This is vintage Microsoft, claiming an excellent, existing idea as their own. Spectator mode is not new. Players of online shoot 'em ups like Doom and Unreal Tournament have been able to do that for decades.
But an observer mode that allows pans, cuts, and other devices common to filmed sports (and film in general for that matter), however, must be novel, right?
No less than the US Government has been working on this for some years. Replayable after-action reviews, complete with cueing, annotation, and varying camera angles, are already being developed for a number of military simulation games.
However the patent spaghetti sorts out, those behind this idea are undeniably onto something. The US may not have the spectator-gamer culture of Asia (yet), but making games viewable and accessible to people who want to watch instead of play -- or want to watch as a precursor to playing -- is an important and compelling expansion of the player pyramid:
There are lots more folks at the bottom of this pyramid, just as there are millions more people who watch professional football than attend live games or play.
The gamers at the top of the pyramid, the scary-dedicated ones, are really good at what they do, and watching them is fun. I'd much rather see two elite Battlefield 2 squads go at it then get my n00b azz mortared as soon as I log in.
And I'll never live to see the high-level content on World of Warcraft in person, but it'd sure be fun to watch some level 60 players romp through it. Those EQ and WoW raid videos are popular for a reason. Leeeeroy!