Microsoft Add Football, Cartoons to Expand Xbox Platform

Microsoft Corp. (MSFT) expanded the sports and entertainment content offered through the Xbox, adding shows like “Monday Night Football” to extend the life of its gaming console and step up competition with Sony Corp. (6758) and Nintendo Co.

The Xbox 360’s online service will gain 35 entertainment providers, Yusuf Mehdi, chief marketing officer for Microsoft’s Interactive Entertainment division, said today at the E3 trade show in Los Angeles. Microsoft also introduced an application called Xbox SmartGlass that will link the console to phones, tablets and personal computers from Microsoft and rivals.

Microsoft is seeking to turn Xbox into a home-entertainment system that lets consumers share programs and information with all their devices, both competing with and connecting to gadgets from Apple Inc. (AAPL) and Google Inc. (GOOG) Microsoft doesn’t plan to unveil a new console until next year at the earliest, people familiar with the matter said in March, so SmartGlass and the added programming will help refresh the Xbox amid competition from Sony’s PlayStation 3 and a new Nintendo console.

“It’s a smart move,” said Michael Gartenberg, an analyst at Gartner Inc. “It positions Xbox as the center of a personal cloud ecosystem while allowing consumers to preserve the value in their current hardware.” Customers will probably be able to use the SmartGlass app on existing iPads and iPhones, for example, Gartenberg said, citing a briefing from Microsoft.

SmartGlass App

Microsoft, the world’s biggest software maker, will release SmartGlass this year, allowing content makers to create uses for the app. For example, HBO could use it to provide “Game of Thrones” information to a viewer’s tablet while he or she is watching, or Electronic Arts Inc. could let “Madden NFL” video-game players draw a new play for their running back on their phone and have the player execute it in the game, Mehdi said in an interview before the speech.

The app will also serve to provide additional uses for Windows Phones and Windows 8 tablets and PCs, scheduled to go on sale later this year.

The new content, games and programs serve to round out Microsoft’s vision of Xbox as entertainment hub, as Google and Apple try to market television products and Sony and Nintendo approach the market through their game consoles. Nintendo has already announced a new machine, the Wii U, set to go on sale later this year. Redmond, Washington-based Microsoft said today that Xbox is now the best-selling video-game machine worldwide.

Console Market

Microsoft has made market-share gains in a slumping U.S. video-game and console market. The company racked up more than 40 percent of U.S. console sales for 14 months straight through April, according to market researcher NPD Group Inc.

In that month, U.S. sales of video-game hardware, software and accessories tumbled 32 percent as consumer buying shifts to downloads and games on social sites, said Port Washington, New York-based NPD.

“At a time when entertainment is becoming more interactive, more fun, we are bringing together games, movies and television shows on every screen in our lives,” said Don Mattrick, president of Microsoft’s Interactive Entertainment division, in a speech at E3.

Microsoft rose less than 1 percent to $28.55 at the close in New York. The shares have gained 10 percent this year.

Viacom, Univision

New content for Xbox Live, which has 40 million subscribers, will include Paramount films and Nickelodeon cartoons from Viacom Inc. (VIAB), shows from Spanish-language broadcaster Univision Communications Inc., 24-hour ESPN programming and National Basketball Association games.

NBA League Pass will be available on Xbox Live for a fee, giving customers more than 2,400 games, Mehdi said. A National Hockey League subscription package offers more than 40 games a week, he said.

Nike Inc. (NKE) will release a fitness game that uses Xbox and its Kinect sensor to scan a customer’s body -- it can even tell if the user has had knee surgery -- and recommends a workout plan. The Kinect will then track whether the user is doing the exercises correctly.

Microsoft today also demonstrated “Halo 4,” the next installment in best-selling Xbox-only game franchise, which is due to be available this fall.

In addition, the company showed an Xbox Music service that is a revamped version of its Zune offering. The service will offer 30 million tracks that can be accessed on any Microsoft device. The company will also offer an Internet Explorer browser for Xbox.

To contact the reporters on this story: Dina Bass in Seattle at dbass2@bloomberg.net; Andy Fixmer in Los Angeles at afixmer@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net; Anthony Palazzo at apalazzo@bloomberg.net

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