[UPDATE 1/8]: Microsoft this morning retracted the announcement that the Halo Wars shipping date had been moved up to February 28, saying only that "There was some confusion at the Microsoft CES keynote yesterday." The game is set to be released on February 26 in the Japanese and Asian markets, February 27 in Europe, the Middle East, and Africa, and March 3 in North and South America.

　　LAS VEGAS--While the rest of Sin City was counting down to the new year, the Consumer Electronics Association was hard at working setting up for the 2009 Consumer Electronics Show. The massive expo attracted about 130,000 attendees last year, and began with former Microsoft chairman Bill Gates' 13th--and final--keynote address. The biggest game-related news out of that event was that Xbox Live had hit 10 million active users, a figure that increased by 7 million in the following 12 months.

　　This year, Microsoft CEO Steve Ballmer took over emcee duties from Gates, and once again thousands of journalists and technology glitterati gathered to hear him speak. After negotiating several layers of alternately clueless and aggressive security, the throngs packed into the Palazzo Ballroom atop the Venetian Hotel and Casino. For gamers, expectations were low, given that unconfirmed reports pegged the biggest gaming news as being new footage of Halo 3: ODST and Halo Wars, two games announced months ago.

　　However, none of that footage appeared. The middle third of the event was devoted to gaming, with Robbie Bach, head of Microsoft's entertainment and devices division, presenting. Against a backdrop of two previously released trailers for the game, Bach announced that a Halo Wars demo will be available on Xbox Live starting on February 5. As for Halo 3: ODST, the executive reminded the audience that the game is still set for a fall 2009 release.

　　Robbie Bach gets his game on. Photo credit: CNET.

　　The rest of Bach's presentation focused on the notion of "connected entertainment"--a seamlessly shared experience on televisions, phones, and PCs. After talking up the much-maligned Zune audio player, "which won over critics last year," he heaped praise on Windows Media Center, which now has 10 million active users. After trotting out the Xbox 360 stats released earlier in the week-- 28 million sold and counting--Bach said that 2008 was the best year yet for Microsoft's game division. Additionally, the company sold more consoles last year than any other year all the way back to the launch of the Xbox in 2001.

　　Bach then brought up Xbox Live's newly reached 17 million active-user milestone, and emphasized that 3 million users were added just in the past quarter. Bach said XBL users have increased their friends lists by 33 percent since the introduction of avatars in November's New Xbox Experience. As a result, there have now been more than 10 billion hours of "gaming and socializing" on the service.

　　1 vs. 100. Photo credit: CNET

　　Next it was on to the delayed Xbox Primetime feature, which is now coming this spring. The new functionality will let players gather together on XBL and share a live, real-time experience. As an example of the possibilities, Bach showed off 1 vs. 100, an Xbox Primetime trivia-based gameshow hosted by a Guy Smiley-esque avatar. Bach took on three opponents from the crowd to answer multiple-choice questions to score in-game (not Microsoft or Gamerscore) points. To emphasize the real-time nature of the event, the host engaged in real-time banter with Bach and his opponents, which included a Bill Gates doppelganger avatar.

　　Bach then attempted to demonstrate how the Netflix video streaming works on the 360, which now has the support of 45 movie studios and TV partners worldwide. After winning a battle with an uncooperative controller, he whipped out a Windows Mobile phone with an app to let players edit their Netflix queues on the go, an example of the "connected experience." As of today, over 12,000 titles from Netflix are viewable via the 360.

　　The Kodu editor in action. Photo credit: CNET.

　　The subject quickly turned to music games, with Bach declaring that "We're winning in that space" and announcing that 60 million tracks from Lips, American Idol, the Rock Band franchise, and Guitar Hero series have been downloaded on the Xbox 360. Without mentioning any names, he said that the publishers of those games have told Microsoft that 80 percent of all downloads are on the console.

　　Next up: Community games. Later this year, Microsoft will release a new utility called Kodu, based on an application designed to teach kids how to program. In its current form, the program is designed to introduce people to game design by being easy enough for a child to use. To prove his point, out came a 10-year-old-ish boy named Sparrow, who began editing a game he made with blinding speed with the 360 controller. Looking like a simplified version of such programming utilities as the Unreal Engine 3, the tool lets players tinker with wire frames, edit event timing, tweak colors, and speed up or slow down gameplay. Bach ended by saying that his division is helping "connect your entertainment experience" no matter what your age.

　　Sparrow vs. Bach. Photo credit: CNET

　　The rest of the Microsoft CES keynote had next to no game-specific announcements. After being preceded by a human beatbox battle, Ballmer then took the stage. After praising Bill Gates' charity work, he took a jab at former Yahoo CEO Jerry Yang, saying that he wouldn't be friends with him on Facebook. Then he turned serious, taking about how he believes that "our digital lives will get richer" despite the increasing number of people in the poorhouse.

　　To that end, Ballmer said that Microsoft will continue to invest in the future more than any other tech company, to take advantage of opportunity in three areas. The first is the convergence of the three screens people watch every day: the PC, the TV, and the mobile phone. Explained Ballmer, "It's no longer just about the desktop, it's about a broader vision." That vision? A seamless experience that moves from one device to the next through what Ballmer repeatedly referred to as the online "cloud."

　　How will these be brought together? Unsurprisingly, Ballmer thinks the key will be Windows--not just on PCs, but on phones as well. To that end, he fired up a clip showing off new PCs from Microsoft partners including Sony, which touted a Blu-ray-enabled laptop. (Another laptop from Samsung was curiously named the X360.) In case anyone in the audience didn't get the point, Ballmer bellowed "I am a PC, and proud of it!"

　　You want a piece of this, John Hodgman?! Photo credit: CNET

　　Then, the subject turned to Windows 7, the successor to the less-than-well-received Vista system. The beta for the system is being released today to select customers, and is opening up worldwide on Friday.

　　Although flashy and user-friendly--and very Macintosh-like--the OS did not have many bells and whistles for gamers. The new instant-networking HomeGroup feature will let people stream music and photos from their PCs to their Xbox 360s without the traditional network setup. A pop-up translation box in Internet Explorer 8 will also make scouring Japanese and European game sites for news much quicker.

　　Next it was on to Windows Live, the cross-platform connectivity service that Gates touted behind a small army of bodyguards at E3 2006. Ballmer announced a partnership with social-networking site Facebook, and a deal with Dell to make PCs with Windows Live preinstalled. He also unveiled a new long-term partnership with Verizon to allow Microsoft Live Search from any Verizon phone.

　　For more on the non-game-related details of Ballmer's speech--including a peek at some touch-screen future tech--check out GameSpot sibling site CNET.