E3: Gates shows off Xbox 360 to key CEOs

While Xbox executives J Allard, Robbie Bach and Peter Moore are busy promoting Xbox 360 at E3, Bill Gates has been showing off the next-gen console at an annual gathering of chief executives in Redmond.

Although journalists were allowed to watch a live feed of Gates' keynote speech, the broadcast was temporarily suspended while footage of the console in action was shown, according to news service CNET.

But comments made by Gates once the broadcast resumed suggested the audience had been shown a demo of a racing game.

"You're seeing a couple of things there - one is the realism," the Microsoft boss is quoted as saying. "For example, with those cars, you can pick any car you want; you can put your decals on it. If you even get in a wreck, it's very realistic. Your car will be damaged for all time.

"It's just at a whole new level," he went on. "Those are just previews of the work people are doing with our development kit."

He went on to discuss the communications options offered by the new console, such as the potential to host competitions or watch as a spectator.

Xbox 360 was unveiled for the first time last week in a half-hour MTV special, prior to Microsoft's pre-E3 conference on Monday. A worldwide launch of the console is planned for November.