In 2010, Microsoft finally delivered the Xbox 360 hardware we'd been waiting for in the form of the Xbox 360 S, a sleek new version of the console that is quiet, reliable, and perfectly suitable for use in any living room. It is, in other words, nothing at all like the original generation Xbox 360 hardware.

Sounds perfect, right?

If only. While Microsoft finally fixed the problems with the 360's hardware after five long years on the market, the console's software-based capabilities are still a mess. Yes, the software giant has added a slew of new features over the years, and yes it's completely overhauled the UI, adding Kinect support along the way. But Microsoft's current generation console has got a slew of problems that keep it from achieving greatness. Fortunately, they're all software-based, and thus could be easily fixed.

Here's how I think Microsoft should fix the Xbox 360 in 2011.

(Seamless) Multi-console support for Xbox LIVE accounts

Now that Xbox 360s can be used with comfort in the living room, more and more customers are going to have two or more of the consoles in their homes. (Regardless of this, I'm sure many people would also like to be able to easily sign-in to their account on a friend's console as well.) And it would be nice to be able to move seamlessly between two (or more) consoles, logging on to each with your unique Xbox gamertag, and gaining access to all of your map packs, downloadable games, settings, and other features. Astonishingly, you can't do this, because Microsoft locks your account to just a single console. So if you want to move from machine to machine, it's a laborious, time-consuming process.

Now, there are probably reasons Microsoft doesn't allow this, tied to anti-piracy perhaps, or a desire to prevent gamers from abusing their accounts by sharing them with others. But come on, I can access my Netflix account from many devices. And the implementation isn't all that important--one way to achieve this without giving up much is to make it a feature of the paid Xbox LIVE Gold subscription--as long as it happens.

Update: A number of readers have pointed out that Microsoft does, sort of, support this functionality. That is, if you don't mind using a USB memory key to store your gamertag and associated profile, you can move between consoles fairly easily. This process isn't exactly what I was asking for--i.e. seamless movement between consoles simply by logging in with your account--but it's a first step. In fact, it may be worth documenting for the curious. I'll look into doing so over the holiday break.

Fix the digital media mess

I'm going to separately review the Xbox 360 as a living room-based digital media set-top box, but without giving away the surprise, the console's current capabilities in this arena are a mess. While Microsoft has added Zune videos and music experiences--over two long years, mind you--these interfaces are only tied to the Zune Marketplace (and Zune Pass) online service, not to local playback. So you get beautiful interfaces for media you've paid for. But the device's streaming and local media playback interfaces are old-school and haven't changed almost at all since the device originally shipped. Worse, there's a third interface, Media Center Extender, which only works if you have a Media Center. This situation is confusing to users, provides different experiences for near identical tasks, and needs to be fixed.

Support NTFS

This one's a no-brainer. If you have a hard drive full of videos or other digital media files and wish to use it with your Xbox 360, it has to be formatted using the ancient FAT32 file format that Microsoft doesn't even natively support in Windows anymore. (By which I mean, you can't format a hard drive with FAT32 anymore; you can however read and write to such disks.)

Of course, Microsoft has a more modern file system called NTFS, and this file system is used in today's Windows versions, and is supported by virtually every other set-top box that can connect to external hard drives. It is not, however, supported on the Xbox 360. And that's just crazy.

Where are all the applications?

Despite an architecture that's over five years old, the Xbox 360 is as powerful as, or even more powerful than, most of today's mainstream PCs, with a three-core, 3.2 GHz IBM Xenon microprocessor, 512 MB of RAM, hardware-accelerated graphics, surround sound audio, and, in most versions of the console, voluminous hard drive storage. With all that power, it should be possible for the Xbox 360 to run multiple, high-performance applications simultaneously, but that's not what happens in the real world. (The Xbox 360 does support background downloading capabilities.)

More important, perhaps, the Xbox 360's selection of applications is pretty weak, even compared to the low-end set-top boxes with which it competes. You should be able to fire up Pandora and, while the music keeps playing, play a photo slideshow, browse the web, or perform other tasks.

Fix the quality problems

When I first met with the Xbox team in early 2005, I was told about Microsoft's plans to allow game makers to update their games electronically, ensuring that games wouldn't be stuck in their original shipping condition but could be fixed and improved over time. I then asked if game makers would use this capability as a crutch, and ship poor quality games knowing that they could just fix them over time. And I was assured that Microsoft would never allow this to happen.

This, of course, is exactly what happened. And anyone who's purchased even a single Xbox 360 game knows that every single title is updated at least once, and many are updated fairly regularly. Worst of all, many games require an update on the day they are released, so the very first time you boot one up, you're prompted to update. That's right: They ship with issues, regularly.

This sort of slapdash approach to product quality is inexcusable. And Microsoft establish a set of tests, share them with partners, and expect game makers to ship high-quality titles in the box. The Xbox 360 is the premier gaming system, and game makers should treat it that way.

Clean it up

Speaking of quality, when I pay for a service like Xbox LIVE Gold, I expect a certain level of service. And one of the biggest problems with Xbox LIVE Gold--maybe the biggest problem--is that it's chock-full of racists, ignorant kids, intolerant nut jobs, and other idiots. You experience these morons in different ways, including inane in-game chatter, offensive gamertags that never should have gotten past the censors, and more. And while I understand that Microsoft can't completely solve every one of the problems with other users, they could certainly do more around the gamertag silliness and by providing feedback and resolution reporting when a user does complain about someone else. On the flipside, it should also punish those people who complain about gamers that haven't done anything wrong, preferably in the form of temporary bans.

Sound strict? Spend some time on the service, which, again, you pay for the privilege of using. I'd like to see an option for adults-only gaming (no, not that kind of adults-only), which would cut out a lot of the riff-raff, and should come with higher civility requirements and stricter punishments. It's obscene that Microsoft makes you pay for Xbox LIVE Gold at all. But if I have to pay, make it worth my while. Right now, it's a cesspool.