• by Gavin O'Malley  @mp_gavin, July 8, 2013

Ahead of what many are expecting to be a major reorganization at Microsoft, the software giant has announced plans to pull the plug on MSN TV by September 30.

“All good things must eventually come to an end,” Microsoft said in a statement on Monday. The company is expected to soon unveil a broad restructuring, which will devote far more of the company’s attention to products and services.

Fittingly named WebTV at the time, Microsoft acquired the Web TV service back in 1997 for about $425 million. Designed by Web entrepreneur Steve Perlman, the technology was then considered cutting-edge.

Rebranded in 2001, the service was integrated with Microsoft’s Windows CE operating system, and as such, thrived for a number of years. More recently, however, MSN TV has been overshadowed by Microsoft’s efforts to turn its Xbox unit into a powerful multimedia channel.

Analysts on Monday were not surprised by the news. “MSN TV is a remnant service from a bygone era,” said Clark Fredricksen, a researcher at eMarketer. “Computing, video viewing and Internet connectivity have fundamentally changed multiple times since its inception.”

The Xbox One, which is expected to debut this November, is being marketed as a voice- and gesture-responsive “all in one” platform for TV, movies, music and video games.

Seen as an arena that is ripe for growth, Microsoft’s Xbox-led Web TV strategy will be tested by Apple, Google and other powerful technology players. Apple, for one, is reportedly hoping to soon offer live TV streaming of channels from Time Warner Cable, the second-largest U.S. cable operator.

“It makes sense that Microsoft would want to consolidate resources and focus on products with strong market share like Xbox, especially considering that consoles continue to attract a greater share of time spent watching video today,” Fredricksen added.

By most measures, Web TV is on the verge of exploding in popularity. By 2021, there is a 49% chance that 50 million U.S. households will drop cable in favor of online TV services, according to a recent Borrell report, which cited a Delphi Panel of experienced management in the media industry.