Gates Reveals Microsoft Partnership with Sky, Xbox Latest and Windows Vista Demo at CES

January 5th, 2006-In his 10th annual keynote address at the 2006 International Consumer Electronics Show (CES) in Las Vegas, Gates gave the first broad demonstration of Windows Vista, an insight into future developments planned for the Xbox, and revealed new business arrangements with Sky.

It was announced that Gates and Murdoch are set to partner, with Sky content available to subscribers via Microsoft’s Media Centre software. This will allow Sky’s eight million subscribers access to video-on-demand, part of the new "Sky by broadband" service.

It’s clear that Microsoft intends to dominate in the home entertainment market, and Gates’ speech clarified the Windows Vista’s potential to deliver media from video to photo’s to music both in and out of the home.The importance of the penetration of Xbox into the home was highlighted as a part of Microsoft’s forward going strategy, with the product pulling consumers effectively towards both HD TV Sets and HD services provided by Microsoft.

And it’s a distinct possibility that the Xbox could be key to Microsoft’s future IPTV plans. Ed Graczyk, Director of Marketing and Communications for Microsoft TV was quoted in xchange.com on the 1st of January 2006 on the Xbox; "..it’s a fair bet at some point in the future you’ll have an Xbox console that could be also an IPTV receiver – that will have the IPTV functionality built into it."

Microsoft Alliances Announced

Gates highlighted a number of new alliances that use Microsoft software to provide broader and richer content to consumers;

Sky Microsoft and British Sky Broadcasting (Sky) plans to create a Windows Media Center version of Sky’s forthcoming broadband content service, Sky by broadband. The service will enable millions of Sky TV customers to access video content from their PC, including hundreds of movies and sports clips.

Starz Gates also showed Starz Entertainment Group’s new Vongo video download service, for people using Windows Mobile-based devices. Vongo subscribers will have unlimited access to more than 1,000 first-run movies and video selections as well as the streaming Starz TV channel.

DIRECTV Microsoft also announced a broad agreement with DIRECTV Inc., another NewsCorp holding. Microsoft and DIRECTV will work together to enable digital content to flow between Windows-based PCs, DIRECTV devices, PlaysForSureâ„¢-based portable media devices and Xbox 360.

Window’s Vista Unveiled

In the first broad demonstration of Windows Vista for consumers, Gates demonstrated Microsoft’s next-generation operating system, due out later this year.

Microsoft say Vista will "bring clarity to customers’ digital world and help them easily accomplish everyday tasks, instantly find what they want, enjoy the latest in entertainment, keep their personal information safe, and stay connected at home or on the go."

Potential usage enabled by Vista and demoed by Gates included a wraparound desktop at work that combined video conferencing, instant messaging, and a touchscreen panel in the kitchen showing customised TV reports, traffic updates and the location of family members.

Forthcoming Media Center PCs will include CableCARD support for high-definition programming without a set-top box. This will allow users to plug their digital cable signal directly into their PC to watch and record premium cable content, including high-definition programming, without a set-top box.

Gates also previewed services for Windows Live and Windows Vista designed to help people find and manage their entertainment on the Microsoft TV IPTV Edition-powered set-top box, or Windows-based Media Center PC, from almost anywhere in the world. TV gadgets on Live.com will enable people to find, manage and share personalised TV recommendations as well as remotely schedule recordings on their Media Center PCs.

Xbox 360 Pulls Consumers Towards HD TV Sets

Just a month after the global launch of the new Xbox 360 video game and entertainment system, Gates discussed the product’s strong momentum in delivering high-definition hardware, games and digital entertainment experiences. Xbox 360 is on track to be the fastest-selling video game console ever, forecast to ship between 4.5 million and 5.5 million units worldwide by the end of June 2006.

Gates noted that the product has also become a powerful application for high-definition television, adding that nine out of 10 owners currently own or intend to purchase a high-definition television set (according to a recent survey by Penn, Shoen and Berland Associates.) He announced that more than 50 new high-definition games will be available by June 2006.

There are also plans to deliver a new external HD DVD drive in 2006. The new drive will offer owners the ability to easily enjoy HD DVD movies.Using Xbox 360 and the Xbox Live® service today, consumers are already able to access high-definition entertainment such as Xbox Live Arcade titles, game demos and high-definition movie trailers. Consumers can also use their system to access high-definition television and movies from their Windows XP-based Media Center PC.

Gates’ keynote also showcased the momentum behind Xbox Live, announcing that more than half of all owners are already connected to the online games and entertainment service, which has a worldwide community of more than two million members.

Windows Mobile-Based Devices

Gates highlighted the Treo 700w, a new device that brings Palm Inc.’s celebrated ease of use to the Windows Mobile® platform. The Treo 700w, available exclusively on the Verizon Wireless network, combines a mobile phone with easy access to wireless e-mail and business applications.

The keynote also included a demonstration of how future technologies will transform the way people manage information in the office or on the go, communicate with co-workers in richer and more immersive ways, and be more productive wherever they are.Microsoft’s advancements in mobile entertainment were unveiled in the form of next-generation Windows Mobile-based Portable Media Centers from Toshiba Corp., Tatung Co. and LG Electronics.

The new devices will feature extensive battery life, support for new high-resolution and widescreen (16:9) displays, direct audio/video recording, gaming, FM tuners and direct connections to digital cameras.

In the area of software services, Gates previewed new Windows Liveâ„¢ offerings, designed to bring together relationships, information and interests that are important to people on PCs and a wide range of devices.

He unveiled two new telephones from Royal Philips Electronics and Uniden America Corp., designed to work with the voice communications capabilities in the upcoming Windows Live Messenger, the soon-to-be-released successor to MSN® Messenger, which has more than 200 million active accounts around the world.