Microsoft Reveals First Details of Next-Generation Xbox

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Company's Chief XNA Architect Shares Vision for HD Era of Gaming

SAN FRANCISCO - March 9, 2005 - Today at the annual Game Developers
Conference (GDC), Microsoft Corp. announced the first details of its
next-generation Xbox? video game system platform, highlighting how hardware,
software and services are being fused to power enhanced game and
entertainment experiences.

Microsoft Corporate Vice President and Chief XNAT Architect J Allard further
outlined the company's vision for the future of entertainment, citing the
emergence of an "HD Era" in video games that is fueled by consumer demand
for experiences that are always connected, always personalized and always in
high-definition.

"In the HD Era the platform is bigger than the processor," Allard said. "New
technology and emerging consumer forces will come together to enable the
rock stars of game development to shake up the old establishment and
redefine entertainment as we know it."

Building on 10 years of innovation with the DirectX? API, the Microsoft?
Windows? and Xbox platforms will enable ground-breaking game experiences in
the HD Era. Illustrating what that means for gamers, Allard shared the first
details about the next-generation Xbox guide. Persistent across all games
and media experiences, the guide is an entertainment gateway that instantly
connects players to their games, their friends and their digital media.

Features of the guide include these:

? Gamer Cards. Gamer Cards provide gamers with a quick look at key Xbox
LiveT information. They let players instantly connect with people who have
similar skills, interests and lifestyles.

? Marketplace. Browseable by game, by genre, and in a number of other ways,
the Marketplace will provide a one-stop shop for consumers to acquire
episodic content, new game levels, maps, weapons, vehicles, skins and new
community-created content.

? Micro-transactions. Breaking down barriers of small-ticket online
commerce, micro-transactions will allow developers and the gaming community
to charge as little as they like for content they create and publish on
Marketplace. Imagine players slapping down $.99 to buy a one-of-a-kind,
fully tricked-out racing car to be the envy of their buddies.

? Custom playlists. This feature eliminates the need for developers to
support custom music in games. The guide instantly connects players to their
music so they can listen to their own tracks while playing all their
favorite next-generation Xbox games.

Typifying the HD Era game experience, the guide requires hardware designed
with software in mind. System-level features of the guide such as custom
playlists, the Xbox Live Friends list and voice chat are enabled at the chip
level, liberating developers to focus on creating games, not developing for
technical certification requirements (TCRs).

To support consumer demands for the HD Era, the next-generation Xbox is
designed around key principles that let developers maximize real
performance, using concepts they are already familiar with.

The next-generation Xbox hardware design principles include the following:

? A well-balanced system that will deliver more than a teraflop of targeted
computing performance

? A multicore processor architecture co-developed with IBM Corp. that
provides developer "headroom" and flexibility for the HD Era

? A custom-designed graphics processor co-developed with ATI Technologies
Inc. designed for HD Era games and entertainment applications

In addition, familiar software technologies such as DirectX, PIX, XACT and
the recently announced XNA Studio - an integrated team-based development
environment tailored for game production - complement the new hardware to
help game developers unlock increasingly powerful and complex silicon.

The HD Era gaming platform will strike an elegant balance of hardware,
software and services to power the new experiences consumers demand. Games
and entertainment features such as the next-generation Xbox guide represent
a shift toward more immersive and integrated consumer experiences. This
shift will be further illustrated by a significant leap to high-definition
graphics, where character movements and expressions are intensely vibrant
and nearly indiscernible from real life; by multichannel, positional audio
fidelity so clear and precise that players will be able to hear the faintest
enemy footsteps sneaking up behind them; by richer online communications;
and by an abundance of on-demand content for game consoles.