Xbox 360s New Media Play Finding Fans

Consumers were impressed by the expanded multimedia features of Microsoft's upcoming Xbox 360 at the DigitalLife conference, while gamers were excited to begin using the devices to access other types of services.

NEW YORK—Microsoft Corp.s emerging strategy around establishing its Xbox 360 video game console as a central element of consumers home entertainment systems found favor with many observers at the DigitalLife conference here on Friday.

The software giant showed off the next-generation console to a packed room of media members, industry watchers and teenage gamers.

It also previewed everything from new gaming software that takes advantage of the devices more powerful video and audio processing capabilities to its expanded interfaces for integrating directly with handheld digital media players.

Peter Moore, vice president of worldwide marketing at Microsoft, played to a raucous audience that cheered when it saw future iterations of popular games such as Tomb Raider, Final Fantasy and Sonic the Hedgehog.

The crowd was nearly as impressed with Microsofts promise that the Xbox 360 will provide even more entertainment options.

In addition to playing video games, the Redmond, Wash.-based company is hoping that consumers will increasingly use the devices to download music, movies and other forms of digital content, making the console a more integral fixture in the living rooms of the future.

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At the center of Microsofts plan to expand the Xboxs presence is a more robust version of its Xbox Live online gaming service, through which it plans to offer downloads of music videos, movie trailers and other forms of digital entertainment.

A free version of the service, for which Microsoft currently charges $49.99 per year, will be offered with each Xbox 360 as part of the effort to encourage gamers to use their consoles to move beyond mere video games.

A for-pay "gold" version of Live will boast even more content, Moore said.

As long-predicted by Atari Founder Nolan Bushnell, Moore said that improved graphics and more detailed story lines for games wont be enough to successfully market large volumes of future consoles to consumers.

Like the venerated industry icon, the Microsoft executive believes that creating new ways for people to communicate and interact via the devices holds the most potential for expanding their footprint in the home.

"In the old days (gaming) was just a guy against the computer in his bedroom, now its about bringing a community of millions together," Moore said.

"Whether you use instant messenger or a cell phone, people are increasingly in touch with communities, and thats something that were driving toward with gaming as well, bringing huge communities together in a number of new ways."

A prime example of Microsofts converging entertainment plans, and some of the new synergies offered by Xbox 360 and the expanded Live service, can be found in the feature length movie being created based on the storyline of one of the companys most successful games, "Halo."

Microsoft-owned game maker Bungie recently signed a deal with Universal Studios to make the movie, which will be directed by Peter Jackson of "Lord of the Rings" fame, and the company plans to offer downloads of trailers and other related movie content via Live.

Creating new opportunities to market such blended content to its subscribers is one way the firm believes it can get people to expand their use of the consoles, Moore said.

Another consumer-friendly feature of the Xbox 360 can be found in its expanded parental controls, which can be set to block specific users from viewing adult-rated movies or content, or from playing video games bearing the "mature" designation, which is meant to keep the titles out of childrens hands.

However, perhaps the most impressive multimedia function Moore demonstrated with the Xbox 360 was its ability to instantly recognize and interact with mobile devices, including handhelds made by its closest rivals, such as Apple Computer Inc.s iPod and Sony Corp.s PSP.

Plugged into a USB port on the Xbox 360, users will be able to listen to music stored on their iPods or other MP3 players, or to view pictures stored on their PSPs (PlayStation Portables).

Consumers attending the preview were impressed with the new Xbox capabilities and said that such emerging console applications would encourage them to invest in next-generation systems.

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Dyran and Dyrell Smith, 17-year-old twin brothers from New Yorks Samuel Gompers High School, were split on what features of the Xbox 360 excited them most, but both found things to love about the new system.

"Its all about the games and graphics first, but adding all this other stuff is pretty cool," said Dyran. "The new media (applications) would definitely encourage me to buy it even sooner."

"Its definitely the other stuff, plugging in an MP3 player and hearing your music right on there, thats really cool and Id buy that," observed Dyrell.

For New York-based gamer Rasheen Jackson, 31, the added multimedia tools are exactly the type of innovation he said hes been looking for in a new gaming system.

"Thats the best aspect of this, that its going to bring a lot of the new media things you see on a computer into the console," Jackson said.

"I dont want to have to have a computer in my living room just to download movies or listen to music, and thats what theyre talking about," he said.

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