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Microsoft, Disney Put Movies for Rent on Xbox Live

Microsoft Corp. (MSFT) said Tuesday it struck a deal to make 35 Disney (DIS) movies, such as the animated hit "Aladdin" and the action title "Armageddon," available for download on its online video game service.

The high-definition movies will be available to U.S. subscribers of Microsoft's Xbox Live, said Peter Moore, a corporate vice president in Microsoft's entertainment and devices division, which is responsible for the Xbox business.

The agreement with Disney-ABC Domestic Television will also allow Xbox 360 owners to rent films on demand as they become available from Walt Disney Pictures, Touchstone Pictures, Miramax Films and Hollywood Pictures.

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Xbox Live already offers movies and television shows from more than two dozen other content providers, the company said.

The service has more than 7 million members, a figure that will hit 10 million by June, Moore said a news conference.

He used the event on the eve of the E3 Media & Business Summit to tout the system's lineup of holiday games.

One title called "Scene it?" is a movie-trivia board game that Microsoft will sell with four simplified, large-buttoned wireless controllers.

Moore mentioned other games, including the anticipated sci-fi shooter "Halo 3" from Bungie Studios, "Mass Effect" from BioWare Corp. and "Grand Theft Auto IV" from Rockstar Games.

To go along with the Sept. 25 launch of Halo 3, Microsoft will sell a Halo-themed version of its Xbox 360 console.

Last week, Microsoft extended the warranty for Xbox 360 consoles that stop working because of a vague condition the company calls "general hardware failure." The company said it expected to spend more than $1 billion to repair broken machines.

In an interview Tuesday, Moore said he did not expect the news to dampen spirits at E3.

"I think that news is behind us. I certainly think that it is something that has been well-received by the community," Moore said, explaining that comments on message boards were resoundingly positive, with many thanking Microsoft for standing by its product.

Microsoft's Xbox 360 was released in late 2005 and leads the current generation of console wars in the United States with 5.6 million units sold, according to the NPD Group, a market research company.

Worldwide, however, 11.6 million Xbox 360s have been sold, short of the company's target of 12 million units.

Nintendo Co.'s Wii, which debuted in November, has sold 2.8 million units domestically, while the PlayStation 3 console from Sony Corp. (SNE) was ranked third with 1.4 million consoles sold in the United States since its release late last year.