Project Natal due holiday 2010, Xbox Game Room to have 1,000 games

LAS VEGAS--For nearly a decade, one of the staples of the Consumer Electronics Show was the keynote address by then-Microsoft CEO and chairman Bill Gates. However, following his retirement in 2008, ringmaster duties at the software giant's press briefing have fallen to its new chief executive, the ever-energetic Steve Ballmer.

Last year, Ballmer made headlines for two high-profile gaffes--reportedly announcing that a new Xbox 360 would be released in 2010 (which Microsoft quickly denied) and then appearing to declare that the console would soon offer Blu-ray support (which company reps promptly said it would not).

However, at CES 2009, Ballmer was on script, showing off features of Windows 7 and preaching the Microsoft doctrine of software solutions. However, there was little game news. The biggest "headlines" came from Xbox division chief Robbie Bach, who dated the Halo Wars demo and showed off the kid-friendly Kodu game creator at the Venetian Casino's Palazzo Ballroom.

This year's presentation, held at the Hilton right next door to the Las Vegas Convention Center, CES's venue, could encompass a variety of cutting-edge subjects. First and foremost among them is Project Natal, the Xbox 360 motion-sensing system introduced at the Electronic Entertainment Expo last June. The camera-based, controller-free system had the E3 show floor abuzz and generated similar interest at the Tokyo Game Show three months later.

However, Microsoft remains cagey about Natal's release date, although it is all too eager to tout publisher support for the system. That roster includes such marquee names as Capcom, Ubisoft, Bethesda, Activision, and Electronic Arts--and possibly more, depending on the content of Microsoft's presentation this evening. Stay tuned.

[UPDATE]: Before Microsoft took to the stage, the company leaked out some of its CES address's biggest headlines. The company's Channel 9 antimarketing marketing division posted (and then pulled) a video interview with Entertainment and Devices division president Robbie Bach, in which the executive addressed a handful of news presumably intended to come out in the CES address.

First up, Bach confirmed Project Natal as one of the company's 2010 releases. While the motion-sensing camera peripheral had been largely assumed to be a 2010 launch for the company, Microsoft itself hadn't confirmed the date previously.

The other bit of news Bach discussed was the introduction of Xbox Game Room. In October, a Microsoft consumer survey floated the idea of an Avatar arcade where Xbox Live users would be able to play retro games from vintage consoles like the Atari 2600 and Intellivision. Bach touched on the Game Room in the leaked video, describing it as a place where gamers can play "30 or more" games along the lines of Centipede.

[6:29] In stark contrast to the Sony event, Microsoft's press event is being held in the cavernous Hilton Center, which seats thousands.

[6:30] However, organizers have jam-packed the seats together in narrow rows. It makes economy class airline seating look like the lap of luxury.

[6:31] Onscreen, animations of Microsoft's various products whiz by, including Xbox 360, Xbox Live, and XBL Avatars.

[6:31] Oh, and that whole MS Office thing too. Windows Media Center and Internet TV are also duly pimped.

[6:33] And down go the lights!

[6:34] And the slides continue. Project Gotham Racing in 3D on the Zune is given a high-profile slot.

[6:36] Uh-oh, the lights going out wasn't for dramatic effect. "Ladies and Gentlemen, please stay in your seats. We are having a slight power problem."

[6:37] Yep, all the central screens of the presentation are pitch black, likely indicating that the projectors' demands flipped a circuit breaker somewhere in the Hilton's bowels.

[6:38] The entire hall's lights go off, then come back on. The stage remains black before flashlights appear behind the screen, presumably being carried by panicked technicians.

[6:39] Looks like they found the problem--power is back, but they need another five minutes for tests.

[6:40] The big screen is being lit up section by section now revealing…more animated ads!

[6:42] More lights are tested in sequence. Welcome to the A/V club.

[6:44] So for those of you keeping score at home, that's one leak, one catastrophic power failure, two dozen frantic technicians, and several thousand fidgety audience members.

[6:44] More lights, more tests.

[6:46] Intensely powerful orange lights blast the crowd's retinas. Looks like something out of Steven Spielberg's War of the Worlds remake.

[6:46] No death ray, sadly.

[6:52] Overheard: "Well, this doesn't inspire confidence."

[6:53] The lights go down…intentionally this time.

[6:54] The music stops, and on comes the official CES sizzle reel. This convention covers all manner of electronics, apparently. Fancy that.

[6:55] Attendee count is just 110,000 this year, apparently.

[6:55] The Black Eyed Peas start BLASTING. Now we really need that death ray.

[6:57] Consumer Electronics Association president Gary Shapiro comes out to give some remarks. Death. Ray. Now.

[6:59] "Innovation, creativity...more innovation than any in 30 years," says Shapiro. More razzle-dazzle about how innovative products will overcome the economic downturn.

[6:59] Shapiro introduces Ballmer...and then continues to talk about innovation.

[7:00] Did you know? Steve Ballmer joined Microsoft in 1980 as its business manager. Wonder how his stock options did.

[7:00] Shapiro going over Microsoft's business units, which do not include death rays…yet.

[7:01] BAM! Bright lights herald the coming of the Ballmer. He materializes from the haze in a red sweater.

[7:01] Ballmer says the electronics industry kept its focus during the Great Recession.

[7:03] To show how technology makes lives better, a video of Saturday Night Live head writer Seth Meyers poking fun at technology. He singles out Xbox Live.

[7:04] "Before technology, I thought I was better at video games than an 11-year-old."

[7:04] Cut to Meyers in his living room, with a young voice screaming at him "You SUCK OLD MAN" over his headset.

[7:04] "Thanks, technology."

[7:05] After a few more wisecracks, the video ends, and Ballmer is back.

[7:05] "We want to focus on the ever-evolving PC tonight, and the TV experience."

[7:05] Cue obligatory mention of cloud computing.

[7:06] He then makes oblique mention to "new interface technology." Natal, perhaps.

[7:06] He promotes Microsoft's new search engine by yelling "Bing" about a dozen times.

[7:08] Says the global middle class, Microsoft's prime market, will increase dramatically over the next few years. (Glad the middle class is increasing somewhere…)

[7:08] Now he's recapping Microsoft's 2009 achievements, and Xbox is first out of the gate.

[7:09] Global Xbox 360 sales now over 39 million, with $20 billion in game revenue generated by Xbox products since 2001.

[7:10] And now we're back to Bing, and how it understands user intent and anticipates what they want. It's not a search engine; it's a "decision engine."

[7:11] Bing maps can go from satellite view to one's front door with smooth video transitions…if you've installed Silverlight.

[7:11] Microsoft teaming up with HP to make Bing the default engine and MSN the default home page on all HP PCs in 42 countries.

[7:12] Obligatory mention of Sync, Microsoft's partnership with Ford.

[7:13] KIA will have something similar, called UVO. Fiat models have similar functionality.

[7:13] Now it's Zune-pimpin' time, with rave reviews of the devices splashed on the screen.

[7:14] The Zune 1080p video service will soon expand to other platforms besides Zune and Xbox Live.

[7:14] Now it's on to the new HTC Windows Mobile phone.

[7:14] Now it's time for Ballmer's favorite topic, Windows 7.

[7:15] They wanted Windows to be much faster, both at startup and performing tasks.

[7:16] Some 3,000 Microsoft engineers, 50,000 partners, and 8 million beta testers helped Windows 7 be a success.

[7:17] Windows PC sales jumped 50 percent the week Windows 7 launched and 63 percent during Black Friday week.

[7:18] Ballmer declares Windows 7 as the fastest-selling operating system in history, with 94 percent of purchasers of the product being very satisfied.

[7:18] Some 300 million PCs were shipped in 2009, a 3 percent increase year over year.

[7:18] In 2010, industry research firm predicts 12 percent growth in PC sales.

[7:19] "The range of PCs with Windows 7 is virtually limitless," he says, with 4 million Windows applications overall--800,000 of which are for Windows 7.

[7:21] Ryan Asdourian from the Windows 7 team comes up onstage to demonstrate his favorite PCs.

[7:22] One of them is the Sony Vaio N, which has a Blu-ray player built in and a touch screen.

[7:23] Dell Adamo XPS is the thinnest laptop on the market, thinner than four poker chips. This is Vegas, after all.

[7:24] HP NV15 and Toshiba Cosmio 505 are among the gaming rigs they show off.

[7:25] He uses Dirt 2 to show off DirectX 11's graphical punch, emphasizing the realistic dirt when it wrecks.

[7:26] Now he shows off a 3D gaming laptop, and would have shown off an HDTV with a built-in PC--but the power outage blew the tube.

[7:28] Now they're showing off the Blio reader and how it helps students. They are showing an anatomy manual that administers quizzes and plays video inside an e-book's "page."

[7:31] Now he's sharing the book with Ballmer via Skydrive, which lets users share data. The result is a slick animated presentation.

[7:33] Asdourian shows off how to use Bing maps to scout out a bar near a Seattle Seahawks game.

[7:35] Now he's showing off Windows 7 DVR capabilities, recording four HD shows at once, surfing Facebook, looking up stuff to do in Vegas, and checking out an episode of It's Always Sunny in Philadelphia on Hulu.

[7:38] Shows off some photo-sharing abilities, which reveal that Adourian skydived into Qwest Field in Seattle in a Seahawks mascot suit.

[7:38] All these functions are part of Windows Media Center, which can be enhanced by Microsoft Media Room.

[7:40] This allows pay TV services like AT&T Uverse TV via Windows Media Center. Currently 4 million people worldwide enjoy the service.

[7:41] And soon many more will since it will soon be available on the Xbox 360 to Uverse subscribers.

[7:42] Through a Media-room-enabled PC, AT&T video service can also be streamed to Windows Mobile phones.

[7:43] In case you didn't get it yet, Ballmer plugs the PC once more.

[7:44] Now some Slate PCs are being shown running Windows 7.

[7:45] These table PCs will take entertainment on the go. As an example, he shows one running Kindle PC software showing…Twilight?

[7:46] Cue the next Meyers clip, a brief history of technology.

[7:48] And its video games. It shows him playing Frogger. "Now the graphics on my 360 are so realistic, when my guy dies, I tear up a little." After staring for a few seconds, he implores the crowd, "Don't judge me."

[7:49] And here come the games, with Entertainment and Devices division president Robbie Bach taking the stage!

[7:49] He isn't talking about games, though--he's talking about the entire spectrum of entertainment.

[7:49] The subject moves to the innovations on the Xbox platform over the past five years.

[7:51] "2010 will be a landmark year for all Xbox customers for three reasons."

[7:52] The best lineup of console-exclusives, including Mass Effect 2, Tom Clancy's Splinter Cell Conviction, and the first content packs for Call of Duty: Modern Warfare 2, which will be available on Xbox Live first.

[7:52] He also pimps Crackdown 2 and Fable III.

[7:53] And now a demo of Alan Wake, which Bach touts as a new genre.

[7:54] And hello Halo. Some 30 million units, 5 million Halo action figures sold, and 500,000 Halo soundtrack CDs sold.

[7:54] Cue Halo: Reach trailer…the same Halo: Reach trailer released last year.

[7:56] "Leave that lone wolf stuff behind, Spartan!" Bet he's a loose cannon who doesn't play by the rules.

[7:57] Bach reminds us that Halo: Reach is launching fall 2010, and Halo 3: ODST owners can get in on the multiplayer beta this spring.

[7:58] On to Xbox Live, which has 20 million members.

[7:58] 200 million avatar outfits sold, 100 million music songs for Rock Band or Guitar Hero sold.

[7:59] Obligatory Twitter, Facebook, and Last.fm reference--used by 10 million people to date.

[8:00] Instant-on streaming 1080p video from Zune Video Marketplace also gets a shout-out, and a quick demo of high-def streaming.

[8:00] Zune video available in 18 countries.

[8:01] "Atari, Intellivision--remember those?" Here comes the Game Room "surprise."

[8:01] Starting this spring, 30 original arcade classics will be available in customizable arcades.

[8:02] You can invite your friends to your game room arcade, which will have the original cabinets.

[8:02] Bach and Ballmer's avatars face off in an arcade.

[8:03] It will be available on both PC and 360, with new games each week--over 1,000 titles are in the pipe.

[8:04] Now Bach is talking about the Z axis being the final frontier of the natural user interface, or NUI.

[8:04] Bach talking about massive effort behind this technology, looking for inventions with a 10-year horizon and a three-year horizon.

[8:05] That latter group mentions muscle recognition, technology that Microsoft has patented.

[8:05] This has allowed them to remove the last barrier for gaming with…wait for it…

[8:05] PROJECT NATAL!

[8:06] Video montage shows researchers from University of Cambridge and other places intercut with the Natal E3 demo.

[8:07] Lots of shots of early Natal work, which shows cruder versions of the technology.

[8:07] "Natal evaluates trillions of body movements every second at 30 frames a second."

[8:08] Montage ends.

[8:09] It's official: Natal is shipping holiday 2010 worldwide.

[8:09] Bach makes a point of mentioning that the device will work with all existing Xbox 360s.

[8:10] And Bach is quickly wrapping up, recapping both his and Ballmer's comments.

[8:10] Looks like they are not bringing Natal out to show the unwashed masses…

[8:11] And that's it! Check back tomorrow for all the latest from CES 2010!