CES 07: 360 hits 10.4 million, IPTV coming

Gates, Bach use keynote address to confirm new video-on-demand and DVR service for its console; "Halo-like" Gears of War sells 2.7 million.

The faithful wait for Gates to take the stage at CES.
The faithful wait for Gates to take the stage at CES.

LAS VEGAS--While the Xbox 360 is just over a year old, Microsoft has already added a number of capabilities to the system. Since the system's November 2005 launch, Microsoft has introduced the ability to purchase and download movies and TV shows, to output a signal in 1080p resolution, and to play HD-DVDs with the purchase of an external disc drive. Now the company is adding another feature to the system. It used its signature CES keynote address--featuring company founder Bill Gates--to announce the addition of IPTV functionality to the Xbox 360.

For gamers, the news of IPTV functionality was the big takeaway from Gates' keynote address, which overall was an unspectacular presentation helmed as much by Robbie Bach, head of the Entertainment divison at Microsoft, as Gates. There were no real surprises in the address, nor any stars to electrify the crowds. Last year, Conan O'Brien led Gates through a portion of his presentation, and another year Jay Leno provided some appropriate padding to Gates' dry stylings. Though it's not that gamers had coals in their CES stockings.

Slated to be available by the 2007 holiday season, IPTV on Xbox 360 will allow owners to use their game system as a digital video recorder, with some integrated features of both. For instance, users can play games online while recording TV programs in the background, or watch a TV program while chatting with someone from their friends list. Microsoft also touted picture-in-picture channel browsing, movies and videos on demand, and program searches by actor or director as features of the system.

Robbie Bach, head of the Entertainment divison at Microsoft, stated that the IPTV service will launch with five partners--including AT&T, British Telecom, Deutsch Telecom, and Swiss Telecom--and that 11 other telcos are "in trial or evaluation."

Yankee Group program manager Michael Goodman, a senior analyst at the research firm who oversees all digital entertainment coverage, said the announcement confirms the Xbox 360 as an "entertainment device," not just a game machine, and bridges the TV/PC divide, something Microsoft has long sought to do. "This is their nirvana," Goodman told GameSpot. "They've been trying to get into the living room for years, and what's their first success? Xbox."

Still, there's much work ahead to build demand fo IPTV. "I don't see consumers demanding an integrated solution." Goodman sees the need for evangelizing ahead. "Microsoft has lots of consumer education and marketing to do" to bring consumers up to speed on what IPTV can deliver. "It's not an experience consumers are used to."

As for how gamers will get their hands on these capabilities, the IPTV on Xbox 360 service "will be offered by providers that are deploying TV services based on the Microsoft TV IPTV Edition software platform."

As for the Xbox 360 as it currently exists, Bach dished out the latest sales figures on the system during the Gates keynote address. According to Bach, Microsoft sold a total of 10.4 million consoles through the most recent holiday season in 37 countries, with the majority of customers being new to the Xbox platform. On top of that, Microsoft now has an Xbox Live member base 5 million strong, with more than 100 million pieces of content downloaded for the Xbox 360.

As for games, Bach touted the Xbox 360's current library of 160 titles, saying that the number would double by the end of 2007. Gears of War earned a specific shout-out. Bach said it had reached sales of 2.7 million copies in seven weeks at retail, going so far as to call it "a Halo-like franchise" and an "evergreen property" that drives hardware sales.

While Bach didn't give concrete numbers on the Xbox 360's HD-DVD player add-on, he did say that demand for the expansion was "incredibly high" and that the player is consistently selling out.

[UPDATE] While Bach handled the duties at Microsoft's CES keynote address last night, interactive entertainment business corporate vice president Peter Moore sent out his own status report on the Xbox 360 today. In it, he reiterated many of the facts and figures of the keynote, and said that Microsoft is on track to have shipped 13-15 million Xbox 360 systems by the end of its fiscal year (June 30, 2007).

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