Microsoft to link Xbox with its other products

SEATTLE — Anyone snagging one of Microsoft Corp.'s new Xbox 360s when it debuts today will likely see the new video game console as just that — a medium for spending hours playing the likes of "Halo 2" and "Project Gotham Racing 3."

But executives at Microsoft see video games as just the beginning. Xbox 360 is at the center of a strategy that will also eventually tie in elements of Microsoft's new online initiative, called Windows Live, says company Chairman Bill Gates.

Gates said Monday that he expects Xbox Live, Microsoft's service that allows gamers worldwide to play one another, to eventually work with a Microsoft instant messaging program that is slated to become part of Windows Live.

Microsoft already offers limited ways for people on Xbox Live to communicate with those on Microsoft's messaging software, but the new offering — not yet slated for release — would expand that significantly.

Gates said he's also expecting a new Xbox service called Microsoft Points, which lets people prepay for things like virtual armor or other game-related items, to eventually work with Windows Live, so people could use a single account to pay for offerings there, too.

"The PC and the Xbox are very complementary," Gates told The Associated Press.

Windows Live is Microsoft's newly launched effort to better compete with free, advertising-financed Web services like e-mail and search technology from competitors led by Google Inc. and Yahoo Inc.

Analyst Rob Enderle said the move to more closely link Xbox Live with Windows Live intends to bolster loyalty to Microsoft products. Microsoft "can tie that stuff together so that you as a customer become wedded to the Microsoft platform for everything you do," he said.

Microsoft also is attempting to more closely tie Xbox 360 to the rest of its universe by trying to make it a conduit for other entertainment activities such as watching high-definition TV, looking at family photos and listening to music.

Xbox 360 can do some of those tasks itself, and it also can function as an "extender" that links to a PC running Microsoft's entertainment-centric Windows XP Media Center Edition.

"In the living room itself, Xbox 360 is our centerpiece and a product that redefines what goes on there," Gates said.

Microsoft's major console rival, Sony Corp.'s PlayStation 3, also is expected to offer alluring digital entertainment capabilities when it debuts next year.