to grow the WebTV® service, which now has more than 1 million subscribers who can participate in new ways with their favorite TV shows, vote in live polls, receive up-to-the-minute news coverage, and send and receive e-mail using their TV set at home.



Games

In the last few years, Microsoft has emerged as one of the top PC games publishers in the United States.  In calendar 1999, Microsoft had two of the top five best sellers: Flight Simulator and Age of Empires®.  During the 1999 holiday season, we were the only games publisher with three titles on the Top 10 list.  Building on this success, Microsoft is investing significant resources to develop Xbox™, which will compete with the Sony PlayStation and game consoles by Sega and Nintendo in a multi-billion-dollar industry.  The hardware design for Xbox is already complete, and Microsoft has 30 game titles for it under development in-house, with more in the works by third-party developers.  The fall 2001 launch of Xbox will be Microsoft’s biggest ever – larger even than Windows 95.



Wireless

Microsoft will invest substantially in the coming year to enable truly intelligent communications that fluidly traverse the boundaries of work, individual and family time, while offering ways to control the tremendous volume of available information.  Alliances are key to our wireless strategy.  For example, we are working with AT&T and British Telecommunications on mobile applications for next-generation data networks; with NTT DoCoMo of Tokyo to develop wireless portals; and with Ericsson to create end-to-end solutions and services for the wireless Internet.

One of the biggest opportunities is working with network operators and carriers to empower their service platforms with Microsoft’s existing and emerging technologies.  The building blocks of .NET will further enhance the types of services we will be able to provide.  Microsoft is developing platforms and applications for a variety of mobile handheld devices, including cellular/mobile phones, Pocket PCs and smart phones.  These devices will offer both voice and rich data capabilities, including true HTML Web browsing on color displays.  Our research in smart cards, location-based services, and speech technologies will also have important applications in the wireless arena. 



Small Business

A great opportunity exists for Microsoft to help small businesses increase productivity and take advantage of the Internet to connect in new ways with customers, industry partners, and suppliers.  Today, small businesses represent nearly 60 percent of the global economy.  Yet their investments in software are far smaller per desktop than larger enterprises, even as they are being increasingly impacted by the digital economy.

The emergence of the Internet and .NET services will make technology more accessible and relevant to small businesses than ever before.  By providing complete business solutions that include productivity, customer management and collaboration software, as well as technologies to power the specific needs of small-business operations and e-commerce, Microsoft can enable small businesses to better use technology to their business