CES: Microsoft's Bach on Xbox, Zune and Vista

Microsoft’s presence definitely can be felt at the Consumer Electronics Show in Las Vegas this week. CNBC's Bill Griffeth spoke with Robbie Bach, the president of the company’s entertainment and devices division, about the Xbox, Zune MP3 player and new operating system Vista – which will finally hit the market at the end of January.

Bach says Microsoft just had a “fabulous holiday,” with 10.4 million Xbox consoles sold. Xbox Live, the online gaming community that accompanies the system, reached 5 million members. Games sales have been great as well, Bach says.

The Zune is exactly six weeks old now, and as Bach notes it’s already No. 2 in the market. Of course, that’s a distant second to Apple’s lead in the market, but Bach concedes that point. His focus is on how early it still is in the proliferation of MP3 players.

“So there’s a tremendous opportunity both for Apple and for Microsoft to be successful in that space,” he says.

As for the oft-delayed Vista, he’s expecting the new OS to be big business over the next three to five years. “Vista’s a very important product for us,” he says. Bach’s predicting a smooth rollout as a result of million of hours of testing.