Microsoft announced a new partnership with nonprofit organization Companions in Courage Foundation to provide fun, interactive entertainment for children by supplying hundreds of Xbox 360 game kiosks to playrooms in children's hospitals across the United States.

Gaming performance is strongly influenced by video drivers and gamers will likely see improvements after installing SP1 if they had not yet installed previously released updates that address issues regarding virtual memory space and multi-GPU systems. Windows Vista SP1 also includes an updated DirectX runtime which supports all current DirectX 9 and 10 hardware, as well as new 10.1 class hardware. All Direct3D 10.1 class video cards fully support Direct3D 10 features in addition to new capabilities, and games that use Direct3D 10 will work on both 10 and 10.1 class hardware.

Despite rumors and rumblings that Microsoft has been in talks with Sony to add Blu-ray support to the Xbox 360, with even Microsoft CEO Steve Ballmer recently stating it will support Sony's standard, it may all be just smoke and mirrors. In a recent interview Group Marketing Manager for Xbox Aaron Greenberg made it clear "Xbox is not currently in talks with Sony or the Blu-ray Association to integrate Blu-ray" and may instead be putting its focus on "digital distribution of entertainment content."

Microsoft announced it is lowering the estimated retail price for its Xbox 360 family of consoles in Europe. From Friday, 14th March the X360 will retail at an entry-level of £159.99 for the Arcade version, £199.99 for the standard edition, while the Xbox 360 Elite will have an ERP of £259.99.

During a Q&A session at the Mix 2008 web developers event, Microsoft Chief Executive Steve Ballmer revealed that the software giant plans to support Sony's Blu-ray HD disk format now that Toshiba's HD-DVD has thrown in the towel. Steve Ballmer said, "... as the industry moves forward, obviously we're going to support Blu-ray in ways that are important. I want to make sure there's the right support. We've already been working on, for example, in Windows device driver support for Blu-ray drives and the like."

Revealed on the official Xbox.com web site earlier today, but quickly removed, Microsoft is will be organizing a new Grand Theft Auto IV sweepstakes, offering four trips to NYC to attend the GTA IV launch party for Rockstar Games' upcoming open world action game. The next 100 lucky winners all get a prize package which includes a custom Xbox 360 Elite console. Schedule to start today, running until April 15, winners announced on April 23 (thanks FiringSquad).

The writing was on the wall, as Microsoft officially announced that it "will no longer manufacture new HD DVD players for the Xbox 360, but we will continue to provide standard product and warranty support for all Xbox 360 HD DVD Players in the market. "

Today at the Game Developers Conference, Microsoft announced that Gears of War 2 will be coming to the Xbox 360 this November. Peter Molyneux revealed some of Fable 2's multiplayer features, and Tomonobu Itagaki was on hand to discuss Ninja Gaiden II's game-sharing features.

While both Microsoft and Epic Games are currently attending the Game Developers Conference 2008, GamePro is speculating that the Windows giant might be looking to acquire the Gears of War/Unreal Tournament developers for aprox $1 billion, mainly out of interest for its Unreal Engine 3. While it is pure speculation at this point, Microsoft is having its briefing Wednesday morning, where it is expected to make several announcements, and Epic on Thursday afternoon. Acquisition? Gears of War 2? New Xbox 360 version? Blu ray ? We'll find out soon?

UPDATE: Not exactly denying it, Epic's Mark Rein responded saying that if GamePro wants to speculate, they should start at $2 billion, Epic isn't that cheap.

“We do not believe the recent reports about HD DVD will have any material impact on the Xbox 360 platform or our position in the marketplace. As we’ve long stated, we believe it is games that sell consoles and Xbox 360 continues to have the largest next-gen games library with the most exclusives and best selling games in the industry. We will wait until we hear from Toshiba before announcing any specific plans around the Xbox 360 HD DVD player."

Xbox 360 enthusiasts everywhere can get VIP access to this year’s Game Developers Conference from the comfort of their living room starting Feb. 20, 2008. Microsoft is bringing GDC home by allowing fans to download breaking Xbox 360 news directly from the event to their TV.

Last week Microsoft sent shockwaves through the internet by offering to buy ailing Yahoo for no less than $44 billion. After a few days of deliberation, even considering outsourcing its ads business to rival Google, Yahoo will turn down the offer, claiming the unsolicited offer undervalues the company, saying it needs an extra $12 billion.

Looks like Bill Gates might want to go out with a bang as Microsoft announced that it has offered to acquire Yahoo for $31 per share, 62 % above the current trading price on Wall Street, making for a total of $44.6 billion in cash and stock.

Logitech shares surged 12 % today amid speculation that Microsoft might be preparing to acquired the Swiss-based computer peripherals maker. While neither party gave any comment on the rumor, Logitech co-founder Daniel Borel, the biggest shareholder, said he was not interested in selling, but with only 6% of the shares he would neither be able nor prevent a sale of the company.

Microsoft and the U.S. Army announced that U.S. gamers will have a chance to prove their skills in the first ever Halo 3 Championship Tournament, hosted exclusively on Xbox Live. Registration will begin in March, and the actual tournament kicks off in April 2008, preceded by Basic Combat Training exercises.

The holidays are traditionally a good time for hardware/software sales, and with the Wii still in short supply, it was up to the PS3 and X360 to pick up the slack. Today, Microsoft revealed that it has sold more than 17.7 million X360 units worldwide, while Halo 3 breaks records with no less than 8.1 million copies sold since its Sept. 2007 launch. In little over a month, Mass Effect has already sold 1.6 mill. units, and according to November NPD data, consumers keep spending money on Xbox software and accessories, with a record-high attach rate of 6.9.

Microsoft released the X360 HD DVD Emulator, enabling film studios and disc authoring companies to test the behavior of HD DVD disc content, including encoded video and HDi interactivity, in a virtual environment before committing to burning a single HD DVD disc.

After being lauded by Time Magazine yesterday, MCV's annual independent retailer survey reveals that UK stores pick Halo 3 as the best single moment in 2007, while Microsoft was voted the best in terms of overall quality and attitude throughout the year. To complete the hat trick, 49% of the UK retailers think Xbox 360 will win the next-gen battle.

As promised Microsoft has rolled out its fall dashboard update, adding new features such as Xbox Live members being able to check out the friends lists of fellow Xbox Live members, chat and compare games and Achievements, utilize the family timer, Xbox Live Arcade Hits and new video features with DivX/Xvid support.

Timed with the Xbox LIVE Fall Update, Arcade Hits can be found within the Xbox LIVE Arcade section of the new Game Store, making it easier than ever to build a library of great downloadable games, and offering some of the best-selling Xbox LIVE Arcade games at permanently reduced prices.

Earlier, Microsoft revealed that with the Dec. 4th fall dashboard update, Xbox Live members would be able to check out the friends lists of fellow Xbox Live members, chat and compare games and Achievements, as well as utilize the family timer. Today more details were revealed, such as Xbox Live Arcade Hits and new video features (we can confirm this includes DivX/Xvid).

Announced way back in 2003, Microsoft Train Simulator 2 provides the opportunity to command a 200-ton modern diesel locomotive or operate a steam-breathing behemoth from the past.

On Nov. 15, Microsoft will celebrate the fifth anniversary of Xbox Live, and as a gesture of thanks, all 8 million members will have a 48 hour opportunity to download a free Xbox Live Arcade game, while every active member who joined the service in 2002 will receive 500 free Microsoft Points. On top of that Microsoft also confirmed the Xbox download rumor from earlier today.

The latest 1upYours podcast has stirred up a lot of ruckus over the weekend after EGM's Shane Bettenhausen revealed that he has fairly reliable information that next week, Microsoft might announce the cancellation of a big first-party title. Speculations include Alan Wake, Banjo Kazooie 3, Fable 2 or Too Human. Remedy and Lionhead have already responded and said it is not their respective titles, so Too Human (which is currently over budget, overdue and in a lawsuit with Epic) or Rare's Banjo 3 (no news in a long time) are currently the prime candidates ....

As the Nov. 20 launch date for Bioware's sci-fi action-RPG Mass Effect draws nigh, Microsoft teams up with Sci-Fi TV channel for a 30-minute 'Sci vs. Fi: Mass Effect' special, sweepstakes, as well as premiering the two-hour extended episode of Battlestar Galactica: Razor in select movie theaters. A new micro-site was launched, and a soundtrack is now available for pre-order.