Microsoft and Epic Records to Offer Ongoing Exclusive Entertainment Content on Xbox Live

REDMOND, Wash., and NEW YORK - 16th March, 2006 - Microsoft Corp. and music giant Epic Records today announced an agreement to make available a full year of exclusive artist content and high-definition music video downloads free for all Xbox 360^TM gamers. Over the next year, Xbox 360 and Epic Records will showcase 12 up-and-coming artists through the Artist of the Month (AOM) program via the Xbox Live^® service, the first and only unified global online entertainment network. Through the alliance, millions of Xbox Live members can enter a monthly sweepstakes with a prize of gaming against some of the hottest musicians through the Xbox Live Game with Fame^TM program.

Kicking off the AOM program on Xbox Live is British singer-songwriter Natasha Bedingfield, who recently captured her second top 10 hit in the U.S. with the smash single "Unwritten," the follow-up to last year's top 10 hit, "These Words." "Unwritten," which currently holds the No. 4 spot on the Top 40 Mainstream Airplay chart, is also exploding on iTunes, making Bedingfield the No. 3 artist overall and making the single the No. 1 most downloaded pop song.

Spotlighted as one of the biggest breakout females of 2006, Bedingfield has taken America by storm since the release of her album, "Unwritten," garnering critical acclaim and making appearances on major TV shows as "Good Morning America," "The Tonight Show with Jay Leno," "Last Call with Carson Daly" and the ABC prime-time hit, "Dancing with the Stars." Her music video "Unwritten" can be downloaded free on Xbox Live starting today, and a sweepstakes later this month will award a lucky winner an opportunity to play against Bedingfield during a Game with Fame session in April.

"Our goal has always been to make Xbox Live a cutting-edge entertainment experience," said Peter Moore, corporate vice president of the Interactive Entertainment Business at Microsoft. "This agreement with Epic Records offers our members exclusive artistic content directly from the source. With Artist of the Month we will be providing exactly what music-loving gamers want: brand-new, exclusive music videos that can be downloaded quickly, easily and free of charge."

"The fusion of music and video games now plays a significant role in breaking artists and enhancing the video game experience; the cross-cultivation of the two mediums helps new games and new artists thrive together," said Charlie Walk, president of Epic Records. "Through this alliance, Epic and Xbox show that we are in one business - exciting young adults and leading them to the art of discovery."

Each month Microsoft and Epic will announce the new Artist of the Month along with exclusive benefits for Xbox 360 gamers around the world. Xbox Live members will be able to download featured music videos from Xbox Live Marketplace at no additional charge and watch exclusive interviews downloaded directly to their Xbox 360 system. Further, monthly Game with Fame sessions will let Xbox Live members play games with some of the world's most renowned celebrities, as well as enter sweepstakes offering tons of cool prizes, from Xbox 360 consoles to signed CDs.

"This program really taps into the passion and excitement that surround both video gaming and music," said Cory Llewellyn, vice president of Epic Records Digital Marketing and Promotion. "We are excited to bring our strong artist roster together with Xbox Live for a variety of great experiences for consumers."

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 2 million members across nearly 30 countries to enjoy hundreds of multiplayer games, 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.

Epic Records, which was launched in 1953, is one of the premier music labels in the world, and is home to artists from virtually every musical genre, including such multi-platinum selling superstars as Shakira, Matisyahu, Franz Ferdinand, Fiona Apple, and Natasha Bedingfield, among many others. Epic Records in a wholly-owned subsidiary of Sony BMG Music Entertainment.

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

The information contained in this press release, other than historical information, consists of forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Although Epic believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors beyond Epic's control, including general economic conditions, consumer spending levels, competition from toy companies, motion picture studios and other licensing companies, the uncertainty of public response to the Epic's properties and other factors could cause actual results to differ materially from Epic's expectations.

Microsoft, Xbox 360, Xbox Live and Game with Fame 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, please contact:

Marie-Claire Suter

UK PR Manager - Xbox & Games For Windows

Tel: +44 (0) 118 909 4599

Email: i-maries@microsoft.com