The Microsoft E3 2007 press conference is about to begin and the Santa Monica High School amphitheater stage is filling up with what looks like dry ice smoke. Check back for constant update on this news post as we live blog the event as it happens.

The conference began with a five member rock band from Libertyville, Ill. called Corporal playing the Halo theme on stage, including an impressive performance by a woman on a violin, while images of Halo 3 appeared on the big screen.

Xbox head man Peter Moore then addressed the crowd after the band played. Moore said that every demo that will be shown at the press conference will be released this year. The first game demoed was Rock Band from Harmonix with Moore on guitar demoing the game. At one point Moore made an error and put the game back to the menu screen but after a few seconds it went back to playing.

Moore then announced an all new game: Viva Pinata: Party Animals. Developed by Krome Studios instead of the game's original developer Rare the new title is a party themed game with over 50 mini-games.

The next game that was shown was Mass Effect, the long awaited sci-fi RPG from developer BioWare,in an impressive new trailer. Moore announced that the game will be released this November.

Moore then got down to business, saying that 18.1 million Xbox 360 games have been sold since the launch, about twice as much as the other two next-gen consoles. Moore said that 2.7 million Xbox 360 consoles have been sold since the PS3 and Wii launched. While the Wii has outsold the Xbox 360 just barely since the launch at 2.8 million unit it blew away the PS3 sales.

After a trailer showing off various first and third party Xbox 360 games this fall, Microsoft Xbox exec Jeff bell announced a new console game version of the popular board-DVD game Scene It. The game will come with four unqiue looking controllers (a big red ball at the top and smaller multi-colored buttons running down the controller) that will make it easy for people to play the game and the entire game will have the price of a normal Xbox 360 title. Bell also announced that UbiSoft's upcoming anime back action game Naruto: Rise of a Ninja will be an Xbox 360 console exclusive when it comes out this fall.

Bell also said that Electronic Arts' upcoming Xbox 360 sports games will run twice as fast as last year's title. He then brought out New Orleans Saints running back Reggie Bush on stage to play a quick game of Madden 08.

Bell then talked about Xbox Live, saying that 7 million members have signed onto the service with projections of 10 million by this time in 2008. 45 million Xbox Live Arcade downloads have happened so far and they showed a number of upcoming titles including an Xbox Live Arcade version of Marathon, Bungie's original first person shooter. Two new Sega games, ports of the classic Sonic the Hedgehog and Golden Ax, should be available to download for Xbox 360 owners tonight.

The next announcement was that Walk Disney Studios has joined the Xbox Live Marketplace with a number of movie downloads from the company in high-def versions (sadly no Pixar movies were mentioned). Bell announced that by the end of this year Xbox Live movie and TV downloads will launch in Canada and Europe.

Microsoft Games Studios head Shane Kim came on stage next to talk more about games. He introduced a demo of Project Gotham Racing with folks from Bizarre Creations showing off the new weather visual effects and the new motorcycles racing alonside the cars. The game is due to be released this September.

Shane Kim then showed off Lost Odyssey, the Japanese RPG from developer Mistwalker Studios that's due out later this year. Kim hyped up the RPG game lineup that includs Blue Dragon and Mass Effect. He also revealed that Rare's Xbox 360 title Viva Pinata will be coming to Windows PC this fall. Kim then finally officially revealed that Gears of War would also be coming to Windows PC. The game will feature a new multiplayer mode, new arenas, and new achievements along with a map editor for the game. You will also be able to finally face off against the massive creature in the game that got a lot of attention in Gears of War's trailers. Epic Games's "CliffyB" demoed this particular mode live. The game will be coming to Windows PCs this fall.

Moore came back to talk about Games For Windows Live, annoncing that Sega, Eidos and THQ will release games with the cross-platform support. Mooree said that a dozen games will have Games For Windows Live support by the end of the year (no specific titles were mentioned). Epic's Unreal Engine 3 will also have Games For Windows Live included. A number of scenes for upcoming Games for Windows titles were shown in a clips trailer.

Moore then showed off a new trailer for Infinity Ward and Activision's Call of Duty 4. This was followed by a live demo of the game onstage as we got to see a Ukrainian battle on the ground. It was impressive to watch as two US soldiers in full camo took out enemies and stayed unseen as a platoon of enemy soldiers started marching on their position. It was announced that an online multiplayer beta for Call of Duty 4 will be launched for the Xbox 360 platform.

Moore then hyped their plans for Grand Theft Auto 4, which will include two new downloadable episodes. Moore then showed a game that won't be released this fall; in-game footage from Resident Evil 5 that looked impressive. The full version of the new Capcom trailer will be released on Xbox Live July 26.

We then got to see a live demo of Assassin's Creed, UbiSoft's third person action-adventure game. The demo was set in Jerusalem. The demo included interactions with the townspeople (every one of the NPCs can either help or hinder you in the game) and that actions like killing a person will affect how other people in the town deal with you. At one point your player character find himself in a trap against a number of foes where the combat system was shown. But the game also seemed to have some odd visuals like shimmering enemies and even the entire environment which indicates that , as rumors have mentioned, the Middle Ages setting may be more than it seems.

Moore then introed a unique trailer; a live action short directed by Neill Blomkamp filmed in a documentary style that showed weapons, vehicles and more from the Halo universe (Blomkamp is the director chosen to direct the now on hold Halo movie). Moore also showed off a special edition Halo 3 Xbox 360 console that will be launched alongside the game. The final trailer of the night showed off Halo 3, finally showing off some pretty spectacular single player campaign action. The trailer closed the press conference.