didn't deliver a much-speculated price cut to its Xbox 360 game console late Tuesday, instead choosing to focus attention on the device's upcoming game lineup and an online movie deal.
Microsoft announced a partnership with
to bring the entertainment giant's movie catalog to Xbox Live, Microsoft's online marketplace.
Starting Wednesday, Microsoft will offer users high-definition movie downloads through the Xbox Live service, said Peter Moore, Microsoft's vice president, interactive entertainment business, late Tuesday at the E3 Business and Media Summit in Santa Monica, Calif..
Microsoft's Xbox Live marketplace has 7 million members, and the company hopes to have more than 10 million by the same time next year.
The partnership with Disney, while interesting, is unlikely to capture investor attention. Analysts and investors were hoping to hear Microsoft announce an Xbox 360 price cut on the Xbox 360 to match rival
move on Monday.
Sony dropped $100 off its pricey PlayStation 3 console and said the 60-gigabyte PS3 will now retail for $499.99.
The Xbox 360 sells from $299.99 to $479, depending on the version.
Shares of Microsoft were recently up 7 cents to $29.40.
Instead of a price cut, Microsoft touted its massive lineup of games it has planned for the Xbox 360 this year, including
Madden NFL 08
Grand Theft Auto IV
Xbox 360 was launched in May 2005, a year and a half ahead of Sony's PS3 and
Wii, which has become the best-selling console since its release.
Microsoft's head start helped it sell 11.6 million devices as of June, but recent technical issues bring into question the console's prospects.
Last week, Microsoft said it will take
$1.05 billion to $1.15 billion in pretax charges due to warranty-related issues. Microsoft said it will extend its warranty from a year to three years from the date of purchase to cover a hardware problem in the Xbox 360 that manifests itself as three flashing red lights on the console.
Microsoft also said Tuesday it will release its premium console, Xbox 360 Elite, in Europe on Aug. 24. The Elite was launched in the U.S. in April.
It also plans to strengthen its portfolio of PC games and said it will bring nearly 30 new Games for Windows-branded titles to stores this holiday season.