Content Providers Validate Xbox Live as One of the Top Distributors of Online Entertainment Content

LAS VEGAS — Jan. 7, 2007 — The surprise entertainment hit of the holidays wasn’t in theaters; it was in the living room. With more than 1,000 hours of premium high- and standard-definition content available, Microsoft Corp. announced today at the 2007 International Consumer Electronics Show (CES) that Xbox Live® Video Marketplace became a clear leader in the distribution of online entertainment content. In just two months since the launch of the service, the Xbox Live community has been given access to top high- and standard-definition content, from top partners CBS Broadcasting Inc., MTV Networks Co., Paramount Pictures Corp., Turner Broadcasting System Inc., Ultimate Fighting Championship and Warner Bros. Home Entertainment. Xbox 360™ is again leading where it counts, as the only next-generation console offering downloadable high-definition TV shows and films in the U.S.

Content Partners Thrilled With Early Success of Service

“Xbox 360 has become one of COMEDY CENTRAL’s leading digital distribution platforms,” said Caleb Weinstein, senior vice president, strategy and business development, COMEDY CENTRAL. “In nearly two months, Xbox has become our second highest performing digital distributor. COMEDY CENTRAL is thrilled to continue this partnership and is working to bring more and more content to Video Marketplace in the coming year.”

“Bringing our content to the coveted gaming audience on the Xbox 360 has been a huge success and has exceeded our expectations,” said Andrew Mellett, vice president of video on demand for Warner Bros. “In fact, Xbox 360 has become one of the top distributors of our content direct to consumers’ TV sets over the Internet.”

Microsoft Announces Lionsgate as Newest Content Partner

On stage at CES, Microsoft also announced today a new partner for Xbox Live Video Marketplace. Lionsgate (NYSE:LGF) will be bringing a lineup of high-definition films to the service in the coming year. Films such as “An American Haunting,” “Blair Witch Project,” “Crank,” “The Descent,” “Employee of the Month,” “Hard Candy,” “Ninth Gate,” “The Punisher,” “Requiem for a Dream,” “Saw III,” “See No Evil” and “Stir of Echoes” will be available for download on Xbox Live Video Marketplace in high definition in 2007.

“This partnership is great for Lionsgate. The Xbox gamer is the same moviegoer who wants to watch ‘Saw III’ or ‘Crank,’” said Jon Ferro, executive vice president of Lionsgate. “That is why we are so thrilled to bring Lionsgate films to Xbox Live Video Marketplace. Bringing our content to this audience makes perfect sense and reflects our commitment to remain at the cutting edge of content distribution to new media platforms.”

Xbox Live: A Leading Online Provider of High-Definition Content

Xbox Live, the only online social network in the living room, is a thriving community of more than 5 million members who have the ability to download a wealth of high-definition games, television and movies. On Xbox Live, the largest online distributor of high-definition content by volume, the vast majority of subscribers choose the high-definition version of media when given a choice between a standard- or high-definition download on the network.

“Until recently, HDTV owners still had a limited variety of content at their fingertips. Now Xbox 360 is one of the premier sources for high-definition content in the living room,” said Jeff Bell, corporate vice president of global marketing for the Interactive Entertainment Business at Microsoft. “Xbox 360 is the one-stop-shop for the best in high-definition entertainment, whether consumers choose to access our industry-leading catalog of more than 160 high-definition games or to view high-definition television shows and feature films available through Xbox Live or using the Xbox 360 HD DVD Player.”

Xbox 360 Offers a Variety of High-Definition Entertainment Choices

With Xbox 360, Microsoft’s goal was to provide customers with a wealth of choices for enjoying high-definition content. For those who are ready to jump into the next generation of DVD, Microsoft also offers the Xbox 360 HD DVD Player. With a projected annualized attach rate of 28 movies per player, HD DVD has proven to be the consumer’s favorite next generation format, according to Nielsen data.

Adding to the growing number of ways consumers can experience their entertainment on Xbox 360, Microsoft also announced at CES plans for the winning combination of Microsoft® TV Internet Protocol Television (IPTV) Edition and Xbox 360, expected to deliver next-generation television experiences, including standard- and high-definition live television channels, video-on-demand and digital video recording — all on Xbox 360. IPTV on Xbox 360 is expected to be available to consumers by the 2007 holiday season and will be offered by select service providers that are deploying TV services based on the Microsoft IPTV Edition software platform.

About Xbox 360

Xbox 360 is a superior video game and entertainment system delivering the best games, unique entertainment features and a unified online gaming network that revolve around gamers. Xbox 360 has a catalog of more than 160 high-definition games and is available in 37 countries. More information can be found online at http://www.xbox.com/xbox360.

About Xbox Live

Xbox Live is the first and most comprehensive unified online entertainment network seamlessly integrated throughout the entire console experience, making it easy for people to find the friends, games and entertainment they want from the moment they power on their Xbox 360 system. Xbox Live connects millions of members across 25 countries to enjoy hundreds of multiplayer games, downloadable games via Xbox Live Arcade, free and premium playable game demos, music videos, TV shows and movies as well as new game levels, characters and vehicles for all their favorite retail games. More information can be found online at http://www.xbox.com/en-us/live.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass on Microsoft’s corporate information pages. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/presspass/contactpr.mspx.