The announcements came Wednesday at Microsoft's annual X06 event, held in Barcelona, Spain. There is no word of financial terms and it is not disclosed if Microsoft will invest in Jackson's company. Microsoft said the Xbox360 peripheral player will go on sale in the U.S. in mid-November for $199.99, and it will come with a HD-DVD version of Jackson's film "King Kong." This is a corporate strategy geared directly to compete with Sony and even Nintendo as they release their new consoles. Xbox 360 has more than 5 million units sold and the company said it is on track to sell 10 million by the end of the year.

Sony's PlayStation 3 launches in November, but the Street is criticizing it as late and not as good. The PS2's market share was roughly 70% of the global console market, and with the launch of Nintendo's new Wii around the same time and with the Xbox360 price cut and some exclusives, the prospects of Sony maintaining such an outright dominance are being questioned .

Part of the key to Sony's success has been having exclusive deals with game makers such as Take-Two Interactive Software (NASDAQ: TTWO), but that is not the case this go-round. Microsoft today announced Take Two will offer Xbox 360 players of "GTA 4" two exclusive, downloadable episodic add-ons within months of the game's release. Take Two confirmed the upcoming title "Bioshock," which wowed critics earlier this year at E3, would be console-exclusive to the 360.

id Software and Microsoft announced a downloadable Doom title for the Xbox Live Marketplace that is actually a port of Ultimate Doom, including that game's fourth episode, "Thy Flesh Consumed."

This downloading of games is something we will have to monitor very closely for the investing community that trades video game stocks and the peripherals around it. If studios can start selling downloads direct, it could have major implications for retailers such as GameStop (GME), Best Buy (BBY), and even Amazon.com (AMZN). That is not to mean it is a threat yet, but it is something the retailers need to agree upon with publishers. These games would be nothing if it was not for the sales efforts of the retailing chains that depend on these sales, so you would think the retailers would secure their future with game publishers. I personally have a strategy for the stores to fight this if the publishers try to go around them, but this is still a ways out. GameStop (GME) is by far the most leveraged retailer for video games, and I have been out on the name twice recently. On GameStop (GME), Here is what Cramer said in August and here is what I had said a few days before when the shares were $44.46 on the way down.

Electronic Arts (ERTS) has showcased the following for Xbox360: FIFA 07, Need for Speed(TM) Carbon, Tiger Woods PGA TOUR® 07, NBA LIVE 07, NHL(TM)07, Half Life 2 and SUPERMAN RETURNS(TM): THE VIDEOGAME.

Here is the full release from X06 for you to peruse, but it looks like 2006 and 2007 are going to be good Xbox years.

Jon Ogg is a partner in 24/7 Wall St. and can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.