There is speculation that Microsoft is preparing to announce its for its Xbox 360 video game console on Monday at the Electronic Entertainment Expo, the annual video game conference and show at the Los Angeles Convention Center.

is reporting, based on anonymous sources, that Microsoft is in last-minute talks to secure the necessary agreements in time. The TV service is expected to be called Xbox LIVE Diamond and function as a "virtual cable operator." Microsoft could withhold an announcement if the ink hasn't dried in time.

Winrumors also is reporting that Microsoft may partner with cable companies to use the Xbox 360 to allow existing cable subscribers to watch shows and interact with their Xbox LIVE friends. The feature is , who can scope out football rows with their Xbox avatars sitting in the front row.

The streaming TV business already has a crowded field of players, including Internet powerhouse Google, whose first attempt at Google TV .

That means Microsoft may be taking a risk, though it could be successful if it turns the Xbox into a multimedia set-top box and maintains strong relationships with the cable companies.