LAS VEGAS--The Bill Gates keynote at the Consumer Electronics Show. It's a Las Vegas tradition that has, on occasion, yielded major news for gamers. In 2001, the Microsoft boss used the forum to show the world Microsoft's first game console, the Xbox. This year anticipation was running just as high, with widespread speculation that Gates would use the event to unveil the successor to the console, most commonly called the Xbox Next. Consumer Electronics Association president Gary Shapiro helped fuel the excitement last night as he introduced Gates, calling his keynote "the scene of Xbox's launch" before Conan O'Brien appeared onstage to emcee Gates' speech. His quick wit made for an enjoyable segue to the arrival of the man himself.

　　But, alas, there was no Xbox Next unveiling. Although he made mention of the next-generation console in a recent interview with News.com, Gates used the forum to again present the Microsoft corporate agenda to the reporters, analysts, and exhibitors who packed the plush Hilton hotel theater. There was plenty of news, but little of it revolved around gaming. Apart from announcing that Halo 2 had sold 6.3 million units and a couple of Xbox-related throwaway lines, such as "gaming is becoming more of a social thing," Gates spent less than 10 minutes of his two-hour keynote with his game face on.

　　He called Xbox sales in 2004's final months "significant," yet conceded Sony presented "very challenging competition." NPD hardware sales numbers (due next week, according to analysts) will likely show Gates' humility was unwarranted. One analyst, speaking off the record, said the Xbox tore out a large chunk of the PlayStation 2's market share over the 2004 holidays, thanks to the Halo 2 phenomenon and the shortage of the new, slimmed-down PS2s.

　　The only actual game on display was a brief (and technically flawed) Forza Motorsport demo that featured head-to-head competition between Gates and O'Brien, who was the highlight of the evening. Indeed, the TV personality and software titan described Microsoft's future in the consumer electronics field together, with O'Brien prompting questions and Gates answering them in a manner resembling a prolonged talk-show guest spot.

　　Gates touched briefly on how Microsoft was in the process of integrating many different devices, allowing them to function together as well as independently. This integration would come in the form of eliminating numerous remote controls and simplifying basic commands while adding interoperability. The keynote dialogue went on to show how Microsoft was working to further integrate the functionality of cameras, PVRs, cell phones, and gaming devices. Gates then mentioned upcoming products like the Media Center Extender, a device that allows for the transmission of Media Center-recorded content to an Xbox that is connected to a different TV.

　　Gates and O'Brien demonstrated the next generation of cameras with a high-end Nikon D2X. The demo consisted of Conan snapping shots of Gates while onstage, and then wirelessly transmitting them to a computer nearby. The demo failed due to technical difficulties, at which point O'Brien joked, "Right now nine people are being fired--digitally. Wireslessly, no connection. You don't need a firewall…err, I don’t know what I'm talking about."

　　A discussion of images naturally led to video. At this point, a representative from SBC demonstrated how TV would undergo a fundamental shift. With all digital content, PVRs, and lots of bandwidth, the TV would approach a level of interactivity unheard of before. Microsoft calls this next-iteration IPTV, or Internet Protocol Television. In one of the examples given, IPTV would allow for the viewing of a baseball game from any camera angle available at the game.

　　Further advancements would allow for a cell phone to communicate with a media center PC, letting a user remotely change what is being recorded or to preview what has been recorded. Later on, Gates announced a deal with TiVo. The deal would enable TiVo users to transfer recorded content to Windows XP computers, and then to portable video players and even cell phones. Later on, O'Brien joked, "This enables more people to enjoy Conan O'Brien more of the time, which I think is what this convention is all about this year."

　　But Gates' focus on consumer electronics didn't mean gaming had no place at CES in 2005. In fact, the game industry showed up in numbers greater than in recent years, and with some interesting agendas of its own.

　　The Digital Hollywood-produced Game Power Showcase and Forum, a one-day event that covered topics as diverse as The History of Games, and Casual and Downloadable Games, attracted a record crowd. In recent years, this preshow event did not draw many people, rarely filling the conference rooms in the North Hall to even 50-percent capacity. This year, almost all sessions drew large numbers, with some sessions packing standing-room only crowds into the two rooms that housed the two-track, two-session event.

　　Cody Alexander, an agent with William Morris Consulting (a division of the William Morris Agency), was a speaker on the program's Games and Hollywood session. Alexander has attended the past four CES events, but this was the first year he allocated time to speak on a Digital Hollywood session. "I was pleasantly surprised" at the turnout, Alexander told GameSpot.

　　While he views the average CES attendee as one who is "not as savvy or knowledgeable" about the game industry as a typical E3 attendee might be, his comments suggest a reason for the sudden interest in games. "People in the hardware and consumer electronics business see videogames as the next pipeline," he said. From Alexander's perspective, attending CES "is a good way to detect what's going on in the game industry."

　　Even some in the traditional game space are suddenly viewing CES with renewed interest. Los Angeles-based Square Enix USA brought 10 staffers to the show, an unprecedented number. In this instance, the decision relates to Square's forward-thinking philosophy of gaming and game platforms. "Traditionally, we have been focused on the game console," Square Enix USA president and COO Ichiro Otobe told GameSpot. "That has been our playing field. But now we are focused on networked and connected devices." Addressing the Square Enix view that consoles and handhelds are losing their position as the sole means by which games enter the consumer marketplace, Otobe said, "This show represents our next playing field."

　　He is not alone. An unusually high number of high-level industry players could be seen in both the audience and among the speakers in yesterday's conference. Executive producer Warren Wall of Electronic Arts, Ubisoft vice president of publishing Jay Cohen, Xfire founder Mike Cassidy, Firaxis founder Jeff Briggs, Xbox Live general manager Cam Ferroni, Nielsen executive Michael Dowling, general manager of Nokia's games business unit Nada Usina, and Jason Hall, senior vice president of Warner Bros. Interactive Entertainment, were among those participating in the conference. And industry analysts were out in force as well: Michael Goodman of The Yankee Group, Schelley Olhava of IDC, American Technologies' PJ McNealy, and Colin Sebastian of investment banking firm Thomas Weisel Partners were all spotted in the busy conference crowd.

　　Of course, packed crowds at a one-day conference does not provide conclusive evidence that CES has greater traction with the game industry. One top executive shrugged off his company's presence, saying, "CES is just another stop on the map," giving the show about as much stature as a quick mart on the New Jersey turnpike, used to refuel the car and load up on carbs.

　　So while the jury may still be out on the show's significance, some have already made up their mind: CES matters. "We are looking at CES very seriously, but I don't think this [view] is shared by other game companies," Otobe said.

　　However, Otobe offered hope that one day CES might offer even more compelling reasons to make the show a permanent, and serious, "stop on the map" for the game industry. Dropping a vague hint of what's to come, Otobe said, "This year we are attending just as observers. Next year, we hope to offer something more."

　　Click here for all of GameSpot's CES 2005 gaming hardware coverage.