Microsoft is expected to announce Sunday night that it has sold 10.4 million Xbox 360 units, actually making good on their promise to surpass 10 million by the end of 2006, according to San Jose Mercury News' Dean Takahashi. In addition, Robbie Bach and Bill Gates are to announce that Xbox 360 will be able to act as a set-top box for Internet Protocol Television (IPTV).

As the video marketplace is doing surprisingly well, surpassing other video-on-demand services, offering television as well sounds like a natural progression. However, we're not looking forward to leaving a heat-loving console on continuously, nor does a 20GB HDD sound ideal for any DVR features including in IPTV. Perhaps the announcement will coincide with a new Xbox 360 model and larger HDD?

Bach and Gates are expected to make the announcement at the Consumer Electronics Show Sunday night. Official NPD figures for console hardware sales should be revealed January 11.

[Update: The article has been taken down. It was dated for January 7; was it leaked a bit too early? Also, many are opining in the comments that the 10.4 million figure is "shipped" and not "sold." We'll know the wording chosen by Microsoft on Sunday and the official NPD numbers within the week. Update: The article is back up with only minor (i.e. typographical) revisions.]

This article was originally published on Joystiq.