With 40 million users on Xbox Live, Microsoft (MSFT) is reportedly preparing to create original video programming to be distributed on the Xbox 360, according to a report from The New York Times. The report states that Microsoft has hired ex-CBS TV executive Nancy Tellem to “oversee a Microsoft production studio based in Los Angeles that will create both traditional ‘linear’ programming and interactive programming that fuses video and gamelike content.” It’s not immediately clear what the latter would be like, but something along 1 vs. 100 comes to mind. It’s also possible “video and gamelike content” could be referring to the company’s upcoming SmartGlass initiative that will use tablets and smartphones as secondary screens alongside TV content. As it stands now, Xbox Live only delivers videos from standard content providers.