Speaking at the 2007 International Consumer Electronics Show (CES) in Las Vegas, Microsoft Chairman Bill Gates and Microsoft Entertainment and Devices Division President Robbie Bach showed how the company is delivering a new generation of connected experiences that are inspired by the universal desire to create community and share interests and passions with friends and family.

Gates and Bach announced several new products and services that include new Windows Vista-inspired PCs, never-before-seen Windows Vista features, an Internet Protocol Television (IPTV)-enabled Xbox 360 video game and entertainment system, and a new partnership with Ford Motor Co. that will extend digital experiences to the car. The company also unveiled Microsoft Windows Home Server, which provides a central place to help store, protect and access all the digital content in the home. Click here to see the full transcript.

In a move that will combine the power of Xbox 360 with Microsoft TV IPTV Edition, Bach provided an early look at a new service, IPTV on Xbox 360. The offering is expected to deliver world-class TV experiences such as digital video recording capabilities, with gaming, movie viewing, and even voice and video communications. Tapping into an expanded set of entertainment experiences, users will be able to watch their favorite sporting event live while chatting with their friends, for example, or participate in a match on Xbox Live while they record a TV program in the background. IPTV on Xbox 360 is expected to be available to consumers by holiday season 2007 and will be offered by providers that are deploying TV services based on the Microsoft TV IPTV Edition software platform.

From the keynote yesterday:

Now, I know that some of you may have seen IPTV in the past, but what I can guarantee that none of you have seen is IPTV running on an Xbox 360. (Applause.)

I'm going to bring up the Xbox guide, and I'm going to go ahead and accept this game invite for Gears of War. The bringing together of IPTV and Xbox 360 is going to give me all of the amazing next generation features of IPTV and the rich connected experience of Xbox Live. So I'm going to be able to get game invites, but what's really cool is using a headset I can actually talk with my friends while we're watching TV.

Now, I'm going to start up Gears of War here, and for me, being able to play games on an Xbox 360 and watch TV as an enthusiast, Xbox 360 now does everything I want in my living room. I can play the best next generation games, download movies and TV shows, connect to my Windows PC and access my music and my photos, watch HD-DVDs, and now experience next generation TV programs with IPTV.

This is everything I want, it's all in one box, it's all on Xbox 360.

Now, the thing I want to point out is that IPTV on Xbox 360 allows our service providers to really differentiate their TV experience, because now on one box not only can you get an amazing TV experience through IPTV, but you do get all that great gaming experience that is Xbox 360.

Microsoft TV IPTV Edition continues to strengthen its position in the market with deployments under way with five of the world's largest service providers and trials with 11 additional companies, representing a footprint across 14 countries on four continents.

Bach also showcased the strong momentum behind Xbox 360 and highlighted the company's success in delivering high-definition viewing experiences with HD DVD. Exceeding expectations by hitting the 10.4 million-console-sold mark this holiday season, Xbox 360 is the leading next-generation games and entertainment platform. It is also the largest social network in the living room, with 5 million Xbox Live members.

In addition, strong sales of the Xbox 360 HD DVD Player and strong demand for downloadable movies and television programs are a clear indication that increasing numbers of consumers see Xbox 360 as an ideal device for connecting to a broad range of entertainment experiences. In just over a year, people have downloaded more than 100 million pieces of content to their Xbox 360 consoles, which include game content, television shows and movies.