Bill Gates Declares 10 Million-Unit Head Start for Xbox 360 and Outlines Future of Interactive Entertainment

For Release 12:45 p.m. PDT

May 9, 2006





LOS ANGELES - May 9, 2006 - Microsoft Corp. Chairman and Chief Software Architect Bill Gates today staked the claim that the Xbox 360 system will have a 10 million-unit head start by the time the competition enters the market and more than 160 games by the end of the year. Gates went on to outline the company's bold new vision to connect millions of Xbox 360 gamers with hundreds of millions of Microsoft® Windows®-based PC and mobile gamers from around the world through the Xbox Live® online entertainment network. Gates made the announcements at a press conference to open the Electronic Entertainment Expo (E3), the largest annual confab for the interactive entertainment industry.

Dubbed "Live Anywhere," the initiative puts gamers at the center of a ubiquitous always-on world where their digital identities, games, friends and digital entertainment are always accessible through the familiar Xbox Live interface, regardless of location or device. The plan also clears the way for groundbreaking cross-platform gameplay scenarios, with participants using Windows-based PCs, mobile phones and Xbox 360 consoles to play together simultaneously.

Currently more than 3 million console gamers are connected to the Xbox Live community via their Xbox® and Xbox 360 consoles and Microsoft expects that number to double to 6 million by this time next year. In addition, more than 25 million casual gamers are currently playing games on MSN® Messenger and MSN Games. Envisioning a forward look to more closely align these powerful communities, Gates outlined next steps to bring the Live Anywhere vision to fruition:

• Xbox Live experiences come to Windows-based PCs. Gamers will have the ability to jack into the vibrant Xbox Live world from their Windows-based PCs early next year to play games with friends. Answering the call of millions of Windows gamers for a world that is always on, the Xbox Live experience on Windows will give gamers a consistent online game experience in which they have one identity, one friends list, one set of achievements and voice communications across all games on the network. These experiences will debut on Windows with the Windows Vista operating system and "Shadowrun" this winter.
• Microsoft's mobile offering. Spanning Windows Mobile®, Java and BREW-based handsets, the world-class mobile games service will give gamers on-the-go access to cross-platform gaming communities at any time, from any location. By this time next year, users will be able to send messages, access friends lists, download the best of mobile game content, and sample, purchase and play favorites such as "Bejeweled," "Zuma" and "Hexic®" as part of the integrated gaming world.

"By opening the Xbox Live entertainment network to the entire universe of Windows and mobile gamers, we're creating unparalleled gameplay opportunities that will drive incredible growth of the online community," said Gates. "Our vision is to deliver consistent, compelling experiences that make it easy for consumers to jump in and play, from any device at any time. It's a vision that only Microsoft can deliver."

Gates, making his first appearance at E3, joined Peter Moore, corporate vice president of the Interactive Entertainment Business in the Entertainment and Devices Division, on stage to announce a barrage of new game titles coming to the Xbox 360 and Windows Vista platforms.

Microsoft announced that it will have 160 Xbox 360 titles by end of 2006. The stunningly smooth high-definition graphics and sophisticated level of gameplay in these titles are proof positive that the development community is hitting its stride with the console's powerful hardware and programming tools.

Gates and Moore dazzled the crowd with an initial look at "Halo® 3," the hugely anticipated sequel to the highly successful and critically acclaimed "Halo" franchise. Enthusiasm for "Halo 3" has been building since its predecessor, "Halo 2" - launched by Microsoft Game Studios in 2004 - rewrote history books by becoming the biggest launch in U.S. entertainment retail history, with $125 million in sales and 2.4 million copies sold in the first 24 hours. In this third chapter of the "Halo" trilogy, Master Chief returns to finish the fight, bringing the epic conflict between the Covenant, the Flood and the entire human race to a dramatic, pulse-pounding climax.

Microsoft Game Studios also showcased exclusive Xbox 360 titles "Gears of War" (Epic Games Inc.), "Fable® 2" (Lionhead Studios) and "Forza Motorsport 2" (Turn 10). Ubisoft's next-generation version of "Tom Clancy's Splinter Cell Double Agent" will also debut on Xbox 360. In addition, Microsoft Game Studios showed "Alan Wake" (Remedy Entertainment Inc.) and "Shadowrun" (FASA Studio), both slated for Xbox 360 and Windows Vista. Bringing the Microsoft vision of Live Anywhere to life, "Shadowrun" is the first cross-platform Xbox 360 and Windows Vista-based game featuring team-based combat that ushers gamers into a new dimension with a revolutionary blend of modern weaponry and ancient magic.

For Windows gamers, the consumer launch of Windows Vista in January 2007 will continue the momentum and excitement for the Windows platform. With Windows Vista, Microsoft will introduce the DirectX® 10 API, showcasing astonishing new graphics as well as enhanced performance, better hardware integration and new ways for developers to make the most of the Windows game platform. Microsoft highlighted several games from major publishers that will support Windows Vista and DirectX 10 technologies: "Crysis" (Electronic Arts Inc.), "Age of Conan: Hyborian Adventures" (Funcom) and "Flight Simulator X" (Microsoft Game Studios).

In addition to these blockbuster titles on Xbox 360 and Windows Vista, several new games are coming to Xbox Live Arcade. Gamers of all ages and levels of experience are flocking to these quick, fun (and often nostalgic), downloadable titles that take advantage of the unique high-definition and Xbox Live capabilities that only Xbox 360 can deliver. Microsoft and its partners announced a significant expansion of the Xbox Live Arcade catalog, adding classic favorites such as "Pac-Man," "Galaga," "Dig Dug" and "Rally-X" from NAMCO BANDAI Games America Inc.; "Frogger," "Track & Field," and "Contra" and "Super Contra" from Konami; "Defender®," "Paperboy®," "Root Beer Tapper" and "Ultimate Mortal Kombat® 3" from Midway Games Inc.; "Sonic the Hedgehog High Speed" from SEGA®; and new titles such as "Lumines Live" from Q Entertainment Ltd.

As part of the Live Anywhere initiative, Microsoft has announced new cross-platform accessories such as the Xbox 360 Wireless Controller, Xbox 360 Wireless Racing Wheel and Xbox 360 Wireless Headset, which will enrich game experiences on Xbox 360 and Windows. The new Xbox Live Vision video camera will allow consumers to customize their gamer picture, send photo messages, and video chat with friends and family over Xbox Live.

The appetite for Xbox 360 gaming around the world continues to grow. Microsoft is excited to meet that demand in eight new countries in the coming year with launches in Brazil, Chile, the Czech Republic, Hungary, India, Poland, Slovakia and South Africa. Additional markets will continue the momentum of the largest next-generation installed base for any console after a second holiday season.

About Xbox and Xbox 360
Microsoft revolutionized the gaming industry with the November 2001 launch of Xbox (http://www.xbox.com), its first-generation video game and entertainment system, now sold in 26 countries. Microsoft introduced its next-generation system, Xbox 360, in the 2005 holiday season in Europe, Japan and North America, and launched the system in Australia, Colombia, Hong Kong, Korea, Mexico, New Zealand, Singapore and Taiwan in 2006. Xbox 360 (http://www.xbox.com/xbox360) is the most powerful video game and entertainment system, delivering the best games, the next generation of the premier Xbox Live online gaming network, and unique digital entertainment experiences that revolve around gamers.

About Xbox Live
Xbox Live is the first and only unified online entertainment network seamlessly integrated throughout the entire console experience, making it easy for people to find the friends, games and entertainment they want from the moment they power on their Xbox 360 system. Xbox Live connects more than 3 million members across 24 countries to enjoy hundreds of multiplayer games, downloadable games via Xbox Live Arcade, free and premium playable game demos, music videos, and movie trailers, as well as new game levels, characters and vehicles for all their favorite retail games. More information can be found online at http://www.xbox.com/en-us/live.

About Microsoft Casual Games
The Microsoft Casual Games group, home to MSN Games, Messenger Games, Microsoft Mobile Games, Windows Games and Xbox Live Arcade, is dedicated to providing the ultimate playing experience to every user. By offering a variety of casual single-player and multiplayer games, the Microsoft Casual Games group is able to provide a thrilling play experience across multiple platforms. As casual, online gaming reaches new heights of popularity, Microsoft Casual Games prides itself on its loyal community of active users and remains committed to offering innovative content and exciting around-the-game experiences.

About Microsoft Game Studios
Microsoft Game Studios is a leading worldwide publisher and developer of games for the Xbox and Xbox 360 video game systems, the Windows operating system and online platforms. Comprising a network of top developers, Microsoft Game Studios is committed to creating innovative and diverse games for Windows (http://www.microsoft.com/games), including such franchises as "Age of Empires®," "Flight Simulator" and "Zoo Tycoon®;" Xbox and Xbox 360 (http://www.xbox.com), including such games as the upcoming "Gears of War" and franchises such as "Halo," "Fable®," "Project Gotham Racing®" and "Forza Motorsport"; and MSN Games (http://www.games.msn.com), the official games channel for the MSN network and home to such hits as "Bejeweled" and "Hexic."

About Games for Windows
Microsoft Windows is the most popular operating system in the world for games, delivering the widest range of titles, the most gaming hardware choices, and advanced gaming technology for players of all types. With Windows as the cornerstone, the Games for Windows platform offers publishers and gamers the most enjoyable and innovative gaming experiences available on a PC. More information can be found online at http://www.gamesforwindows.com.

About Microsoft
Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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Microsoft, Xbox 360, Windows, Xbox Live, Xbox, MSN, Windows Vista, Shadowrun, Windows Mobile, Hexic, Halo, Forza Motorsport, DirectX, Age of Empires, Zoo Tycoon, Fable and Project Gotham Racing are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.
The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

For more information, press only:
Jason Mical, Edelman, (206) 268-2287, jason.mical@edelman.com

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