customers and be accurate with what we're releasing. We'll have more to say later this summer."

Zune PC software and services

Seitz did confirm for me that the Zune HD would be accompanied by a new revision of the Zune PC software and services. "Absolutely," he agreed. "There's a parallel effort for the software and we have some really cool stuff coming there too."

Final thoughts

"We're really excited about the first broadening of the Zune services beyond what it is today," he said. "Most people have never even seen a Zune, and if they have, they tend to think of the first brown one. We think we offer unique customer value across the board, but MP3 players and music services are vertical markets. We're excited to bring to bring Zune to more platforms in the company and expand its reach. They can benefit from the work we've done around content and experiences. We will continue to work with Xbox and other teams in the company to see where we can land next."