Microsoft has sealed a deal to bring films by Universal studios to the Xbox 360. 360 owners will now be able to rent and enjoy films from the likes of: Shaun of the Dead, Scarface and others.

Thirty movie titles have been confirmed, mostly back catalogue favourites such as Scarface, The Mummy Returns and Shaun of the Dead. The selection will be regularly updated and Neil Thompson, Senior Regional Director of Microsoft's Entertainment & Devices Division in Europe, wouldn't rule out the possibility of featuring NBC Universal's TV content in the future.

The deal, which is specific to UK and Ireland, adds considerable value to the Xbox 360's burgeoning video-on-demand service. Currently around 300 movies are available to UK users, with Paramount, Warner Bros and MGM already supplying content.

Customers pay around £2.50 to download a movie, which remains on their console's hard drive for 14 days – but once you start playback, you have 24 hours to watch the film before it expires. Many of the titles are available to rent in either standard or high definition formats.

Microsoft sees the provision of a movie service as a key element in expanding its market beyond the traditional gamer demographic.

"We're looking at how we can grow Xbox as a core entertainment hub," said Thompson "There's a phenomenon at the minute where more and more people are staying at home to consume their entertainment – we're really offering a convenient one-stop shop for them."

At its press event in London on Thursday (26 feb), Microsoft also sought to portray the Xbox 360 as a platform for family games – not just shooters such as Halo and Gears of War, for which it is renowned. The company official revealed a new Wallace and Gromit game as well as extra downloadable content for its karaoke sim, Lips, including tracks from Coldplay.

There was also a demo of the console's forthcoming Primetime service, an online multiplayer quiz channel, which will allow users from all over the world to compete for real-life prizes. Thompson describes it as a "Saturday night family experience, more involving than just watching the TV." Primetime is set to launch with a version of TV show 1 vs 100 in the spring.

While Nintendo's Wii is currently winning the "next-generation" console war with global hardware sales of around 45m, Xbox 360 is performing well and growing in popularity.

On Wednesday, Microsoft revealed that over Christmas, European sales were up 120% compared to the same period in 2007. Worldwide sales figures stand at around 28m.

Slumpy monkey via guardian.co.uk »