Duo to offer games on demand

Microsoft kicked off the Consumer Electronics Show on Sunday night by announcing a major partnership with NBC to webcast the Olympic games on demand.

Tech giant’s MSN unit is teaming with the Peacock to run NBCOlympics.com for the 2008 Summer Games in Beijing. Virtually every event will be available both as a live stream and on demand. Companies will split revenue from online ads.

Microsoft chairman Bill Gates, assisted by top execs including entertainment and devices prexy Robbie Bach, also unveiled major partnerships with media players including MGM, CNN, ABC-Disney TV and Showtime as part of his annual CES opening keynote.

Speech kicked off a confab that’s expected to be more crowded with showbizzers than ever before. Though no Hollywood execs are giving major addresses, as Bob Iger and Leslie Moonves did last year, every studio has a major presence.

Sony, in particular, will not only be showing off its vast array of hardware but also putting on a separate event today featuring Sony Pictures TV, which has been driving digital distribution deals for the studio.

As adoption rates pick up rapidly, high definition is expected to be a major topic of discussion at the event. High-def DVDs have taken a different spin going into CES, however, as Warner Bros.’ decision to switch to Blu-ray caused the HD DVD consortium to cancel a press event planned for Sunday night.

The other major topic will likely be mobile technology. Driven in part by the success of Apple’s iPhone, tech companies are eager to up the capabilities of their devices, and content providers are eager to get music and video onto them.

In a direct challenge to the iPhone, Sony was expected to announce at its press event Sunday night that it is adding the Internet telephone service Skype to its PSP handheld gaming system. PSP already plays music and video, like the iPhone. With communications capabilities added, it will have most of the features of the Apple device, along with the ability to play games. One major drawback, however: It’s not compatible with the ultra-popular iTunes.

Gates’ speech was the biggest CES event on Sunday, however, and the Olympics partnership the biggest news Gates shared with the tens of thousands of attendees. Though the Peacock has provided video before on its NBCOlympics.com site, it has never come close to webcasting every event, as Microsoft is hoping to.

“By making the Olympics personalizable and delivering it on demand, we think we can have a sports event similar to Live Earth,” Bach said in a pre-show interview, referring to last summer’s concert that was streamed more than 9 million times on MSN.

Though the videogame biz doesn’t traditionally have a big presence at CES, both Microsoft and Sony were expected to use their Sunday night events to tout their respective consoles.

Microsoft announced that it has sold 17.7 million Xbox 360s worldwide as of the end of the year and bragged that it generated $3.5 billion in total consumer spending on hardware, games and accessories in North America, compared to about $2.5 billion for Nintendo’s Wii and $1.5 billion on Sony’s PlayStation 3.

Microsoft sold 7.3 million Xbox 360s in 2007, a slowdown from 2006 and significantly less that Nintendo’s Wii, which hasn’t released final figures but likely sold more than twice as many. Xbox 360 owners are spending substantially more on games and accessories than Wii owners, however, which makes the competition much tighter on overall revenue.

“The data is showing that we have a much richer environment, while the range of what the Wii offers is relatively narrow,” Bach said.

Sony, meanwhile, released only holiday sales figures, noting that from Thanksgiving through the end of the year, it sold 1.2 million PS3s, 1.4 million PSPs and 1.2 million PlayStation 2s in North America. For the PS3, the numbers are an improvement on previously sluggish sales but still well behind the competition.

Microsoft also announced that ABC-Disney TV is adding TV shows and MGM pics to the Xbox Live Video Marketplace, which lets gamers download movies and TV shows to a 360 console. They join Paramount, Warner Bros., CBS, Fox, New Line and Disney on the service, the only video download store with high- definition content. Sony is working on a similar video download service for PS3 that?s expected to launch later this year.

Bach also discussed Microsoft’s Internet TV software, recently renamed Media Room, which, after years of little progress, broke the 1 million subscriber mark globally as telcos start to roll it out worldwide. CNN and Showtime are both designing special interactive services intended to work with Media Room.

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