ANDY LEES: Thanks very much, Brad.

You know, it really is fantastic to see Windows expanding across new PC form factors, and then going beyond the PC into the personal cloud.

One of the great things about the personal cloud is it creates a natural bridge to the phone.

Now, the phone market is going through a massive inflection point. In fact, what happens over the next five years is going to define the industry for the following 10.

There’s intense competition, but, in many respects, things are just beginning. There’s a huge opportunity ahead. In fact, over the next three years, the number of smartphones sold is going to more than double from 200 to 450 million smartphones sold every year.

So, the phone is a very special thing. It’s the first real 7/24 computer that’s connected to the cloud. In fact, for many people, the very last thing they do at night is they put their phone on the nightstand, and the very first thing they do in the morning is they pick it up and check it — check out what’s happening in their world.

But the problem is that today smartphones are just app launchers, they’re just a grid of icons. We figured there’s got to be a better way — there’s got to be a better way than just going app by app by app.

So, two years ago, we fundamentally reset our strategy, and I’m very excited here to show you how that’s coming to market with Windows Phone 7.

Windows Phone 7 is very focused on delighting the end user, but it’s a lot more than an operating system. It has the built-in software and services for key business and consumer scenarios. It also enables a rich world of applications and games across a choice of phone hardware.

And there’s three fundamental strategic principles that we have for designing the phone. The first one is smart design. Windows Phone 7 comes with a completely different user interface that’s focused on simplicity, intelligence and discoverability. You’ll see in a moment the demonstration where you’ll see the user interface is not cluttered, it’s very simple, there’s not lots of buttons on the UI. If you want to play something, you just tap the thing you want to see or listen to.

It’s intelligent. We reduced — significantly reduced — down the number of steps that you make. This isn’t just in the UI, it’s how the whole phone works, making it much easier for you to get things done and work the way in which you want to work. Even the way in which you start with the phone, the new front screen, the start screen has these tiles on it where the Internet is coming to you and keeping you up-to-date with these live tiles to find out what’s happening.

We even have the intelligence of Bing built into the phone. You can start asking questions about movies, restaurants. It gives you reviews, locations, maps in very, very few steps, making it much easier for you to get things done.

The second thing is this innovative concept called hubs. This is a new concept where applications, services and content are brought to you in a very engaging panoramic experience. It’s like having your phone be able to move across a display. It brings together core things.

For example, we have a hub for people, and, in the People hub, all of your contacts and information come into one place. It’s one place where you can get access to the social networking updates.

And, of course, it’s directly linked to the things that Brad just showed you, all coming together. We provide hubs for people, for music and video, for games, for photos, for a marketplace of applications and games and music, and even a hub for Office so that you can use your phone for business and consumer scenarios.

We also want to make sure that the ecosystem is optimized. One of the problems that the phone is going through right now is fragmentation. There’s lots and lots of different phones and different types of screens, and, as a result for ISVs and developers, it makes it very, very difficult.

So, we have a new way in which we are working with OEMs. We’re making sure that our software is fully optimized and have a whole new platform so that you can develop software and solutions with your customers that are also fully optimized.

The new platform is built upon Silverlight, .NET and XNA, so you already have the skills to be able to build solutions. And, of course, the tools are Visual Studio and Expression.

So, without further ado, do you want to take a look? (Applause.)

OK, so please welcome Augusto Valdez, who’s going to go through and take us through Windows Phone 7. Augusto. (Applause.)

AUGUSTO VALDEZ: Thanks, Andy.

All right, so we’re going to show you Windows Phone 7 now. Are you guys excited about it? Good.

So, this is my Windows phone. I’ve been working with it, I’ve used it before coming into the show. As you can see here, I’m a big Sounders’ fan, as my kids are as well. So, I customized my screen here with my kids’ picture of the Sounders, saying you can customize your lock screen anytime you want, any way you want.

But the important thing is that it shows the important things, things that are important to me, like, for example, what the time is, what the day, what the Tuesday date today, and then also the fact that I need to go to another meeting next after this one.

And it also points me to different things that happened to my phone since the last time that I actually used my phone, like how many e-mail messages I have received, how many text messages I have received and things like that.

So, I just slide it up and enter my PIN passcode. This is, of course, connected to Exchange, and it’s securing my phone. Now everybody knows what my PIN passcode is. Very secure now.

And here you can see my start screen. This is the new start screen that Andy was describing, which basically has all these live tiles that bring information that is the most important to me, like, for example, again how many voice messages I have, people that I have in my people hub. So, this is all people or pictures of people that are relevant for me, my text messages, my Outlook account. I have also my calendar tasks here that shows me what my next appointment, my Office hub.

And the way that I have arranged my phone, and I decided to do this this way because you can fully customize your start screen, is that I have all the things that are work related in the top, but if I swipe it down, I have all my personal stuff here as well. So, again work and personal in just one place. I can swipe it up, and I swipe it down, and I have my personal stuff, like my photos, my personal e-mail accounts, my Xbox Live, Windows Live, Xbox Live hub, where I can go and play games, see my avatar and my achievements, my music hub, marketplace, a picture of me, and then also another Exchange account that I have, just to give you a hint that we support more than just one Exchange account — more than one Exchange account in the phone.

Now, since I’ve been traveling, I want to know what’s going on with the people that I most spend time with, and, with the People hub, we can do that. When I go into the hub, I can see the different people that I have been most recently interacting with, with my phone. If I swipe to the side, this is the concept of a hub where you have everything that is people-related in just one place. I can see all the contacts, all the people that I have in my contact list coming from Facebook, from Exchange, from Windows Live, from different sources in just one place.

And I can also see what my own status update is that I posted a couple of days ago when I was coming down to Washington.

Now, I can also see the different feeds that I have from a Windows phone, like, for example, this is what’s new, which is basically coming from the feeds that I have from my people in Facebook, from my people in Windows Live. And I see this post that Brad just did about the Sounders, saying, “Go, Sounders,” because we’re very excited about the game that we’re going to have this Thursday against D.C. United here.

And I can also see there’s a picture that he just posted, so I can open it up, and it’s coming, this picture is coming directly from Windows Live, which is the one that I guess Brad just posted a few minutes ago. You see the team building, uploaded 20 minutes ago here in Windows Live.

And I remember taking this picture, but I didn’t remember that they were so good. So, it turned out very good. I don’t know what he did.

So, let’s say I’m going to say here, like, “It turned a good picture.” As you can see, I made a couple of mistakes here. Like instead of turned I said turns, and instead of good I say God. Windows Phone 7 is very smart. So, I can go back and then pick up a word, like, for example, God that I meant to be good, and I can correct it without actually going back and typing it again. So, it allows me to actually go back and do these corrections without me having to type the words again.

So, now I would like to click on Brad’s contact. It will take me to his contact here. And what I can see is his whole profile.

Now, the interesting thing is that, as I said before, this allows me to connect to both Facebook, Windows Live, Exchange contacts in just one place. This happens to be that I have Brad in my Outlook account, and I also have Brad in Windows Live. So, it’s merging those two contacts into just one, so it doesn’t show more than one contact in the phone, but it’s keeping the sources intact. So, it’s not going to modify that.

Now, since I’m going to be spending a good time with Brad this week during the game and stuff, I want to be sure that I have him on my home screen. So, I can click on this theme button here, and now I’m customizing my start screen again, having his picture right here on the phone. So, it’s really easy for me to now actually go ahead and see what’s going on with him. It even will pull up his status updates right here on my home screen, so I know what’s going on with Brad at any time. (Applause.) Good, that’s cool.

Now, what I’d like to do is just go to my e-mail. I want to check into my e-mail what’s going on while I’m here showing you a little bit of what Windows Phone can do.

This is a new look of the e-mail. It’s really clean, and it shows me exactly what is going on with my mail. It shows me the flags, attachments and everything that I might have on my phone.

And what I can do is I can start swiping to focus into the things that are important for me, like, for example, what e-mails are urgent, and it’s going to filter my inbox immediately by the urgent e-mails. I can filter by flags, and this e-mail has been flagged by me on Exchange on my Outlook account before on my PC, so I could follow up later on them. So, everything gets synchronized over the air with Exchange.

So, I have this e-mail from Katie that she was asking me to review this PowerPoint presentation that she sent me earlier, and I have this attachment for this PowerPoint. So, I click on it, and as you can see, we are opening up PowerPoint in the best way possible, which is in the landscape mode, so you can see PowerPoint, and you’ll see how the fidelity of the PowerPoint is maintained here on the phone. You’ll see the animations, how they work out. So, it works perfectly. And you see it’s not just the transitions, but also the animations inside the slides. (Applause.)

She really asked me not to just look at the data, but she wanted me to actually review if everything is fine. And I’m seeing here that she is saying that there is a 8.7 increase in profit since we opened our office in San Francisco, and I know that that’s not accurate, that it’s actually 9.7. So, what I can really do is I can just go to here, and I can quickly fix here the numbers from 8.7 to 9.7 and save it. So, I’m actually editing text in my PowerPoint slide right here, and I can send it back to Katie so she can have the latest version of her PowerPoint presentation. I can be very productive while I’m here at D.C. (Cheers, applause.)

Now, the other interesting thing is that we think that e-mail and calendar and everything that we have on the phone should act as one consolidated thing, one integrated experience. They shouldn’t behave as two different applications.

So, in our case, e-mail and calendar are just one thing. So, for example, I just received this e-mail from Andy asking me for a meeting here, and he’s asking me to come into a Worldwide Partner Conference debrief. Oh, man, this is happening on Thursday at 8:00. I think I have a conflict then.

But the e-mail knows my calendar. So, it’s telling me that I have a conflict. So, if I click on that conflict link, I don’t need to go to my calendar itself, it will take me to the calendar to the exact place where the conflict is, showing me the conflict in the exact hour where it’s happening. So, it’s easy for me to decide whether I can go to this meeting or not.

So, as you can see in my calendar, I have some red items and some blue items. The red items are coming from my Windows Live personal calendar — I’m sorry, the other way. The red items are coming from my Exchange calendar, and the blue items are coming from now my Windows Live personal calendar. So, I have my work and personal life in just one place.

Now, I’m seeing that the meeting that Andy is asking me to go is conflicting with the Sounders game actually on Thursday. So, I’m going to open it up, and from here, I can see actually Andy, who he’s inviting. I can see the pictures of who is coming as required attendee and who’s coming as optional. And I’m going to have to decide between the Sounders game and the debrief for WPC. Where is Andy here? I think I’m going to have to decline this meeting. (Laughter.) Sorry, I have a conflict. (Laughter.)

OK, I can correct this, and then send it. And, of course, you have that going over to the Exchange account, and he’ll get the confirmation right there. (Cheers, applause.)

And as you can see, it disappeared from my calendar. So, I’m free to go to the Sounders game now.

So, if I open up that appointment that actually Brad Brooks sent me earlier, it’s also a meeting request. I can see who’s coming into the meeting, and I see that Brad organized it, and he’s inviting a couple of us.

He’s saying here that — oh, he’s saying that he has an extra ticket. I can probably send that to Andy, and that meeting will get cancelled probably. (Laughter.)

All right, so the other thing is that as you saw, the address for the stadium was right there on the directions for the meeting. So, I just click on the address, and it takes me immediately to the mapping application. I don’t need to actually close my calendar and open up the mapping application; it flows very naturally. And as you can see here, that’s the address for the stadium. If I start zooming in, you can see how great it zooms.

And it comes by default on the map view, but if I keep zooming in, Windows Phone is smart, so it knows that I’m trying to actually look at the picture here, and it will switch into the satellite view to show me. So, it’s automatically switching to the satellite view because it’s knowing that I’m trying to actually look at the stadium and go there. (Cheers, applause.)

Now, it also is location aware. So, it knows where I am. It knows that I’m in the Verizon Center, right? So, when I do that, then I can click on directions, and I can say, you know what, I need to go from here, from the Verizon Center to the stadium, and it will give me directions so I can get there without trouble. It will give me directions by walking or by car or anything like that. So, everything flows very, very naturally, as you can see.

Good. So, the next thing that I want to do now is actually now that I have dealt with the conflicts on my calendar and all those things, I want to see some of the pictures that I took yesterday. So, I’m going to the Pictures hub here where I have everything that is picture related into just one place.

So, here I can see the pictures that I have taken, and I can see all the pictures here. As you can see, I can look at the pictures. That’s my camera roll, which are some pictures that I took yesterday with my phone when I was walking around watching WPC. But I think the most important thing is that it automatically connects, and this is, again, our integration with the cloud, and how everything just flows naturally. So, everything that is picture-related will come here. I can see my pictures that I have posted on Facebook. I can see my pictures that I’ve posted on my own Windows Live account.

So, you can see, for example, these pictures that we were taking, my dog, the cat is having a lot of fun here. So, it’s a good amount of pictures that I posted on my Windows Live account, and I have access to them right here from my phone without having to go to a different type of application. Everything is in the hub.

And if I keep typing around, I can see all the different pictures that I took. I can also see what’s new, what are the feeds coming from, specifically from pictures, from my friends in Windows Live or in Facebook. Everything in just one place here.

Now, that I know for sure that we’re going to go to the game on Thursday, I want to go to my Office hub, which is a place where we have everything that is Office-related in just one place, and of course we are going to have here access to OneNote for taking my notes, to the documents that I have saved from my attachments that I receive on my e-mail, or something like that. I have access to SharePoint, which is basically the ability to get synchronization between SharePoint on my phone, or documents, I can make comments and synchronize all those things back into the SharePoint for access of all my other teammates.

But what I want to do right now is to actually open up this OneNote that I’ve been actually taking care of to  I’ve been taking notes about the things that I need to do for this after party we’re doing after the game. So, I was taking notes about ordering something for food, like burgers, hot dogs, hot wings, get a better TV, buy beer, streamers. And I see that Brad actually posted a picture because I shared this SkyDrive OneNote in the Web, so he has been posting information here, like, for example, the people who are going to be coming. So, apparently it’s going to be some of us coming.

I can actually enter here and leave him a note, or I can enter a voice recording note on my phone. I can click on that and say, “Get more beer,” and then stop it. And now I have my note in there, and I know that when I go actually to do my grocery shopping, I can actually go and buy more beer for all the crowd that is coming for the after party.

So, now that I have drawn on all these themes, I have a little bit of free time this afternoon, so I want to see if I can go to the movies. For that, I just go to my Bing search, and here, again, through the power of Bing, we can actually do searches that are smart. Like, for example, I want to go to the movie theaters to see what’s going on. It knows where I am, so it will pull up all the different movies that are playing right now, so I know what movies I have available here. These are the movies that I have in here. But if I drive to the side, it will actually map for me all the different movie theaters that are around this area, so I know where I can go, and I can go easily right there without a problem. (Applause.)

Another thing that I can do is, I know that we’re going out to the game on Thursday. After the game, we’re going to this after party that I don’t know how long it’s going to last. And I know that I’m flying back to Seattle on Friday. I know that my flight number is the Alaska 1. I can click on that, and it actually will connect into the Bing search engine, the decision engine. And it’s going to tell me when exactly that Alaska flight leads to  what is the time of the flight leaving, 7:59. So, I’m going to have to wake up really early, or maybe not sleep. And it tells you also if you have delays or things like that. So, again, it’s connecting to Bing search through all this integration and bringing all the information that is important for you.

And now that I have arranged everything the last thing that I will do is take some games. So, what I can do is I can just go to my Xbox Live hub. Here I can see the different games that I’ve been playing with, and the list of games, everything  every game that you have on your phone is going to come up here. You can do turn-by-turn gaming and things like that. Stay tuned because, in late August, we’re going to be announcing at a game conference one of the key games that we’re going to be having on the Xbox Live platform for Windows Phone 7. But, then the other thing is that this is my real avatar from my gamer tag in Xbox Live. It brings your avatar in here with address, I’m wearing my Saunders T-shirt right here, and I have all my achievements and how much gamer score I have in my account. So, everything is very integrated with Xbox. So, with these, I would like to go back to Andy. And I know they’re going to be talking more about Xbox. So, I’m very excited about the phone. I hope you guys are as excited as we are. Thank you very much.

(Cheers and applause.)

ANDY LEES: So what do you think?

(Cheers and applause.)

We’re back, and we’re back with something very different and very innovative. And one of the things that we want to do is we want to make sure that our investment creates you opportunity. And one of the ways that we do that is by providing a powerful new application in with Windows Phone 7. This platform is built upon Silverlight, .NET and XNA. This means that you can take code that you write for the PC, the phone, and the console and the cloud and mix it up. You can take assets that you’ve already been developing and transfer them directly over to the phone.

When you’re writing code, you do that using Visual Studio and Expression. In fact, we did that, because 65 percent of the developers on the planet use those as their primary development tools. It’s very fast and very easy to create applications.

The other thing is that, we have a problem with fragmentation in the phone. And so we’ve worked with the OEMs, and you’ll have a very consistent hardware target — this means that you don’t have to worry about lots of screen sizes, the capability of the phone. We have this whole set of minimums to make sure that you design once, and you run absolutely everywhere with 100 percent consistency, so that you are as productive as possible. (Applause.)

Then finally, we provide a marketplace, a marketplace that enables you to go through to be able to sell the applications and perhaps games that you are developing. And all of this is available by going to Developer.WindowsPhone.com. I sometimes get asked, “Is this real? Are we ready?” Well, I’m very excited to tell you that we now have available  we’re just announcing that we have reached the final beta of our development tools, and they’re available for download right now.

In fact, and we don’t have very many of these, but we’re already shipping phones, engineering phones to developers, just starting tomorrow, so that they can sort through to make sure that they can test their individual phones. We don’t have them for everybody, but we will be going through and shipping these apps. So, we’re real. The demo that you saw is on real hardware, making sure that things are working for you.

So, we’re going to be available this holiday. And we’re going to have a range of different phones from different hardware makers, including HTC, Samsung, LG and Dell. It’s going to be available simultaneously at operators around the world. We’re launching in English, French, Italian, German and Spanish. It’s the first time ever that you get the PC, the phone, the cloud, and the console all working in harmony. It’s the first time ever that you have Office, SharePoint, Zune, Windows Live, Xbox Live, Bing, Facebook, all integrated into a unique experience.

We’re also introducing a whole set of services and expanding the global footprint of those services around the world with things like Zune. We have new services that we will be providing, including a new website, a companion website for your phone that enables you to do things, like, if you’ve lost your phone, it will tell you where it is free of charge. You can ring it, lock it, wipe it, whatever you like just from the website up in the cloud. (Applause.)

I want to be very clear, this phone, although we like to demo a lot of the consumer things, it’s for business and consumer. It’s a great opportunity for you. If you’re an ISV, you can develop applications, games and line-of-business solutions. If you’re a systems integrator, you can use the service  you can provide services as part of mobile, business productivity, helping your customers get the most out of Exchange and SharePoint, and the infrastructure that they’ve already invested in. No new infrastructure, no new costs, just take advantages of the capability in Windows Phone 7. Windows Phone 7 for us is a completely new strategy. We believe it’s a completely different kind of phone. The Windows Phone 7 brings you everything you need and love together into the palm of your hand.

Let’s change gears now and talk about and see why 2010 is going to be the biggest year ever for Xbox. Xbox has been an amazing success over the past decade. It’s a very powerful consumer brand with a worldwide community of more than 40 million fans and growing through Xbox Live. And I’m thrilled to say that this is the year that Xbox goes beyond the box. You saw in the Windows Phone 7 demo how your Xbox avatar, achievement and friends will be linked up across the phone and the console.

Xbox Live also enables you to play games across people who have PCs, or consoles, and phones together. And we’ll have a whole raft of specific Xbox titles uniquely available on Windows Phone 7, but it doesn’t stop there because Xbox is going beyond the controller. With the announcement of Kinect for Xbox 360, Xbox is inviting everybody in to a new living room experience. So, to show you that, please welcome Molly O’Donnell who is going to demonstrate what’s new at Xbox 360.

Molly.

MOLLY O’DONNELL: Thanks, Andy. It’s a pleasure to be here today. A decade ago, we unveiled Xbox to the world. And this year, 10 years later, is our biggest and most transformative year ever. Xbox is not only transforming video games, but we’re also transforming the way we enjoy entertainment in living rooms and connect with your family and friends. But, it all starts with the hardware. About a month ago at E3, we announced an all-new Xbox 360. It’s completely redesigned from the inside out. It’s smaller, it’s sleeker and it’s quieter. And the best part, it’s available for the same price as our previous model, and it’s on store shelves and flying off them today.

But, everyone knows you don’t buy consoles just for the hardware alone, you buy it for the games. And if you know Xbox, you know we’ve delivered great games, big gaming blockbuster franchises like “Halo,” “Gears of War,” “Madden” and “Call of Duty.” And, in fact, when we launched “Halo,” it became truly a cultural phenomenon. After 34 million games sold, and over 2 billion hours played online, we have a new chapter that’s about to be told in “Halo: Reach.” “Halo: Reach” is where it all began. You have not played “Halo” until you’ve played it from the very beginning. Let’s take a look, just a small glimpse of what’s in store when it ships this September.

(Video segment.)

So, while “Halo” certainly has transcended video games to define a new generation of entertainment, Xbox Live has transformed the way we play video games and enjoy entertainment in the living room. It really started as simply a global, online, multiplayer gaming service. And it’s grown into a full, broad, social and games entertainment network. And as you heard earlier from Andy, now when you leave your living room this holiday, you’ll be able to stay connected to this community through your new Windows phone.

So, when our executive team looked and said, “Well, how do we expand Xbox and grow it from the millions of people that enjoy Xbox today to the hundreds of millions of people that enjoy broader forms of entertainment,” they decided that it really was the biggest barrier was the traditional games controller. The traditional games controller for many people is too complicated and too intimidating. We want to invite everyone in. And with Kinect for Xbox 360, we’ve removed the final barrier, and we’re going to be launching this November. So, what is it? With Kinect, you are the controller. It recognizes you, it responds to your gestures and it even listens to you. And it’s compatible with the more than 40 million Xbox 360 consoles in homes today. (Applause.)

So, let’s take a look. All I have to do is wave, and Kinect recognizes me. It’s going to be bringing up the Kinect Hub, which is a simple controller-free menu of all the things I care about. So, you can see here, I’m signed in as The Mollywood. We have opportunities to enjoy music, watch movies, do social networking on Facebook and Twitter, all from your living room. You can also enjoy, when it launches this fall, over 3,500 live sporting events with ESPN, and through Video Kinect, you can video chat with your friends and family whether they’re on Xbox Live or Windows Live Messenger.

But, there’s more. Simply swipe over, you can see, you can watch movies from your Netflix queue, and even live TV from such partners as Channel+ and Sky. So, for this audience, I’m going to give a little bit of a peak underneath the hood. This is not something consumers will ever see, but the first time I saw it, I thought it was pretty magical, and it’s really the underlying technologies. So, there you see me in a full three-dimensional space with full body skeletal tracking. (Applause.) But the best part is what’s  I’m looking pretty slick today  what that can do to my avatar, if I kick, he kicks; if I jump, he jumps; and if I wave bye to this section of the demo, he waves bye right back to me. So, I thought that was pretty cool. (Applause.)

So, let’s take a look about how Kinect transforms the movie viewing experience. So, here I’m going to select my movie library. Here in Zune, I can find all of my movies, my TV shows and any videos. I want to select just simply with my hand, hold and hover, “Harry Potter.” I’ve seen this before, and I think many of you may have seen this before, so let’s fast forward to one of your favorite scenes. Simply with a motion of your hand, fast forward, little rewind, and there we go. All simple, natural and effortless. And as simply as I can do that with my hand, I can also use my voice. Check this out. Xbox, pause. (Applause.) Get up, get my popcorn, fill my drink, and come back to my comfy sofa. Xbox, play. This is what we mean when we say controller-free entertainment. Xbox, stop. (Applause.) No more fumbling for the remote. (Applause.) So, that’s what Kinect can do to your entertainment.

Let’s take a look at what Xbox can do with the games experience. I have two games here today to show you. “Kinectimals” is a game where kids of all ages can adopt and play with their favorite animals from around the world in ways never before possible. It’s a totally unique and immersive environment where you develop relationships with animals that you wouldn’t normally own. And because I couldn’t tear my daughter away from Girl Scout Camp in Seattle, I’ve invited another special young friend to come demo with me. Ali? (Applause.)

ALI: Hi, Skittles. Be careful. Hi, buddy. (Applause.) Good boy. Come on, Skittles, back up. Good. Good boy. Ready? Jump. That’s OK, Skittles. Ready? Good boy. Play dead. (Applause.) Come on, boy, there’s no need to be dead anymore. Go get your toy and hide it. (Laughter.) I enjoy Skittles. Hi, come here. Come here. Good boy. Go get your jump rope. I know that tastes really good, but I need that. Thank you. Are you ready? (Applause.) That was a cool trick, Skittles. Thank you. I love you, too. That’s enough. Bye, Skittles. Love you. (Applause.)

MOLLY O’DONNELL: Nicely done. (Applause.) How awesome was that? Awesome.

So, in addition to that tiger there, there are going to be up to 40 different animals that kids can adopt when it launches, and over 30 different unique activities. So, there is a ton to discover in this game.

So, Ali, let’s take a look at another game, maybe something we can play together.

ALI: OK.

MOLLY O’DONNELL: OK. The next game is called “Kinect Adventure.” Why don’t you get us started. “Kinect Adventure” is, you travel with your friends and family as a team of adventurers. You go through 20 different adventures to win your chance to become the expert family. As you see here in this tutorial, this is just one small place in the game, this is called River Rush. You’re in a raft going down a rapid river, you’re trying to make it through the course markers, getting precision points, you’re jumping for air over ramps and logs, and mostly, you’re having fun either by yourself or, again, since this is a collaborative game, so with somebody as well.

So, Ali will get us started here immediately by registering her avatar, picking her up and jumping to start. She’s also clutching those adventurer pins for more points and doing a great job at it. Now get that ramp, big air, nicely done.

ALI: Come on, Molly, jump in.

MOLLY O’DONNELL: OK. I don’t want to ruin your  so you can see it immediately registered my avatar, no going back to restart. OK, over here. I missed it, that was my fault. Photo moment, this is a showoff-and-share moment. We’re going to be able to unlock those pictures later on your social networking sites and embarrass your friends and your moms. Precision points, precision points, OK, up the ramp. Oh, it helps to work together. We’re going through the tunnel. This is Pointsville. Nice. Home stretch here, down the last rapid, point, point, going for gold here. Photo finish, say cheese. (Applause.) And there you go. The RGB camera is taking all of those photos, and what did we do here? Gold, nicely done.

Thank you so much, Ali, for letting us show a little bit of the magic behind Kinect. (Applause.) So, what do you think? Easy, and fun, and a good workout. So, thanks, Ali.

And that’s just a taste. At launch this holiday, we’ll have 15 Kinect games in genres ranging from dance, sports, fitness, racing. I hope you really enjoyed a little fun, and what’s going on in the Xbox world today.

So, with that, I want to end with, 2010 is really the year Xbox 360 is transforming video games and entertainment. And we’re inviting everyone in. Thank you very much. (Applause.)

ANDY LEES: So, let’s recap what you’ve seen. You’ve heard us talk about our vision for bringing together great software and services to the many screens of people’s lives. This holiday will mark an important milestone in realizing that vision, as we deliver magical, transformative, experiences for consumers. And we’re doing this by providing rich services with your personal cloud, with Windows Live, but also Xbox Live, with Zune and with Bing. We’ve combined that with new hardware platforms that bring the experiences to life, with Windows-based PCs, Windows Phone 7 and Xbox 360 with Kinect. These new products work together in a way that nothing has done before it, available ever in the marketplace.

So, this will be our best holiday ever. It’s also, we think, an opportunity for you to build your business and have lots of fun. Thank you very much. (Applause.)

END