June 29, 2009 / 7:40 PM / 10 years ago

Microsoft does Xbox deal with Canal Plus

* Xbox head says more deals to follow Canal Plus, BSkyB

* Aims to reach 100s of millions including via PC, mobile

* Natal body gesture technology won’t need new Xbox

(Adds comments from head of Xbox, background)

By Georgina Prodhan

LONDON, June 29 (Reuters) - Microsoft (MSFT.O) announced a deal that will allow more than a million French users of its Xbox to watch content from pay-TV company Canal Plus, the latest in a series of such agreements designed to broaden its audience.

The software giant is expanding beyond its core Xbox user base of young, male gamers to position the console as an entertainment hub in the centre of the home, as Sony (6758.T) is doing with its PlayStation and Nintendo 7974.OS with its Wii.

“Our aspiration is to touch hundreds of millions of consumers around the globe,” Don Mattrick, head of Xbox, told Reuters in an interview on Monday.

He said Microsoft would achieve this partly through supporting its Live gaming and media service on PCs and mobiles as well as the Xbox, and through partnerships like the Canal Plus deal and another recently announced with BSkyB BSY.L.

Microsoft says one-third of those planning to buy an Xbox are female and 42 percent of typical users are parents with children under 18.

Under Monday’s agreement, users of Microsoft’s Xbox 360 in France will be able to watch films on demand, premium drama and soccer from Vivendi (VIV.PA) unit Canal Plus on their games console, and Mattrick said more such deals would follow.

They will also be able to use Xbox Live technology to engage with friends via their avatars and to chat during games. Xbox Live has a community of 20 million members around the world.

Microsoft and Canal Plus said they would eventually extend the partnership to other Canal Plus products as well as other Microsoft platforms.

As part of its strategy to broaden the Xbox’s appeal, Microsoft earlier this month unveiled “Project Natal,” which tracks a user’s movements via full skeletal mapping instead of through a controller, and recognises voice commands.

Mattrick said Natal would be backwards-compatible, meaning any users who already own an Xbox would be able to use the new technology without having to buy a new console.

He declined to comment on timing or price, but said development kits had been shipped to partners to develop content. When asked whether this implied a 2010 release, he said: “I’ve heard that line of reasoning and it’s very logical.

Asked about the impact of the depressed economic environment on Xbox sales, Mattrick said the year to end-June would be the best ever for Xbox, which has become profitable over the last two years.

“Our category — entertainment, and home entertainment, particularly — tends to do better in challenging times,” he said. He declined to comment on whether Microsoft would cut the price of the Xbox 360 in the near future.

Mattrick added that he would not be replacing executive John Schappert, who is returning to his previous company, Electronic Arts ERTS.O, after overseeing some of Microsoft’s biggest games including Halo as head of the company’s game studios.

He said that two managers heading Xbox’s Live and studio businesses would now report directly to him.

(Reporting by Georgina Prodhan; Editing by Gary Hill)

((georgina.prodhan@thomsonreuters.com; +4420 7542 7954; Reuters Messaging georgina.prodhan.reuters.com@reuters.net)) Keywords: MICROSOFT CANALPLUS/XBOX Keywords: MICROSOFT CANALPLUS/XBOX

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