Microsoft Corp. plans an expansive Xbox music service joining Spotify-style streaming with download and online-storage functions similar to Apple Inc.’s iTunes, several people with knowledge of the situation said.

The software maker is in talks with major record companies for the needed rights and plans to begin service later this year, said the people, who asked not to be identified.

By combining the best features of competing services, Microsoft seeks to build a digital product that lets customers play music any way they like. The maker of the Xbox console is building the new music business after its unsuccessful effort with the Zune service, which will close and move customers to Xbox Music, the company said on its website.

Microsoft is negotiating with Universal Music Group, Warner Music Group, Sony Corp.’s music division, and London-based EMI, the people said.

All four music companies declined to comment, as did Microsoft.

By combining the best features of competing services, Microsoft seeks to build a digital product that lets customers play music any way they like.

Xbox Music seeks to offer streaming for a monthly or annual fee, similar to Spotify Ltd.’s subscription service.

Consumers would be able to buy digital music through an online store, such as Zune, Apple’s iTunes and Amazon.com Inc., the people said.

The company is also seeking to offer Xbox Music users an online locker accessible by multiple mobile devices running Windows 8, the people said.

Users could put entire collections online, including music purchased elsewhere, for a monthly or annual fee.

The talks for the Xbox service are still early and Microsoft may not be able to obtain all of the rights it is seeking, the people said.

Even if successful, Microsoft may choose to roll out features over time, they said.

The Xbox music service was announced June 4 at the E3 video-game conference in Los Angeles, without details about how it will work or when it will be available.