In January, Microsoft announced plans for an Avatar-based chat service that would utilize the Kinect, allowing for users to interact with others across the world in a virtual space, via their imaginary creations. While this is a far cry from a real video service, it was a good step in the right direction until Microsoft could implement something a little more tangible.

Apparently, that day is today, with the announcement that Microsoft has agreed to purchase Skype — the Internet telephony and video communications company — for a staggering $8.5 billion.

The deal will not only connect Skype services with the Xbox Live and Kinect, but will also allow the already registered 170 million users to  “connect … with Lync, Outlook, Xbox Live and other communities,” according to the Microsoft press release.

If you’re concerned about your smartphones or iDevices — there’s nothing to be afraid of. Microsoft has plans to bring the service to its Windows phones, devices and “will continue to invest in and support Skype clients on non-Microsoft platforms.” As for Skype’s opinion on the matter, CEO Tony Bates had nothing but good things to say.

“Microsoft and Skype share the vision of bringing software innovation and products to our customers. Together, we will be able to accelerate Skype’s plans to extend our global community and introduce new ways for everyone to communicate and collaborate.”

So what does this exactly mean for Microsoft? Other than being able to gesture and wave your way through your Netflix menu, it will mean that the Kinect will have the possibility to become one giant video camera, perfect for the occasional conference, cross-country reunion, or literally anything you can think of.

It also means that Nintendo and Sony are summarily cut off from a potential growth platform. While Sony has implemented Skype on several of their Bravia and Vizio televisions (along with a PSP app), Sony would have to directly work with the competition, rather than contract Skype as they were originally. Nintendo – who has stayed out of the limelight so far — and Sony both now will have to find other third-party software or invent their own, and that’s a pretty hefty order to match Skype’s already overflowing user base.

In the world where numbers define everything, this is a big deal for Microsoft. Though is it going to have a critical impact sooner, rather than later? Sound off on what you think Microsoft will do with their newfound friend, and how the other companies will respond.

Source: Microsoft