LOS ANGELES - May 12, 2003 - Illustrating a bold vision to expand video game entertainment by embracing what it calls the Digital Entertainment Lifestyle, Microsoft Corp. today unveiled its lineup of new games and experiences for the Xbox® video game system, setting the stage for this week's Electronic Entertainment Expo (E3). With ambitious new games - "HaloTM 2," "Project Gotham Racing® 2" and three new titles from renowned developer Rare Ltd., to name a few - and an impressive list of industry firsts, including "Music Mixer," XSN Sports and new features for the Xbox LiveTM online game service, Microsoft demonstrated how Xbox delivers social gaming experiences that promise to redefine the video game industry forever.

"At the core of everything we do are great games, and in looking to the future, our vision is to expand the definition of video game entertainment by expanding gaming content and merging it with services that will build the gaming community," said Robbie Bach, senior vice president of the Home and Entertainment Division and chief Xbox officer at Microsoft. "The convergence of content and services is being embraced by people whose lifestyle is all about being connected - the Digital Entertainment Lifestyle. Serving this lifestyle, and the gamers who are part of it, is absolutely required for success, and we intend to take a leadership position to grow this industry."

Ambitious Xbox Games Lineup

Ed Fries, vice president of Microsoft game content, provided a sneak peek at the most-anticipated Xbox games in the portfolio, including the hottest new Xbox exclusives:

* "Halo 2" (Microsoft® Game Studios, Bungie Studios). "Halo 2" is the sequel to one of the greatest games of all time. It promises to surpass the original with revolutionary breakthroughs in the way people play games, including engine and artificial intelligence (AI) enhancements, and an unsurpassed team-based multiplayer experience. It will ship the first quarter of 2004.

* "Project Gotham Racing 2" (Microsoft Game Studios, Bizarre Creations Ltd.). The sequel to the million-unit seller, "Project Gotham Racing 2" is the ultimate test of racing skill, style and daring, rewarding drivers for not only how fast they drive, but for how they drive fast - both offline and competing using Xbox Live. It will ship holiday 2003.

* First titles from Rare (Microsoft Game Studios, Rare):

- "Grabbed by the Ghoulies." Rare's first Xbox-exclusive game since Microsoft acquired the company in September 2002, "Grabbed by the Ghoulies" is a fun and chaotic beat-'em-up game that pits the brave and endearing Cooper against the Ghoulies that have captured his girlfriend. It ships holiday 2003.

-"Conker: Live and Uncut." Rare's "Conker" is back in an all-new Xbox Live-enabled team-based shooter focused on story-driven scenarios. With a wide variety of customizable multiplayer scenarios, teamwork (and fun) is what "Conker" is all about. Each scenario has its own objectives, rules, environment and back story, adding emotional context to the genre. It ships in 2004.

- "Kameo: Elements of Power." This is an action-adventure game set in a fantastic kingdom of monsters and magic. Players become "Kameo," a princess on a mission to rescue her three Elemental Ancestors from the Dark Troll King, who has plans to dominate the fantasy planet's wildlife. It ships in 2004.

* "Fable" (Microsoft Game Studios, Lionhead Studios). From renowned developer Peter Molyneux, "Fable" puts the choice squarely at gamers' fingertips: Will they be good, evil or somewhere in between? In "Fable," players choose their identity, determine appearance and abilities, feel effects of reputation, and thus create their own interactive experience. It will ship holiday 2003.

* "Counter-Strike" (Microsoft Game Studios, Valve/Ritual). Designed by Valve and Ritual Entertainment, two of the world's most renowned game developers, "Counter-Strike" is one of the world's most popular PC action games, with more than 75,000 simultaneous gamers playing at any given time. It is the winner of numerous awards and ships holiday 2003.

* "Crimson SkiesTM: High Road to RevengeTM" (Microsoft Game Studios, FASA). "Crimson Skies: High Road to Revenge" is an Xbox Live-enabled flight combat action game that immerses players in the life of a swashbuckling air pirate, bringing the thrills of aerial dogfighting exclusively to Xbox. It ships holiday 2003.

Xbox Live Is Evolving and Growing the Gaming Community

"With a community of over 500,000 gamers worldwide, the Xbox Live service is growing strong and helping us learn a lot about how gamers want to interact with Xbox," said J Allard, vice president of the Xbox platform. "We're continually innovating and expanding the Xbox Live gameplay experience, leveraging what we've learned about what gamers want and allowing the most-talented developers in the industry to take advantage of the endless possibilities that Xbox Live enables."

As Xbox Live continues to evolve over the next year, the growing worldwide community of online gamers will be enticed by a host of new features:

* Xbox Live Alerts. Gamers can receive invitations to play on their personal digital assistant (PDA), cell phone or PC with MSN® Messenger Service.

* Xbox Live Web. Xbox Live stats and friends lists will be available to view through a new Xbox site that links to the service.

* Xbox Live Aware Games. More games will allow users to be "logged on" while playing, even as a single player, so they can receive invitations and keep up with what their friends are doing.

* Teams and Competition. New features on Xbox Live will make it easy for gamers to form teams with friends, and create and participate in structured competitions on the Web and in games.

* Xbox Live Now. Gamers will have a place to meet and can use voice chat to determine where to begin their gaming experience. They can decide which game to play and how to team up, and chat after the game.

By this time next year more than 100 Xbox Live games are forecasted to be available, including the most-anticipated game in the industry, "Halo 2," as well as games such as "Counter-Strike," "Project Gotham Racing 2" and every sports game from Microsoft Game Studios.

Innovative Digital Entertainment - XSN Sports and "Music Mixer" - Debuts

XSN Sports
Microsoft unveiled XSN Sports from Microsoft Game Studios, the first lineup of Xbox games in which sports fans compete beyond the game. For the first time ever, gamers will challenge real people to create their own leagues and build their own rivalries. Launching in August, XSN Sports will change the way the industry develops sports games. XSN Sports features include these:

* Virtual leagues. Teams, leagues and schedules can be organized easily from a centralized Web site, XSNsports.com.

* Check stats on a virtual sports page. Xbox Live will automatically broadcast up-to-date scores, standings and stats to XSNsports.com every 15 minutes. For the first time, gamers can scout the career stats of their next opponent.

* Competition for the digital lifestyle. XSN Sports will keep gamers plugged in - on the Web, on their cell, on their Xbox - where their game is the center of the action.

* Train to be a multisport champion. The XSN Sports lineup will enable gamers to be a one-sport star or even an eight-sport superstar.

Combining the power of Xbox, Xbox Live, PC and mobile devices to redefine the way sports gamers compete, the XSN Sports network will include "NFL Fever 2004," "NBA Inside Drive 2004," "Top SpinTM," "AmpedTM 2," "Links® 2004" and "NHL Rivals."

"Music Mixer"
"'Music Mixer' unlocks the digital entertainment capability of Xbox," Allard said. "'Music Mixer' demonstrates how we can use the Xbox to connect gamers to other favorite activities of the Digital Entertainment Lifestyle, enabling players to access DVD playback,* CD playback, photo viewing, gaming, music storage, online gameplay, enhanced party visualizers and even karaoke."

"Music Mixer" expands the way people play, share and interact with music, allowing any player to be a producer, VJ or American idol. Features include the following:

* With digital lyric-stripping technology, "Music Mixer" will provide a limitless karaoke experience, letting Xbox players sing along to millions of songs.

* Players can mix, match, shuffle and customize soundtracks, setting the mood for any situation. Players can enhance the music experience with the addition of interactive 2-D and 3-D on-screen visualizers.

* With PC media sharing, Xbox players will be able to easily transfer their digital music and photos from their PC to their Xbox system, creating the ultimate multimedia library to be enjoyed in the social center of the home: the living room.