Microsoft (Nasdaq: MSFT) plans a “special unveiling” related to the Xbox, suggesting that the world’s biggest software maker use the event to introduce the latest version of its game console.

The event will be held at Microsoft’s Redmond, Washington, headquarters, according to the e-mailed invitation. It will also be shown online, via the Xbox Live service and the Spike TV network.

The software maker is planning a new version of the console to maintain its 27-month lead over Sony Corp. and Nintendo Co. in a market projected to expand to $70 billion in 2017. It’s also adding features to the Xbox designed to help it withstand the shift to games downloaded to computers and mobile devices from packaged products.

Microsoft will “share our vision for Xbox and give you a real taste of the future,” Larry Hryb, the Director of Xbox Programming who goes by the name Major Nelson, on his official Xbox blog. He said Microsoft will will continue to discuss its plans and show its games lineup in May at the E3 show in Los Angeles.

Microsoft will use an Advanced Micro Devices Inc. processor in the next Xbox game console, seeking to cut the cost of building machines and get developers to create more titles, people with knowledge of the matter said earlier this month. Xbox has led console sales in the U.S. for the last 27 months, according to market-research firm NPD Group.

Competitor Consoles

Sony unveiled the PlayStation 4, the newest version of its own console, in February and plans to release it in time for the holiday shopping season. Microsoft had considered holding its event in April and scrapped that plan, people familiar with the matter said earlier this month.

The company saw little competitive pressure from Sony’s announcement, the people said.

Nintendo’s Wii U, another competitor, has been selling below the company’s initial forecasts. In January, the company said it expected to sell 4 million units in the fiscal year ending March 31, down from a previous outlook for 5.5 million.

Traditional console makers face competition from cheaper machines like Ouya Inc.’s online gaming device, and changes in game play that favor inexpensive titles for mobile devices such as Apple Inc.’s iPads and Samsung’s Galaxy Tab.

Zynga Revenue Forecast Misses Estimates

Zynga, the biggest maker of online social games, on Wednesday forecast second-quarter sales that may fall short of some analysts’ estimates as revenue from mobile titles fails to make up for a drop in users playing its games on Facebook Inc.’s website.

Revenue in the current period will be $225 million to $235 million, the San Francisco-based company said in a statement.

Analysts on average had predicted sales of $260.1 million, according to data compiled by Bloomberg.

The number of monthly users declined 13 percent to 253 million in the first quarter, Zynga said. Chief Executive Officer Mark Pincus is struggling to restart growth as more users shift their attention away from games on desktop websites such as Facebook, Zynga’s core business, and toward games played on wireless devices, according to Arvind Bhatia, an analyst at Sterne Agee & Leach Inc. in Dallas.

Sales fell 18 percent to $263.6 million in the first quarter, compared with analysts’ average projection of $263.9 million.

Zynga generates revenue by selling virtual goods within its games — for example, a gun in “Mafia Wars” or a gazebo in “CastleVille.”

Though the number of Facebook users playing games on the social network is growing, gaming upstarts such as King.com Ltd. and Wooga GmbH have taken share of that audience. Zynga owns just two of the top six games played on Facebook, compared with all six a year earlier, according to researcher AppData.

U.S. retail sales of packaged video games fell 21 percent last year to $8.9 billion, according to researcher NPD Group, while revenue from games downloaded to computers and mobile devices rose 16 percent to $5.9 billion. Globally, the market including hardware and accessories was $67 billion.

Video Game Industry Sales Fall in March

U.S. retail sales of video-game hardware, software and accessories fell 10 percent to $992.5 million last month, NPD said earlier this month, extending a slump fueled by gamers shifting to mobile gadgets.

Hardware sales fell the most, declining 32 percent to $221.6 million, compared with a year ago, Port Washington, New York-based NPD said in an e-mailed statement today. Software sales for the current generation consoles, which have been on the market for seven years, slipped 1 percent to $554.8 million.

Sales of packaged-game products are declining as more consumers download digital games on smartphones and tablets. Physical sales accounted for about 50 percent of total U.S. consumer spending on games, NPD said.

Total software sales, including titles for personal computers, gained 2 percent to $602.4 million, the first increase since November 2011. Sales were buoyed by Take-Two Interactive Software Inc. titles “BioShock Infinite” and “NBA 2K13.”

Total spending on U.S. video-game hardware and software, including used-games, rentals and digitally delivered content, was almost $1.9 billion, Liam Callahan, an analyst at NPD, estimated.

Microsoft Corp. said U.S. retailers sold 261,000 Xbox 360 game consoles last month, a decline of 30 percent compared with a year earlier. The company, based in Redmond, Washington, held its spot as the No. 1 selling model in March.

Video-game makers voluntarily report their sales tallies. Nintendo Co. and Sony Corp. do not typically release monthly figures. Nintendo’s 3DS handheld sales grew 9 percent over a year ago, NPD said, without citing exact figures.