Written by Matt Swider  on January 06, 2011

Event Coverage: We're attending CES 2011 in Las Vegas this week and so is Microsoft. Read about the highlights from the company's CES keynote right here.

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Ahead of our live coverage from the CES 2011 show floor, Microsoft had a press conference showing off the expansion of the recently launched Windows Phone 7 series of phones and demonstrating the pixel-sense technology behind Windows Surface 2.0. However, the company's keynote led with news that was most exciting to gamers, proving that Microsoft is keen on keeping Xbox 360's Kinect in the spotlight.

The Redmond-based company came to Las Vegas having sold more than 50 million Xbox 360 systems worldwide. It also touted Kinect sales of 8 million, beating its 5 million 60-day sales forecast by 3 million units.

"This has been the biggest holiday and the biggest year ever for Xbox," said Microsoft CEO Steve Ballmer. "You're going to continue to see more fun, more entertainment and more innovation from our Xbox team in 2011."



With that said, Ballmer revealed Avatar Kinect, showing off the social benefits of using the sensor while you enjoy all aspects of entertainment. We counted up to eight virtual friends chatting in 15 different environments, from a tailgating scene to a talk show set. The avatars in the video talked sports trash and reality TV episode opinions in the sports and talk show set environments, respectively.

The technology behind Avatar Kinect allows precise tracking of facial expressions, down to the smile and raise of your eyebrows. Whether or not this non-gaming avatar chat service will be fun remains to be seen. Luckily, Ballmer closed with saying that Avatar Kinect will be free for all Xbox Live Gold members.



Gold members will also be treated to a motion-controlled Zune marketplace, Netflix, Hulu Plus and ESPN. Microsoft had Ron Forbes from its Interactive Entertainment Business division show off each of these on stage. Watching a college sports game through ESPN on Xbox Live seemed especially convenient when alumni find themselves scattered all over the country.



"ESPN on Xbox Live will be carrying the BCS Championship game on Monday, January 10, Oregon vs. Auburn," Forbes plugged. "With the College Bowl Showdown, you can enhance the championship viewing experience. You can pick the winner, you can watch the game live with your friends and you can see how your perdition stacks up."



Stat-tracking may be the key to ESPN's success on Xbox Live. Currently, fans make predictions online through a computer, then move to a TV to see the results. Integrating everything through a video game console would make picking winners simpler and open it up to an audience that requires the task to be a more passive activity.

The final highlight for gamers came with the announcement of Fable Coin Golf on Windows 7 phones. Microsoft had an impressive number of launch games and Microsoft Game Studios already has hits with Crackdown 2: Project Sunburst and ilomilo. Now, the company is bringing another popular Xbox game franchise to the phone and integrating it with the Xbox 360.



Fable Coin Golf takes the environments and some of the characters from Peter Molyneux's RPG and sets them in the low-score challenge of golf. It seems like a simple enough game for Microsoft's "Xbox Live Arcade On The Go" principle. Best of all, coins earned during golf rounds can go directly to a player's Fable III character on Xbox 360.