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Microsoft Sees Lucrative 'Halo' Effect in 2009

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Microsoft CEO Steve Ballmer vowed to push through the country's economic doldrums with increased investment in research and development in the opening keynote Wednesday at the Consumer Electronics Show.

Citing more than $8 billion in R&D expenditures at Microsoft last year, he said pulling back risked losing competitive advantage.

"But no matter what happens with the economy or how long this recession lasts, I believe our digital lives will only continue to get richer," said Ballmer, who made his first keynote appearance in place of Microsoft founder Bill Gates, who had made a tradition of kicking off CES going back 15 years.

Ballmer and other Microsoft execs gave a guided tour of all things new at Microsoft, including an introduction to the latest version of its operating system, Windows 7, which was just released in beta mode. The company also had plenty to share on the entertainment side, including a double blast of its successful Halo franchise: Two new titles will be released in 2009. On Feb. 28, Halo Wars will be in stores with a "teen" rating that should open up the franchise to more gamers. Halo 3: ODST will arrive in the fall; its acronym stands for Orbital Drop Shock Troopers.

"This year is going to be a blockbuster year in the Halo universe," said Robbie Bach, president of entertainment and devices division at Microsoft.

Bach also reported renewed interest in TV, movie and music content on Xbox Live Marketplace, its gaming console's virtual storefront, since the addition of the New Xbox Experience in November. Content downloads have increased 60 percent since NXE was launched on Xbox Live in a bid to give the platform a more visually dynamic look.

In addition, Bach gave a demonstration of another new content channel on Xbox Live based on the game show format from Endemol, 1 vs. 100. Coming to Xbox's Primetime Live channel in the spring, 100 has been adapted as a multiplayer interactive game that can be played live remotely.

Bach also touched on the recent addition of Netflix to Xbox Live. "This has really been a fabulous addition for us," he said. But he offered no specifics on how well the new service is performing.

Microsoft and Netflix are launching a new application on Windows Mobile that allows Netflix users to control their queue from their wireless device.

Microsoft announced that it had struck a deal with Facebook to offer its service embedded on Windows Live, which also will come pre-installed in Dell computers. Live Search also will be made available in Verizon Wireless handsets.