Microsoft Chairman and Chief Software Architect Bill Gates opened the 2002 Consumer Electronics Show (CES) Monday night with a keynote address that touched on the company's upcoming digital-media-integration products and services. Chief among these offerings are Freestyle, a set of technologies for bridging the gap between the PC and the living room, and Mira, a networking technology for extending the reach of Windows XP-based PCs to connected devices in the home. But Gates also found time to tout recent advances for XP, the Xbox video game, and MSN, touched off with some trademark self-deprecating humor.

"I spent the holidays losing at Xbox to my nieces and nephews," Gates said. "I never envisioned that I would ever create the ultimate machine to humiliate myself."

Humor aside, Gates provided plenty of statistics. XP has sold more than 17 million copies, including both retail and PC bundles, he said,  since becoming widely available a little more than 2 months ago. That number is 200 percent greater than Windows Me sales after a similar period of time and more than 200 percent greater than Windows 98. The Xbox launch was equally successful, with more than 1.5 million units sold since mid-November. Gates also noted that the average Xbox owner purchased more than three games--a video-gaming record. "We sold all of the Xboxes we could make," Gates said. Meanwhile, the company's MSN eShopping properties also experienced a record holiday season, with a 56 percent increase in sales, year-over-year.

The Freestyle and Mira demonstrations were impressive. Gates said that in the months ahead these technologies will extend Windows into new areas and enable a wide range of opportunities for the company's hardware partners. A Freestyle and Mira video showed how an average family can use these technologies to tote a wireless-enabled smart flat-panel display around the home and still interact with the desktop PC in the home office using a touch screen and stylus. "The Freestyle technologies enable a distance UI that lets you step away from the PC and take advantage of the PC's social functions," said Steve Guggenheimer, Microsoft's senior director of Business Management, during a keynote demonstration.