Entertainment and digital media President Nancy Tellem, who worked for CBS before arriving to head Microsoft’s Los Angeles studios, said she is working on ways to make shows more interactive by tapping into technology like Kinect.

However, the goal wasn’t to use interactivity for interativity’s sake, she said, adding: “It has to be organic and a natural extension of what we are doing.” Examples could include live shows, or children’s programming where kids can interact with the characters on screen.

Tellem declined to specify how much Microsoft is spending on its original content play. “We are certainly looking at a very robust content production schedule,” she said, adding that her studio currently employs 125 people.

Microsoft has been stepping up its engagement in the entertainment space over the last few years, adding more than 110 100 content partners to its Xbox Live platform. Microsoft SVP for Interactive Entertainment Business Yusuf Mehdi said Monday the company now has a total of 46 million Xbox Live subscribers worldwide.

He declined to go into any details about Microsoft’s plans for the Xbox hardware, sidestepping questions about rumors that Microsoft is going to release a more lightweight, entertainment-focused living room device.

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