Microsoft Game-Hunting

As for Halo 3, the only detail Microsoft released was that it would launch next year. The company also showed some video footage from the game. The original Halo was considered to be one of the only "killer applications" for the first Xbox, helping drive sales of the game machine. Halo 2, released in the fall of 2004, was the top-selling game ever for the original Xbox. Analysts and gamers have been eagerly awaiting news of a sequel.

Microsoft launched the Xbox 360 last fall and has been trying to grab as much market share as possible before Sony and Nintendo launch their rival game machines. However, the company largely missed the holiday shopping season last fall because of supply constraints and had sold little more than three million of the game systems by the end of March.

But Microsoft expects sales and shipments to pick up now that it has a third manufacturing partner for the device. The company expects to reach 5 million shipments by the end of next month and 10 million shipments before Sony releases the PlayStation 3 this November, Moore said.

"Our No. 1 priority was to get consoles to shelves as quickly as we possibly could," Moore said, acknowledging that the company has hit some "potholes" along the way.

Sony plans its own ambitious launch for the PlayStation 3. At a similar press event on Monday, the company announced that it planned to ship 4 million units of the console by the end of this year and a total of 6 million by the end of March next year.

In addition to the blockbuster games, Microsoft is hoping to boost the Xbox 360 by tying it to its Windows platform. The company plans to roll out a service called Live Anywhere that will connect Xbox 360 users with Windows PC and Windows Mobile users. In a surprise appearance at the conference, Chairman Bill Gates laid out Microsoft's vision for the service.