LOS ANGELES -- Microsoft's Xbox 360 video game console will be able to stream thousands of movies over the Internet, thanks to a deal with Netflix.

The arrangement Microsoft Corp. announced Monday at the E3 Media & Business Summit in Los Angeles will give Netflix's 8 million subscribers another way to stream movies on a TV instead of a computer. A Netflix-backed startup called Roku already sells a small streaming device that connects to TVs.

The Netflix streaming service -- which operates in addition to its DVD-by-mail program -- offers 10,000 movies and TV shows. Microsoft's Xbox had movies available before, but not nearly as many. This expansion is key in helping Microsoft compete with Sony Corp.'s PlayStation 3, because gaming consoles are becoming entertainment hubs with movies, videos and music.