Microsoft is in talks to sell its MediaRoom IPTV middleware business to Ericsson (News - Alert), in order to focus on making its Xbox 360 the center of the video universe in the home.

Bloomberg broke the news that the Swedish behemoth is interested in buying the business, which brings in $350 million in annual sales and could be valued at $1 billion or more, the news service noted.

MediaRoom has become the de facto behind the scenes platform for delivering IPTV, in use at AT&T, DT, Telus, Telefonica and others globally. It enabled IPTV itself, program guide integration and apps development, but also underpins multiscreen integration strategies. As of the middle of last year, Microsoft’s Mediaroom platform was installed in 23 percent of deployed IPTV set-top boxes, according to ABI Research (News - Alert).

Nonetheless, analysts told Bloomberg that the platform may have peaked in terms of market expansion. IPTV overall is an opportunity that is expected to grow from 80 million last year to 117 million in 2017. However, that will be primarily driven by Asia-Pacific, where homegrown companies like Chinese vendor ZTE (News - Alert) have a lock on the market.

Nonetheless, if the report is accurate, Ericsson clearly believes there is room to grow Microsoft’s position. Adding the platform to its existing portfolio of pay-TV operator-focused video technologies would give Ericsson, the No. 1 telecom infrastructure vendor in the world, an end-to-end proposition for the IPTV market.

“There is a strong split in the IPTV middleware market between system integrators providing an entire solution and specialists in applications and customer experience,” said Sam Rosen, ABI Research practice director for TV and video, late last year.

“With the exception of Cisco, who recently purchased NDS (News - Alert), the system integrator’s role in customer experience will likely decline over the next few years; instead, this role will be left to client-centric middleware companies with better user experience,” added Rosen.

Now, Ericsson would be taking a page from Cisco (News - Alert)-NDS, bringing its considerable head-end and systems integration business to bear to continue to drum up business for MediaRoom. Earlier this year, Ericsson said that it had more than 240 IPTV contracts in place globally.