Video: watch Tech & Web Editor Holden Frith's report from the Consumer Electronics Show

Video: Microsoft boss wheels out Clinton, Obama and Bono for spoof film

Predicting the future: Bill Gates's hits and misses

Bill Gates has heralded the arrival of the world's “second digital decade”, predicting that within a few years technology will be in every room in the home, from screens to wall projections and even built into desks or tables.

The founder of MIcrosoft predicted that devices will become easier to use, controlled by voice and gesture instead of mouse and keyboard.

“The first digital decade has been a great success,” Mr Gates told the Consumer Electronics Show, the vast technology fair in Las Vegas that opens today.

“This is just the beginning. There is nothing holding us back from going much faster and further in the second digital decade."

Mr Gates livened up his speech by playing a spoof home video, and by challenging Robbie Bach, the head of Microsoft's entertainment and devices division, to a match of Guitar Hero, a video music game which is supposed to mimic the sensation of being a rock star.

The two corporate heavyweights were joined on stage by real life guitar rockers Slash and Kelly "Tipper Queen" Law-Yone, who played a set.

Giving his speech, the Microsoft boss said that there were more than a billion personal computers in use in the world and more than 40 percent of people on the planet have mobile telephones.

He added that the new digital decade will be increasingly “user-centric” and the trend is for media and entertainment to be software driven.

“The second digital decade will be more focused on connecting people,” said the Microsoft chairman. “Those applications will run on the Internet, in the cloud as we say, and use the best of software services."

The comment came as an admission that the market is moving away from Microsoft’s longtime core money-maker, packaged software that people install on their own machines.

Microsoft has used the conference to announce of a series of media partnerships, including one with BT that will result in British Xbox 360 owners being the first in the world to receive internet-based TV services through their games consoles.

Perhaps with one eye on Sony’s rival PlayStation 3, which doubles as a high-definition Blu-ray disc player, Microsoft also announced a an expanded range of high-definition content available on Xbox Live, the online network of Xbox 360 consoles. Deals with MGM Studios, Disney and ABC will bring their films and TV programmes to the network.

“Xbox Live will have twice as much high-definition content as any cable company,” Robbie Bach, the president of Microsoft’s entertainment and devices arm, said. “This shows that the internet is the distribution medium of the future.”

Microsoft will also supply web video technology to the American NBC television network, which will enable it to stream more than 3,000 hours of footage from the Beijing Olympics over the internet – and make it available on-demand afterwards.

Apart from these entertainment deals, there were few significant new announcements from Microsoft.

Instead, Mr Gates reflected on the changes that have swept through the industry since he gave his first CES speech in 1994. “Windows 95 was just coming together, the internet was just getting started,” he said. “Soon after that we entered our first digital decade.”

The second digital decade, he predicted, would result in gadgets becoming simpler to control and more easily integrated with natural communication by speech, hand signals and gestures. He also showed off a prototype gadget that can identify people and buildings by their appearance and display relevant information about them, such as forthcoming appointments or opening times.

Throughout his speech, Mr Gates emphasised the continuing importance of software and predicted that more sophisticated applications will build bridges between devices, reducing the need for manual intervention. For example, he suggested, when someone takes a photograph with a digital camera, it will automatically arrive in a folder on the photographer’s PC, without any instructions being given.

Mr Gates confirmed that this would be his last speech at CES and he used the occasion to demonstrate his sense of humour – and his power. A video clip imagining his failed efforts to adapt to life in the outside world when he steps down from his full-time role at Microsoft in July featured cameos from Hillary Clinton, Barack Obama, Al Gore, Bono and Matthew McConaughey, who appeared as Mr Gates’ personal trainer. “You’re going to be the sexiest man alive,” McConaughey says, not entirely convincingly, as his newly retired client wrestles with a set of weights.

The subtext of the video seemed to be that, whatever he says, Mr Gates will never really leave Microsoft.

Explore Tech & Web

• Personal Tech

• The Web

• Gadgets & Gaming

Times recommends

• Bridging the gap between mind and machine
• Wrath of the Lich King - five star review
• Ancient Rome lives again on Google Earth