HD-DVD, Street Fighter II coming to 360

LAS VEGAS--The Consumer Electronics Show kicked off tonight with a keynote address from Microsoft founder, chairman, and chief software architect Bill Gates. And while just about anything the richest man in the world says makes the news--he was one of Time's 2005 Persons of the Year, after all--what he had to say tonight was of particular interest to gamers.

Besides offering brief comments about how Microsoft's next-generation operating system, Windows Vista, would interact with gaming--including a short demo of the next PC Flight Simulator, Gates also revealed that the Xbox 360 would be compatible with a next-generation disc format. As expected, the format in question is HD-DVD, the Toshiba-backed rival to Blu-ray Disc, which is supported by Microsoft's archrival in the next-gen console race, the Sony PlayStation 3. (Ironically, Toshiba partnered with Sony to produce the PS3's Cell CPU.)

Also, as one might guess given the fact the 360 has an internal standard DVD drive, the console's HD-DVD drive will be offered as an external peripheral. Microsoft's vice president of worldwide Xbox marketing, Peter Moore, who took the stage after a not-so-impromptu 360 Fight Night Round 3 bout between Gates and Microsoft CEO Steve Ballmer (who in keeping with his fiery reputation, threw down his controller in a moment of defeatist rage after being KO'd by Gates in the match), said that the drive would arrive later this year. However, he did not show a final form factor for the drive or name a price point, although stand-alone HD-DVD players are expected to cost in excess of $300.

Moore also took the opportunity to underline Microsoft's bullish predictions for the 360. First, he touted the high attach rates for the console--an average of four games and three accessories per console. Moore said that was "twice the previous record" without naming a specific platform--or the fact most consoles were sold in preorder bundles with games included.

Moore also said that by the end of June, there will be 50 Xbox 360 games on the market--up from the 19 currently available--in 30 countries. By June 2006, the company expects to have shipped 4.5 million to 5.5 million 360s worldwide. Previously, Microsoft predicted that it would sell 2.5 to 3 million 360s in the console's first 90 days on the market. However, that figure has come into question after widespread reports of 360 shortages in Europe and North America--though the console remains in abundant supply in Japan.

While Xbox 360s are currently hard to find for most gamers, Moore said that may soon change. He told the CES audience that Microsoft has enlisted a new manufacturing partner, the multinational Celestica, to help churn out more of the hotly sought-after consoles. Although Moore spun the Celestica announcement as something new, the fact that Celestica facilities were to manufacture the company's new console were widely reported last month in both Western and Asian media outlets. Moore did not specify whether Celestica factories were yet producing the consoles, saying only that Celestica "will join" existing Xbox 360 manufacturers.

Microsoft's CES presentation also had revelations for current Xbox 360 owners. In an almost offhand remark, Gates said that one of Capcom's most popular old-school arcade titles, Street Fighter II, will be available via Xbox Live Marketplace later in the year. If poker is your game, you'll be happy to know that a new Texas-hold-'em-game, it was revealed, will be available this year as well. Moore also mentioned that since the 360 went on sale on November 22, 2005, there have been more than four million individual downloads from the service. With the fanfare of factoids behind him, Moore weighed in with a flourish, saying such statistics demonstrated that the Xbox family of consoles was now a "proven form of mainstream entertainment."

GameSpot will have more news from CES 2006 as the expo progresses.