Just one month after signing a deal to stream live programming via the Xbox 360 in the UK and Ireland, Microsoft has struck a similar deal for customers in France.

Canal+ has signed with the console maker to offer more than 3,000 live and on-demand films, sports and television programming to users of the system. The two companies plan to incorporate more programming and expand the partnership to other Microsoft devices in the future.

It was just last month that Microsoft and Sky TV unveiled a similar partnership, letting Xbox Live subscribers in the UK and Ireland gain access to Sky's Sky Player service without a set top box. One of the appeals of this sort of programming is being able to watch sporting content with online friends and chat in live time during the game.

For now, U.S. Xbox Live subscribers cannot access live programming, though they are able to stream films on-demand from Netflix. However, today’s agreement (as well as the Sky TV deal) suggests that the company is continuing to work on a way to enable more streaming programming for domestic audiences as well.

It’s all part of the company’s plan to make the Xbox 360 the entertainment hub of the living room. Both Microsoft and Sony have made no bones about their desire to displace other set top boxes as space becomes more limited in people’s homes.

The firesale at Midway Games may have hit a hurdle. Lawrence Kasanoff, through his company Threshold Entertainment, has sued Midway saying it owns intellectual property rights in the “Mortal Kombat” franchise, which is the video game publisher’s largest property.

he suit could affect Warner Bros.’ $33 million bid for select Midway assets (including “Mortal Kombat”), as rights to the franchise will need to be determined before a sale can take place. Threshold also wants to retain the film rights to the franchise.

The complaint, filed Wednesday in U.S. bankruptcy court, alleges the film adaptations of the game, rather than the game itself, gave the “Mortal Kombat” universe its mythology.

Launched in 1992, “Mortal Kombat” wasn’t the first fighter game the industry had seen, but it was the first to really capture the public’s attention. Not all of the attention was good, though, as parents groups and others objected to the game’s violent finishing moves. 

Nonetheless, it was deemed big enough to make a film adaptation in 1995.

Threshold alleges his contributions to the franchise were what made it into more than a run-of-the-mill video game.

"The 'Mortal Kombat' franchise, as it stands today, is far more a creation of Threshold and Kasanoff than of Midway," says the court filing. “ Midway's creative input was almost entirely limited to the videogames. On their own, the videogames provided only minimal back-story and mythology, and only flat, 'stock' characters. ... Kasanoff and Threshold were responsible for virtually all of the creative input that went into turning the videogame concept into a multimedia enterprise.”

Threshold produced two “Mortal Kombat” films (along with their soundtracks) in 1995 and 1997. It has also produced an animated series and owns the mortalkombat.com web site.

Warner’s bid for assets is scheduled to go before a bankruptcy judge in Delaware on July 1.

GamePolitics has a copy of the filing here for those interested in giving it a thorough read.

Xbox 360 and PlayStation 3 owners have been able to purchase and stream movies from their game machines for years. Now Wii owners in Japan are seeing media center functionality as well.

The company has partnered with Sonic’s CinemaNow division to provide content from its 14,000 title collection. (That collection includes feature films, concerts and shorts for rent of purchase.) The service will be called “Everyone’s Theater Wii”.

It’s important to note once again that this service will be available in Japan only. But it’s noteworthy as this is Nintendo’s first real step at acknowledging that customers want more than just games from their game systems.

No U.S. integration has been announced, but today’s announcement is likely to fire up the rumor mill once again. (Netflix is the most-mentioned candidate for a U.S. streaming partner. Word came yesterday of a user survey soliciting feedback on demand for streaming video on the Wii.)

Netflix, of course, already has a game machine partnership with Microsoft for the Xbox.

(Thanks Gizmodo for the heads up about the press release.)

It has been a day of big surprises and big moves in the video game industry.

Two major publishers have realigned their organizations to adapt to the economy, but the news that still has jaws agape is the acquisition of “Doom” and “Quake” developer id Software by ZeniMax Media, which also owns of Bethesda Softworks (makers of the widely respected “Elder Scrolls” and “Fallout 3” role-playing games).

id, for years, has been the poster child for independent game developers. Founded in 1991, it is the company that literally invented the first person shooter (with 1992’s “Wolfenstein 3D”). And the graphics engines created by co-founder and technology head John Carmack have powered countless titles in the industry.

The popularity of the genre Carmack and id created may ultimately have been the reason the company decided to seek a buyer. Because id focuses on development, it has historically partnered with publishers such as Activision and Electronic Arts to distribute its games.

Over the years, though, those studios have built internal teams that focus on the action genre – and publishers make a lot more money on internally created games than they do on ones from development partners.

Neither Electronic Arts nor THQ have particularly enjoyed the past year. EA has seen share prices plummet and several new game franchises either flounder or walk into a wall of controversy. THQ, meanwhile, was pretty much off the radar entirely until the recent release of “Red Faction: Guerrilla”.

Both companies took some dramatic steps today in an attempt to get back on track.

EA merged developers BioWare and Mythic into a single team, which will focus on role playing games and massively multiplayer online titles. Mythic is responsible for the company’s “Warhammer Online,” while BioWare has developed “Mass Effect” and the upcoming “Star Wars: The Old Republic”.

The move is a big show of confidence in BioWare’s leadership. Ray Muzyka, formerly joint CEO of the company, will oversee the merged division, while BioWare co-founder and joint CEO Greg Zeschuk will become Group Creative Officer. (Mythic founder Mark Jacobs has left the company.)

Looking back, we might all come to remember 2006 as the year everything changed in the video game industry. That’s when the Wii and the PS3 hit store shelves and software sales, which were already strong, began to explode.

Now, a new report from Global Industry Analysts predicts the video game industry will see global software sales hit $91.96 billion by the year 2015. It’s a bold claim, which would require the numbers to nearly double over the next six years. (Global software sales are estimated in the $50 billion range currently. The precise number is difficult to nail down because there is no central repository of data.)

Global Industry Analysts says the expansion will be fueled by “continuous technology developments, upgradation of gaming platforms, rising broadband penetration, and increasing uptake of massively multiplayer online games and wireless gaming.”

All are fair points. With the increase in broadband penetration, you’re likely to see more people sampling massively multiplayer online (MMO) games. That means more people shelling out $15 per month to play, which will drive revenues. And the intrusion of the iPhone onto the mobile gaming scene is opening up that field for people who swore they would never play games on their phone.

Additionally, the Asia-Pacific and Latin American markets are beginning to open up, which publishers and console makers are counting on to offset any possible loss in traditional markets.

The study notes that while PC and console markets are faltering a bit, due to the recession, online and wireless are continuing to expand. (This is, in part, why you’re seeing certain publishers rush towards MMOs right now. Even a moderately sized loyal audience can make a game a big financial winner.)

Right now, according to the report, the United States and Europe account for more than half of the world’s video games software market. Asia-Pacific is expected to spearhead growth, though, especially in online game.

In the U.S., the introduction of new consoles has had a dramatic effect. The NPD Group says domestic game sales in 2006 were $7.4 billion. In 2007, they jumped to $9.5 billion – and were up to $11.7 billion in 2008.

They’re tracking a bit lower so far this year, but the back half of 2009 is loaded with top-tier games that could let the industry reclaim its ‘recession resistant’ label and once again show sales growth.

Oh Steve Ballmer… You certainly enjoy stirring up the enthusiast press, don’t you?

If you missed the tempest in a teapot earlier today, there was a lot of excitement when Microsoft’s CEO, speaking at the Executive’s Club of Chicago, reportedly told attendees that a new Xbox 360 would be arriving in 2010.

In a word: Balderdash.

Ballmer is a master of hype and sometimes lets his enthusiasm run away with him. That seems to be the case here.

Microsoft gaming officials have made it clear that “Project Natal” will launch with a lot of fanfare. And the dramatic changes the motion-sensing controller will bring to the system are, in some ways, the next generation of Xbox. But that doesn’t mean we’re going to see a new Xbox hardware unit.

The only likely exception to this would be a revamped 360 that costs Microsoft less to produce. (Akin to the heavily speculated slim PlayStation 3 – same machine, different form factor.)

Oh, and that ‘confirmation’ of a 2010 launch date? More balderdash. Microsoft officials at E3 were adamant that Natal would not launch until there was a critical mass of software to support it.

That may well be in 2010 – but since developers have only had the tools to create Natal-based games for two weeks now, it’s not set in stone.

Ballmer’s enthusiastic, but he knows better than to launch a monumentally expensive hardware product without software support.

Here’s the official word from Larry Hryb, Xbox Live’s Director of Programming:

“A few people have emailed me regarding something Steve Ballmer said earlier today about a new Xbox coming in 2010. As the Xbox team stated at E3 two weeks ago, we are not even halfway through the current console generation lifecycle and believe Xbox 360 will be the entertainment center in the home for long into the next decade.  Project Natal will be an important part of this platform, but we have not confirmed a launch date at this time.”

The Game Critics Awards are the biggest prize at E3. Selected by a panel of judges from 29 respected publications, they are the bragging right every publisher strives for.

Judges have unprecedented access to games at the show, getting hands-on time with titles that other people might only see demos of – or sometimes just a trailer. It’s a sweet gig (and I say that as someone who served as a judge for several years).

Bragging rights aside, though, how much impact does a Game Critics Award carry?

While the world has been waiting for a major studio to jump deeper into the video game space, no one has given the telecom sector much thought. Maybe they should have.

Verizon has launched a summer promotion in New York, Massachusetts and Rhode Island, giving customers of its broadband and FiOS Internet service access to more than 1,400 games for $9.99. (Customers in other states will still pay $14.99.)

Turns out this isn't a new service, as we initially reported. It's just a promotion for an existing one that hasn't received a lot of publicity. Still, Verizon's increased visibility in gaming is worthy of investigation.

Customers can either play the game via their Verizon Internet connection or download a title to their laptop and take it on the road (though you’ll have to be connected to the Internet to play, presumably to authenticate the license).

If the concept sounds familiar, that’s because Time Warner gave it a whirl a couple of years ago with GameTap. (Full disclosure: I was one of the people who helped with the initial planning of GameTap, during my days at CNN.) Subscribers had access to a wide variety of games for a monthly subscription fee. Time Warner sold GameTap in Sept. 2008 to Metaboli, a European digital distribution service provider. The service is still available today.

There are some key differences, though.

We saw and heard a lot about motion sensor controls at last week’s E3, but it was Microsoft’s “Project Natal” that caught the eye of Disney Interactive.

“Project Natal has the most long-term potential, in my opinion,” Graham Hopper, the head of Disney’s gaming unit, told me during a chat at E3. “We’re interested to see what software will be developed with it – and we’re going to be working hard to figure that out ourselves.”

Hopper said he sees the full-body interface and voice recognition capabilities of Natal as something that will change the face of gaming.

It’s ironic, when you think back to the last generation, when a system was often judged solely on the quality of its graphics. They’re still a factor today. (Let’s face it, the Atari 2600 would flop if it hit the market now, no matter how great the games were.) But they’re perhaps the third most important factor in today’s game machines.

“I think it’s interesting how everyone thought the basis of competition was going to be graphics,” says Hopper. “It turned out to be two other things: The first is online connectivity; the other is human interface.

“These illustrate where the industry is going. … It sounds like little things, but it adds up quickly.”

Disney Interactive, historically, has been known for games targeted at children. And this year’s lineup was no exception, with new “Hannah Montana” and “Wizards of Waverly Place” titles on display.

A few years ago, though, the company began dipping its toes in the core gamer waters. This year, alongside the younger-skewing games were “Split/Second,” an action racer that’s heavy on the pyrotechnics and “Pirates of the Caribbean: Armada of the Damned” an action/role-playing game set before the film series.

“As a company, the experiences we create appeal to everyone,” said Hopper. “I don’t see any reason we can’t serve core gamers with content they love.”

As gaming companies get more affordable, there has been a lot of chatter on Wall Street about major media companies buying out existing game publishers. Disney, in particular, was rumored to be sniffing around Electronic Arts last November.

So far, nothing has come of that – and Hopper indicates that we shouldn’t hold our breath for any major announcements.

“We’re going to be very selective,” he said. “I don’t feel we need an acquisition to grow.”

That headline up there is a question I hear all the time.

No matter how big the gaming industry’s revenues get; no matter how much a hit title becomes part of the pop culture lexicon, people (often non-gamers or people from large media companies) want to know when gaming will be accepted as a mainstream form of entertainment.

My answer is always the same. As Baby Boomers get older and Generation X begins taking over the boardrooms and governments, you’ll see attitudes toward video games begin to shift. And that shift may be starting to take place now.

Kotaku has a nice write up of a luncheon hosted by Mike Gallagher, president of the Entertainment Software Association, which lobbies for the video game industry in Washington and is the parent company of E3.

Gallagher talks about his perception of President Obama’s attitude toward gaming (generally positive), but the story’s most interesting nugget was a throwaway sentence at the very end of the story.

"For the first time we have a console in the White House," says Gallagher. "We understand the president has a Wii and we're very excited about that. Having a degree of exposure to the technology is very, very positive."

Ain’t that the truth? Obama may or may not be a gamer himself, but we’re creeping up on an era when the leader of the free world spent parts of his childhood dropping quarters in a Pac Man machine and has played at least a few levels of “Grand Theft Auto”. 

And that, I believe, is when we’ll see gaming acknowledged as an entertainment medium far and wide, instead of a slightly estranged cousin.

While Paul McCartney, Ringo Starr and Steven Spielberg turned a lot of heads at Microsoft’s E3 press conference, the name on everyone’s lips as they walked out of the Galen Center was Milo.

Was the star of Peter Molyneux’s Project Natal tech demo pre-rendered? Did the technology work as well as it seemed to in the video he showed? Or were we being subjected once again to Molyneux’s infectious enthusiasm for a project that doesn’t quite live up to our expectations?

During E3, I was able to spend a little time with Milo and see the little guy in action.

A couple of weeks ago, we posted word that recent Atari acquisition Cryptic Studios was working on breathing life into several Atari legacy titles. Now we’ve got a few more details to share.

Sources tell us that the developer is working on a massively multiplayer online (MMO) version of “Neverwinter Nights” with an eyed 2011 release.

Details about the project are unavailable, naturally, as it is an unannounced title. But this reportedly was the primary reason Atari was interested in acquiring Cryptic late last year. (The developer is currently working on “Champions Online” and “Star Trek Online”.)

Based on the third edition Dungeon and Dragons rules, “NWN” is a well-loved franchise. The first installment of the role-playing game was developed by fan-favorite Bioware in 2002. A sequel, developed by Obsidian Entertainment, came out in 2006 to slightly less favorable, but still solid, reviews.

Part of what made the game unique was its robust multiplayer component. Many players built persistent worlds, capable of hosting up to 75 players – in essence, mini MMOs of their own.

The new game represents a very big bet for Atari – perhaps as big as the company’s continued existence.

We’ll have lots of wrap up coverage of E3 next week, looking at how video games and the mainstream entertainment world are moving closer and closer to convergence. To tide you over until then, here are a few random musings and interesting notes from this year’s show.

For gaming companies, the introduction of this new control device could very easily extend the life cycle of this generation considerably. (And, given the escalating cost of developing a game, which also keeps retail prices high, that’s good news for everyone.)

A lot has been written about Microsoft's new motion sensing technology "Project Natal," but it's hard to capture the essence of the product with words. 

And then there were three…

Sony today joined the motion sensing controller club, unveiling the PlayStation Motion Controller, a new controller that works in concert with a video camera that it says it plans to launch in the spring of 2010.

It’s a controller that has a lot more in common with Nintendo than Microsoft’s “Project Natal”. A remote works in conjunction with the Sony EyeToy to reflect onscreen movement.

But where Nintendo is chasing the casual audience, Sony has its eye on the hardcore. The company showed several tech demos, including using the controller in a first person shooter context and as a mace, which takes out advancing demons with a swing.

Sony and Microsoft are both offering more advanced devices than the Wii, even when you take the Wii’s forthcoming WiiMotion Plus add on into account. But both are at least a year away from being available – and neither company has the current installed base of the Wii. The Wii, though, lacks the graphical power of the Xbox 360 or PS3. 

Should be an interesting fight when the three start slugging it out.

Ubisoft has added another pair of Hollywood heavyweights to its partner list.

The company, which is currently working with director James Cameron on the gaming tie-in with “Avatar,” announced today it would be working with Steven Spielberg and Kathleen Kennedy of the upcoming “Tintin”. The publisher also will re-team with Peter Jackson, who it worked together with on 2005’s “King Kong”.

“We can create good games, but we are still very junior at creating movies, so why not join forces with the best of the best to make our visions come to life?,” said Yves Guillemot, president and CEO of Ubisoft.

Ubisoft has been beefing up its Hollywood presence significantly in recent years. The company acquired special effects house Hybride Technologies last year. The company also owns a computer animation studio in Montreal called Ubisoft Digital Arts.

Microsoft’s motion sensing controller is real.

The company unveiled Project Natal, a new motion-sensing camera that allows players to control on screen action without any handheld controller at its pre-E3 press conference. It did not, however, give any hint about when the device would be released.

Microsoft says Natal (an internal code name and not the final name of the product) will capture full body motion, in essence reflecting any movement you make on your screen. It will also recognize user’s voices, allowing you to talk with onscreen characters or, if the trailer was to be believed, answer questions in a trivia game vocally, instead of making choosing from pre-selected answers.

“The controller will continue to evolve, but here’s the problem: For far too many people, the controller is a barrier, separating video game players from everyone else,” said Don Mattrick, corporate vice president at Microsoft. “We asked ourselves: Can we go beyond the controller? Can we make you the controller?”

Natal uses hand swipes to navigate the Xbox Live dashboard, much like like Tom Cruise made in the film “Minority Report”. Microsoft showed several live demonstrations of tech demos, all of which seemed a bit rudimentary.

One had an employee trying to break bricks with a series of rubber balls (that came rocketing back at her). Another was a Jackson Pollock-inspired painting demo.

The most intriguing demo was called “Project Milo”. Shown on video – not live – it demonstrated a realistic-looking boy who spoke and played with the player.

“What we want to create is a connection to our world – and that’s what I believe Natal does,” said Peter Molyneux, president of Lionhead Studios, which made the demo. “It will change the landscape of games we play.”

I’m expecting to get some hands-on time with Milo before the show is over. I’ll post impressions after I’ve digested it.

Whenever it comes out, Project Natal will work with all existing and future Xbox 360s.

“We can leap into a new era of interactive entertainment without having to launch a new console,” said Mattrick.

Among the fans of Project Natal is director Steven Spielberg, who first saw the peripheral two months ago and came out to endorse the project.

“Despite the size of the industry, 60 percent of households do not have a video game console,” he said. “Don and I have always agreed that the way to bring games to everybody is to make the technology invisible.

“I think what Microsoft is doing is not about reinventing the wheel, it’s about no wheel at all.”

It’s definitely interesting – but Natal seems a long way from being ready for prime time based on the demos shown today.

Microsoft took pains to further position the Xbox 360 as an entertainment hub at its pre-E3 press conference today.

The company announced several new partnerships with Facebook, Twitter and last.fm – all set to begin this fall. It also announced plans to beef up the quality of its video content, with all HD movies and television shows in its 18,000 title collection being made available in 1008p this fall.

Additionally, it will no longer require users to download a film before they can begin watching. A new “instant on” feature will allow purchases to begin playing immediately.

Microsoft also plans to extend the number of countries it offers the content in from eight to 18.

The changes will take place as Microsoft begins integrating that portion of Xbox Live with the upcoming Zune HD. 

Microsoft and Sony have been competing for film and movies fans as fiercely as they have been for gamers this generation. Both companies believe the key to becoming an indispensible part of the living room is to appeal to all members of the family, including the ones they can't convert into gamers.  

Also this fall, Facebook and Twitter users will be able to update their status via the Xbox 360, as well as track friends’s updates, photos, etc. Players will also be able to instantly post screenshots from games they are playing starting with the release of the new “Tiger Woods”. The other features will go live this fall.

The last.fm partnership, which will also go live this fall (sensing the trend?), will be another part of the integration with Microsoft’s Zune HD. The service will let users stream music through their Xbox and will be free to Xbox Live gold subscribers.

As we prepare for the E3 madness to begin, there are some interesting nuggets of information floating about. None are necessarily long enough to warrant their own entry, so here, in easy to digest bullet points, are the whispers we’re currently hearing.

• Hope “God of War 3” isn’t on your holiday wish list. Despite widespread assumptions that the game is due this year, word now is that it has been pushed to 2010 (as has the next “Gran Turismo”). We may get official confirmation of this tomorrow at Sony’s press conference. 
• Microsoft’s press event later today will be star-filled. Tony Hawk will be there to demo (big shock here) “Tony Hawk Ride”. The big news is Microsoft’s surprise guest who will kick off the conference. I don’t want to ruin the surprise, but I will say the guest musical in nature – and is likely to “Help!” demo a hotly anticipated game from Harmonix. 
  • Update. Yep, they showed up. Paul McCartney, Ringo Starr, Yoko Ono and Olivia Harrison reunited on stage to promote “The Beatles: Rock Band” - but they didn't play the game. “The game is good. The graphics are very good. And we were great!,” joked Starr. “Who would have ever thought we’d end up as androids?” added McCartney  
• From Joystiq comes word that the DLC for “Batman: Arkham Asylum” that will allow PS3 owners to play as the Joker will be free. That’s a nice incentive for players and could give the PS3 version the upper hand when the game comes out later this year. 
• “Starcraft 2” is reportedly looking great – and will be on shelves this year. Activision showed the game to analysts last night, who walked away impressed. Blizzard announced that it hopes to ship the game in calendar 2009, which should be a huge boost to Activision’s bottom line. The beta kicks off this summer.