PRESS RELEASE
Windows XP Media Center Edition 2005 and Xbox 360 to Provide Unprecedented Digital Entertainment Experience Throughout the Home

Free Windows software update will make digital music, videos, photos, standard and high-definition television and movies available through Xbox 360 at the touch of a button.

LOS ANGELES – May 17, 2005 – At the Electronic Entertainment Expo (E3) 2005 in Los Angeles, Microsoft Corp. today announced it will release a free software update to Windows® XP Media Center Edition 2005 that will enable customers to take advantage of the Media Center Extender technologies built into Xbox 360 TM gaming systems to access and enjoy digital entertainment anywhere in the home. Every Xbox 360 will have Media Center Extender functionality built in and available out of the box. The Media Center Extender functionality, coupled with the software update for Windows XP Media Center Edition 2005, will provide customers with seamless access to digital music, video, photos, and standard and high-definition television and movies on Media Center Edition 2005-based PCs through any Xbox 360 game console in the house.

“Microsoft continues to advance its vision of digital entertainment anywhere,” said Will Poole, senior vice president of the Windows Client Business at Microsoft. “The combination of the worlds most powerful gaming console, Xbox 360, with a Media Center Edition 2005-based PC results in an unprecedented home entertainment experience for our customers. By seamlessly integrating Microsofts premium entertainment devices, we are greatly enhancing the ways in which our customers will experience entertainment in and around their homes.”

Microsoft® Windows XP Media Center Edition 2005 offers people around the world the widest range of entertainment experiences on the PC. Customer and industry support for Media Center Edition 2005 has never been stronger, with sales of Media Center PCs eclipsing the 2 million mark in April. In addition, there are more than 90 computer manufacturers and 7,000 system builders shipping Media Center PCs in 13 countries, with 20 additional markets planned by the end of the year. Media Center PC customers also can access more than 35 industry partner content and service providers across the globe via the Online Spotlight feature of Windows XP Media Center Edition 2005.

Inclusion of Media Center Extender technologies in Xbox 360 represents Microsofts latest effort to provide consumers with seamless access to the same great experience provided in Media Center Edition PCs on any TV in the house. The Windows XP Media Center Edition 2005 experience will be accessible on Xbox 360 systems by pressing the green button on the new Xbox 360 remote control. And, for the first time ever, the extender technologies that are built into Xbox 360 will enable customers to enjoy high-definition entertainment. For example, Xbox 360 will let players stream high-definition TV and movies stored on Media Center PCs, allowing them to watch a high-definition sports event while they chat with friends in other parts of the country who are watching the same game. Or they can receive a friends invitation to play a game while watching live television.

“By integrating diverse technology expertise and innovations across the company, Microsoft is able to deliver rich digital entertainment experiences that consumers have been asking for,” said Robbie Bach, chief Xbox® officer at Microsoft. “The Windows XP Media Center Extender technologies in Xbox 360 will make the living room a place where both experiences seamlessly converge and are easy to enjoy.” Xbox 360 is the future-generation video game and entertainment system that places users at the center of the experience. Xbox 360 will ignite a new era of digital entertainment that is always connected, always personalized and always in high definition. Xbox 360, in addition to including Media Center Extender technologies, features the Media Blade, which will allow customers to select Remote PC to access the digital photos and music they have stored on any Windows XP-based PC.

Availability

The software update to Windows XP Media Center Edition 2005 that enables Media Center Extender functionality in Xbox 360 is scheduled to be released in the second half of 2005. It will be available as a free download to current Windows XP Media Center Edition 2005 customers, as well as on new PCs. Xbox 360 is scheduled to be available this Christmas holiday season.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.