Developer Kit and Camera Back Xbox

To maintain interest in the Xbox 360 and Windows games through the 2006 holiday season, when competitors Nintendo and Sony will both release new game consoles, Microsoft will release an inexpensive game development kit for hobbyists and several new peripherals, including a video camera for communicating over the Xbox Live network.

XNA Game Studio Express

Game royalties are the main source of revenue for console makers, which usually lose money or earn a slight profit on the hardware. Because of this, console makers exercise tight control over game development, limiting the distribution of development kits and requiring developers to sign strict licensing and revenue-sharing agreements. With the release of XNA Game Studio Express, Microsoft takes a first step toward loosening these restrictions, reasoning that wider development could spur more interest in the Xbox 360 platform, just as open APIs and inexpensive developer tools spurred a groundswell of third-party support for Windows more than a decade ago.