The combination creates a unique digital entertainment offering: IPTV on Xbox 360.

It is expected to be available to consumers by holiday season 2007 and will be offered by providers that are deploying TV services over broadband networks based on the IPTV Edition software platform.

The integration of a video gaming console with Internet Protocol Television (IPTV) services is intended to deliver a first-of-its-kind entertainment experience. IPTV on Xbox 360 is expected to give consumers all the advantages of an advanced TV service along with the benefits of next- generation gaming, as well as unique new capabilities that the integrated solution brings. Xbox Live(R), the largest online social network in the living room, will be seamlessly integrated into the experience, providing consumers with a wide range of community-based features, such as voice chat, sending and receiving text and voice messages, and accessing Xbox Live Marketplace, all while watching TV. For example, while a TV viewer is enjoying his favorite football game, he can receive a message from a friend inviting him to a join voice chat while watching the game, or to play a game of their own with EA SPORTS(TM) ''Madden NFL 07'' on Xbox Live.

''Both Xbox 360 and Microsoft TV IPTV Edition by themselves deliver unique and exciting entertainment experiences today, but IPTV on Xbox 360 is truly a solution that is greater than the sum of its parts and will enable even more exciting experiences to delight consumers, service providers, content providers and game developers alike,'' said Robbie Bach, president of Microsoft's Entertainment and Devices Division. ''By integrating these industry-leading solutions, we are delivering on our promise to drive innovation and enable new connected entertainment experiences for consumers in a way that only Microsoft can.''

With the addition of IPTV Edition functionality, Xbox 360 builds on its position as the centerpiece for high-definition digital entertainment in the living room, offering the best in next-generation games, TV and movies along with the ability to share experiences online with the industry-leading online game network, Xbox Live. Xbox 360 continues to extend its lead with more than 10.4 million consoles sold in 37 countries since launch.

The Microsoft TV IPTV Edition software platform enables a best-in-class digital TV service that offers advanced features such as instant channel zapping, a rich and responsive user interface, video on demand with branded video-on-demand storefronts, digital video recording and high-definition television. Some of the world's largest telecommunications service providers have chosen IPTV Edition as their IPTV software solution, with scale commercial deployments currently under way with AT&T in the United States, BT Group PLC in the United Kingdom, Deutsche Telekom in Germany, T-Online in France and Swisscom in Switzerland.