Xbox One is Microsoft’s next-generation games console, but it’s about more than just games. It was unveiled last night, and should be on sale by the end of 2013. We think it has huge potential for children’s entertainment.

Microsoft is describing it as “the most advanced Xbox system ever designed for games, TV and entertainment”, stressing that while the console will be able to play bigger, better-looking games, it will also have a strong focus on TV. And, indeed, interactive TV.

Xbox One will also come with an improved version of Microsoft’s Kinect controller, which can track people’s gestures in the room, as well as understand voice commands. It’s this combination in particular that could spark a new wave of innovative software/shows aimed at kids.

Microsoft has form in this area already. Last year, we got very excited about Kinect Sesame Street TV, which was a joint project between Microsoft and Sesame Street. It got kids up and moving in the living room, interacting with their favourite characters.

Here’s a video we shot of Microsoft showing it off at a TV industry show last March:

If that was an early example of children’s TV and games coming together, we expect to see several more on Xbox One, which is designed around this kind of convergence (and for the grown-ups, there’ll be similar mash-ups of TV and interactivity too).

It’s an important and exciting development. Whereas consoles were once seen as something predominantly for young men, the last decade has seen them become much more mainstream. Xbox One and Sony’s also-upcoming PlayStation 4 are trying to move even further in that direction: entertainment set-top boxes for the whole family, not just one gamer.

Xbox One won’t stop thousands of children’s developers from focusing their attention on smartphones and tablets – it’s expensive to make an interactive TV show – but for bigger brands like Sesame Street it should spark more interesting ideas for making TV even more engaging, entertaining and, yes, educational for children.

Here’s the second video we shot of the Kinect Sesame Street show, as a further illustration of what’s possible with this kind of technology – and remember, we’re still in the early days.