STEVE BALLMER: Well, I’m certainly excited to have a chance to be here with you today. I want to say thanks to everybody. For me, I’ve been now a week on the road traveling, seeing customers, wearing suits, nothing is quite as good as being at a game conference, I have to say, for a fun way to end a long week. Thank you. (Applause.)

We’re in the middle of exciting times in our company. We’ve got a lot of great new products. And we’re launching the new phone on Monday. But nothing in a sense is as exciting as the Xbox Kinect, which we’ll get a chance to show you here today.

We’ve been hard at work on a lot of things in the Xbox area. We’ve got a lot of new great games coming, whether it’s Halo Reach, Fable 3, Call of Duty: Black Ops, so a lot of great innovations. But the Xbox Kinect, which we’re going to show you today, and which will become available here during the course of November, I think is really something quite unique, and quite an interesting story that I would like to share with you a little bit.

Microsoft as a company is about 35 years old. And when Bill Gates started Microsoft, there was kind of this vision of putting a computer on every desk and in every home. And at some point every home meant every living room, every TV set, every phone. But really bringing the power of technology into the living room has proven really an interesting set of innovation challenges.

We started in earnest 10 years ago when we began the early days of Xbox. And we’ve worked very hard to evolve the position. But about three-and-a-half years ago, we decided we had to do something different. For a lot of people who weren’t necessarily the hardest core gamers, we really needed a different way to interact with the machine. I still think of people like my wife as a proxy. She won’t touch a game controller I’m afraid to admit to this audience. And it wasn’t just for those folks, but what else could we do even in terms of intense game play if we could reinvent the way you would interact in the TV in the living room. And we said, how do we do better? How do we do better?

Our research people were working on a lot of interesting technology, gesture recognition, depth sensing, speech recognition, how do multiple people interact across the Internet, how do you recognize somebody’s face, sense their motion? How do you get the speed and performance? How do you do computer vision so the computer can recognize action?

And we’ve had our research people who had been working in a number of these areas for a while, and we said, we can do this. We can try to bring a technology to the living room that will be great, fantastic, for gaming, but also will open up a whole new world of possibilities in terms of putting a computer, if you will, in every home, and in every living room.

On November 10th, we will launch Kinect for Xbox 360, which we think is really a whole new way of interacting with entertainment, with games, with all the kinds of things that people want to do not only themselves but with the other people in their living rooms, and with their friends who are in living rooms in various places around the world.

It’s a social experience. It’s a gaming experience. It’s a movie experience. It’s a television experience. And as we’ve shown that Kinect is a next generation way of interacting we’ve received a lot of positive feedback from some of the early folks who have had a chance to see and experience. But, ultimately it will be the entertainment experiences that get delivered, starting November 10. So, we’re very excited about what we have coming with Xbox Kinect here in the course of the next month or so. But, it’s really still just a start.

There’s a whole revolution of applications and entertainment experiences that we think will build on this whole notion of natural user interface.

And what we’re going to show you today is just one of what we hope will be hundreds and thousands of different entertainment experiences, based upon this new way of interacting that has the opportunity to really revolutionize the use of computers and entertainment and family fun.

What I’d like to do now is introduce a couple of folks who are going to have a chance to show you the Kinect. One of them works at Microsoft, Hugo. Hugo is going to come on stage, but Hugo is going to be joined today by Isabel. Please welcome those two. (Applause.)

I just had a chance to meet Isabel, and I’m sure they’ll introduce themselves. She doesn’t work at Microsoft, but she does have some unique experience relative to the demonstration. So, let me pass to the two of you.

(Demo segment.)

STEVE BALLMER: I want to say thanks to everybody. It’s been a pleasure to welcome you here today. (Applause.)

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