Gates keeps up push for entertainment dollars

Bill Gates is interviewed by talk show host Conan O'Brien at the 2005 International Consumer Electronics Show in Las Vegas. Picture / Reuters

LAS VEGAS/SEATTLE - The Xbox video game player and software for viewing movies on TV screens have brought Microsoft Corp. into customers' living rooms, Chairman Bill Gates said yesterday, and new partnerships will help the software maker expand beyond the PC.

MTV, US phone giant BellSouth and Fuji Photo Film are among the new partners Gates revealed at the Consumer Electronics Show conference in Las Vegas, where some 120,000 technophiles have come to discover what's in store for the gadget world this year.

The world's largest software maker is hoping to increase its share of a growing market for digital movies, pictures and music as it moves beyond its core business of selling the Windows operating system to run desktop computers. Gates said 12 years of Microsoft investments in connecting media and communications technologies to the PC had started to pay off.

"This is no doubt where the world is going," Gates told an interviewer in a staged event that kicked off the show. But he cautioned: "It requires a lot of investments."

Gates predicted a coming era of "maximum creativity - the same kind of creativity we have seen on the internet, (will now be) on the TV."

MEDIA PC USERS DOUBLE

Microsoft has used a modified version of Windows to attract an early audience for what its calls the Media Center PC, which hooks up to televisions and allows users to watch movies, listen to music and flip through digital photos using a remote control.

The number of Windows XP Media Center PCs has more than doubled in the past year to 1.5 million, Gates said.

"We are very excited about the progress," he said.

MTV, a unit of Viacom Inc., will offer music videos that run on Media Center and compatible portables.

Gates also said Microsoft had signed up a second major US telephone company, BellSouth Corp., to use Microsoft software as a way to deliver internet-based video programing to customers.

The company had previously signed up SBC Communications for similar services that could attract millions of users. Phone companies are looking to compete with rival cable television operators, as each looks to offer services the other has traditionally provided.

Microsoft also announced a partnership with Fuji Film that will allow users to order prints of their digital pictures from within the Windows operating system.

He showed off a Nikon DX2 camera for professional photographers that can automatically send photos to a local PC or printer without any human commands. Gates said all Nikon cameras would eventually have Microsoft technology built-in.

Building on a set of network-connected watches Microsoft introduced over the past year with Fossil, Swatch and Tissot, Gates said the company was working with two alarm clock makers to deliver weather information to customers' bedsides.

Microsoft has stepped up efforts over the last few years to get its software off desks and into consumers' living rooms and pockets.

XBOX ABSENT

To do that, Microsoft has grown more dependent on Hollywood and the rest of the entertainment industry to create demand for digital programing, as well as pay-as-you-go services such as music downloads, to drive software sales.

Conspicuously absent from Gates' agenda for the trade show were details of the next generation Xbox, which Microsoft hopes will give it an edge over its main rival and leader in the video game business, Sony Corp.

"Where I will be totally coy is any specifics about the next generation of Xbox," Gates said.

The year ahead is shaping up as a crucial one in the gaming industry as Sony is expected to introduce its highly anticipated PlayStation 3, putting pressure on Microsoft to respond.

Microsoft said Xbox sales were brisk during the just-ended US holiday season, making up two of every five consoles sold, but attention at the show was focused on the PSP, the portable version of Sony's PlayStation 2 console that will hit American store shelves within the next few months.

Gates said the next-generation of XBox would mark the "high-definition" era of gaming, with image quality akin to high-definition TV resolution, and more games that appeal to different age groups than the current largely young and male gaming fans.

- REUTERS