Update: As it turns out, Microsoft has no plans to launch an Xbox Music service this fall. The company clarified today that the features demonstrated tie in with the current Zune offering. Bing services will hit the console later this fall, allowing users to search for entertainment content via Kinect-driven voice recognition.

Microsoft plans on tapping into its expansive Xbox Live userbase with a new digital storefront dubbed ‘Xbox Music.’ According to a Business Insider report, Microsoft CEO Steve Ballmer dropped word at the company’s Partner Conference that the service will launch later this fall.

It’s based on the Zune Marketplace, with tweaks made to fit the strengths of the Xbox platform. More than a mere rebrand, it’ll feature 11 million-plus songs and the ability to browse via Kinect voice recognition.

This will likely replace the current Zune Music Marketplace offering for 360.

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