An updated Xbox dashboard with Microsoft's Tellme speech recognition technology includes elements most recognizable from Windows Phone. Searches can now be made using speech.

Microsoft’s Tellme project is aiming to better integrate speech recognition in devices people use every day, starting with Xbox Kinect and Windows Phone.

“Speech is no longer a separate app,” said Ilya Bukshteyn, Tellme senior director for sales and marketing. “It’s part of the user interface.”

It’s part of Microsoft’s shift toward a natural user interface (NUI), where devices are better able to detect human movement and speech to execute tasks. Tellme is based in the cloud, so speech recognition evolves over time with the 11 billion speech interactions Tellme handles each year.

Bukshteyn said previous speech recognition software had issues, such as being able to only recognize certain specific commands. The popularity of smartphones allowing users to complete tasks with a swipe of a finger also changed how consumers use technology, he said.

But the future looks even brighter for speech recognition. A video of what Microsoft sees in the future is posted at the end of this post. Bukshteyn said speech recognition has made greater leaps in the past 18 months than in the past decade, and conversational speech recognition like in the video could be three years away.

Kinect Sports Season 2, due out later this year, will include football. Voice commands can be used to call audibles while playing football, or to change clubs in the golf game.

The biggest change in speech integration might be with the Xbox Kinect. Now users can use the Kinect to find virtually anything using voice commands.

Bukshteyn pointed out that most devices aimed to make televisions smarter haven’t been successful, partially because consumers don’t want a keyboard in their living room. He said usage of internet-enabled TVs has also been low.

Since being released last November, the Kinect now holds a record for being the fastest selling consumer electronic device in history. Eight million units were sold in the first 60 days on the market.

Here’s how it works: A user can say a command (such as “Xbox games”), and the games slide on the Xbox dashboard will appear. A command like "Xbox Bing Batman" will find any related content, whether it be games, music, movies on Netflix or TV shows from Hulu. Much like a search engine (Microsoft’s Bing is integrated into the software update), a results screen with cover art will allow the user to select what they’re looking for.

A look at the Bing search results screen when using speech recognition to find media.

But speech recognition can also be used in game. Bukshteyn demonstrated this while playing golf in Kinect Sports Season 2. Instead of making a gesture to change clubs, now a user just has to speak a command. Users can also call out audibles playing football, which is being introduced with Kinect Sports Season 2.

A new dashboard will also be introduced, so there won’t be a separate Kinect dashboard anymore.

The Windows Phone Mango release will also integrate speech recognition. Being able to speak a command, find a contact or even speak the text for an SMS message is nothing new, but Mango will can read the text back to the user then offer voice commands to either reply or ignore the message. Mango can also read (and users can speak) Facebook status updates, tweets or instant messages from Windows Live Messenger.

On Windows Phone, speech can also be used for searches in Bing or finding local restaurants and services with Microsoft's Yelp-like tool called Local Scout.

Mango, of course, has a ton of other highly anticipated updates. It’s slated to hit the U.S. market this fall. The Kinect improvements will also be out this fall as part of a free software update.

Click to go to Microsoft's Tellme website to view a video on the future of speech recognition.