Microsoft has released the fall dashboard update for the Xbox 360, adding a variety of new functions to the system while refining its existing capabilities.

Included in the update is support for DivX- and Xvid-encoded videos, a family timer that allows parents and spouses to limit the time their loved ones invest in the console, and more social networking options. For all the technical details, check out the full change log.

The online Xbox Live Marketplace has been completely redesigned, and now offers up downloadable versions of original Xbox titles for 1200 Microsoft Points ($15) along with the new Xbox Live Arcade Hits program, which permanently reduces the price of several popular XBLA games.

Xbox Live-connected users will be automatically prompted to download the update when they attempt to sign in.

Previously only available to Xbox 360 users within the United States, an international version of the Xbox Live Video Marketplace will launch in Canada, the United Kingdom, Ireland, France, and Germany on December 11.

Though those within the United States are able to purchase television shows and rent films through the download service, the international store will only offer movie rentals at first. In the UK, standard definition movies will start at 250 Microsoft Points (£2), while the HD renditions will begin at 380 Microsoft Points (£3.20).

Films said to be available when the store debuts in the UK and Ireland include such Warner Brothers-distributed titles as 300, Harry Potter and the Philosopher's Stone, Eyes Wide Shut, Mars Attacks!, Superman III, and Zodiac.

LA-based marketing firm Deutsch had already received a congratulatory notice from Sony's recently dropped long-time marketing partner for winning the PlayStation account, but Sony had yet to officially acknowledge Deutsch as its new partner. The house of PlayStation confirmed the news today, saying Deutsch's contributions to the platform's ad campiagn will be seen starting next year.

"We were impressed with the Deutsch team's strategic discipline and integrated approach to marketing our various platforms," said SCEA marketing VP Peter Dille in the announcement. "We look forward to working with them on innovative marketing campaigns to build the PlayStation brand's influence even further."

Deutsch won the $150 million account last week over Seattle-based marketing firm Publicis, San Francisco-headquartered Venables Bell & Partners, and Santa Monica-based RPA. Earlier in the week, sources involved in the matter learned Sony's marketing partner of 13 years, TBWA/Chiat/Day, would not be in contention for the deal.

The multiplayer servers for Capcom's Resident Evil: Outbreak (PS2) and Monster Hunter (PS2) will shut down on December 31, 2007, the company revealed on its official blog.

The action is not a result of a Capcom-made decision, but is instead due to the third-party hosting company closing that portion of its business. Following the server shutdown, players will not be able to play either game online, though the single-player campaigns will remain unaffected.

Both games were originally released in 2004. Resident Evil: Outbreak, which was heavily criticized for lengthy load times and lacking player communication, allowed players to face off against a number of zombified creatures, including elephants. Monster Hunter had players working together to slay epic beasts, such as dragons, with text chat as their only means of communication.

According to the post, Capcom made several efforts to keep the servers online--including contract extension and outsourcing--but the unspecified company "doesn’t want to mess around with the time/money involved in porting anything."

After announcing the formation of doublesix last week, U.K.-based developer Kuju Entertainment has added a sixth studio to its roster of development houses. Called NiK NaK, this studio will focus on crafting games for 6- to 12-year-olds and is based in Guildford's Surrey University.

"I am very excited to be heading up NiK NaK, we have big ambitions for the studio to become a world leader in the huge kids' games genre," said newly appointed NiK NaK studio head Kevin Holloway in the announcement.

NiK NaK has started work on a series of games "based on a high IP" that will be unveiled next year. The development house joins Kuju's expanding lineup of U.K.-based studios, as the company recently announced the formation of digital distribution-focused studio doublesix.

Recent Kuju Entertainment titles include Geometry Wars: Galaxies (Wii, NDS) and Battalion Wars 2 (Wii).

It's a mixture of heroes, champions, and games that remind us of heartburn relief in today's update to the Wii's online Virtual Console store.

An original fighting game developed by Sega for the Genesis, Eternal Champions runs 800 Wii Points ($8). The Dynastic Hero, meanwhile, is Westone's TurboGrafx-CD version of the Genesis action-RPG Wonder Boy in Monster World, which hit Virtual Console earlier this year. The new boss comes in at 800 Wii Points, same as the old boss.

Though Compile's ZANAC--not to be confused with ZANTAC--doesn't exactly promise relief for heartburn, players can expect a prescription-strength dosage of top-down shooting action for 500 Wii Points ($5).

Update: New screenshots of the various upcoming titles have been added, including new pictures of Rez HD and N+.

Original Story: There will be no new Xbox Live Arcade release this week due to the launch of the Xbox Live Arcade Hits program, Microsoft has announced. The initiative, which permanently lowers the price of popular XBLA games, begins tomorrow alongside the debut of the fall system update.

Included in the program are Marble Blast Ultra, Small Arms, and Zuma Deluxe, which previously sold for 800 Microsoft Points ($10) and will now sell for 400 Microsoft Points ($5). Lumines Live! and Bankshot Billiards 2, both formerly 1200 Microsot Points ($15) represent the program's 800 Microsoft Point ($10) pricing level.

In addition to XBLA Hits, the fall system update adds a number of new capabilities to the system, including Xvid and DivX video codec support.

However, the company did provide the following list of XBLA games, all of which are due out "in the coming weeks." Only the specific release date of Sensible... Read more

Overzealous studio head Peter Molyneux revealed Lionhead's upcoming sequel to fantasy RPG Fable will be coming in fall of next year. Molyneux gave the information to Eurogamer readers in an online interview, as the title had previously been given a broad 2008 release window.

The notoriously outspoken developer said the title would be arriving by "Late 2008. Maybe when the leaves have a slight brownish tinge - but are still on the trees, if you see what I mean."

Molyneux also mentioned another project in development at the studio, unrelated to the company's previously revealed secret project known as Dimitri. Describing it as "kind of a hybrid of Dimitri," the studio head said he couldn't talk about the game yet.

"I am really, really pushing the powers-that-be to allow me to tell/show the world this new project," Molyneux said. "I know I am prone to say things like 'great', 'revolutionary' and 'ambitious', but this new project its absolutely great, revolutionary and ambitious!"

Microsoft has announced more details of the upcoming Xbox 360 fall update, the free download that will add new functionality and features to the system when it arrives next Tuesday, December 4.

Along with the Xbox Originals program and increased social networking, the company promises "enhanced video codec support" for MPEG-4 Part 2. "Our users should find that most of their DivX and Xvid files will work because they're under that umbrella," Microsoft's Aaron Greenberg told Joystiq.

The company has provided a table specifying video formats supported by the Xbox 360. More technical details on video playback are available official blog of the Xbox development team, which also supplies complete details of the forthcoming update. It had been widely rumored that support for the DivX codec would be added to the system, especially since that functionality was recently confirmed for the PlayStation 3.

Another change is that Microsoft will permanently lower the price of several Xbox Live Arcade titles as part of its new Arcade Hits initiative. Included ... Read more

Update: Hudson Entertainment has released an official statement confirming the layoffs. Several of the mobile division's Q&A and porting staff were let go, according to the statement, and their duties will be performed through "a more cost effective outsourced solution."

"It is always a difficult decision to layoff staff members, but it was important that we realign our mobile games business to ensure that we can move forward," said Hudson CEO John Greiner in the statement.

Other than the outsourced positions, the mobile division will continue business as usual, and other Hudson Entertainment divisions remain unaffected.

Original Story: A source inside Hudson Entertainment revealed to Next-Gen and other outlets that the Bay Area-based subsidiary of Japanese game company Hudson Soft laid off about half of its employees recently. The 25 to 35 laid off staffers worked in the company's mobile division, but it's unknown if this division has been shut down entirely or just drastically minimized.

The source told Next-Gen the move was based on the mobile division's poor performance due to marketing and management mistakes. "Their mobile division has not been profitable for about the last year-and-a-half or so," the source said.

According to the source, the laid off employees received two-weeks severance pay. Several of the remaining Hudson employees have been discouraged by the downsizing. "It seemed like it caught everyone off guard," the source continued. "They didn't see it coming."

Hudson Entertainment parent company Hudson Soft is a further subsidiary of Tokyo-headquartered game company Konami, who bought a majority stake in the company in 2005. Shacknews contacted Hudson's U.S. offices for comment, but has not yet received a response.

With both Sony and Nintendo releasing sales numbers or at least percentages for the week of Black Friday, Microsoft has decided to follow suit. The company announced today it sold 310,000 Xbox 360 units last week, nearly matching the Wii's 350,000 units.

It's been inarguably difficult to find the Wii in stores since its launch, and last week was no exception. While Xbox 360 console packages have been abundantly available at retail for some time, Microsoft's Aaron Greenberg told Next-Gen that retailers reported selling out of Xbox 360 units last week as well.

"We're seeing thousands and thousands of top big box retail stores reporting outages depending on SKUs, and some reporting outages of the whole Xbox 360 line," he told the site. Greenberg went on to claim that Xbox 360 sales trumped PlayStation 3 sales 2-to-1, which Sony has apparently disputed, but still hasn't released hard numbers to contradict the claim.

Nintendo execs have claimed repeatedly this week that they underestimated demand for the Wii. It's likely additional supplies of the high-demand console would've pushed Wii sales markedly higher than that of the Xbox 360.

This week's PlayStation Store update brings a multitude of content, led by a second map pack for Resistance: Fall of Man (PS3). The pack includes the new Bracknell and Axbridge maps and costs $4.99, and both map pack one and two will be available as a bundle for $7.99.

Rhythm-game players will be happy to learn the Rock Band (PS2, PS3, X360) David Bowie Track Pack that arrived earlier this week on Xbox Live Marketplace will be coming to the PlayStation store as well for $5.49, with individual songs priced at $1.99. The Guitar Hero III: Legends of Rock (PC, PS2, PS3, Wii, X360) Boss Battle Track Pack that arrived two weeks ago on Xbox Live will also arrive on the PlayStation Store today.

As promised, Idol Minds' physics-based character-slinging title Pain will be available for download for $9.99. And Bethesda's Elder Scrolls IV: Shivering Isles (PC, PS3, X360) expansion--available earlier this year for Xbox 360 and PC owners--will be up for grabs for $29.99.

IGN and GameSpot both have previews of the PlayStation 3 version of The Orange Box, with both sites noting the ports suffers from some serious framerate issues.

San Diego resident Randy Nunez has filed suit against Bungie and Microsoft, alleging that the company's recently released Halo 3 (X360) "does not function with the Xbox 360" as claimed by its creators. Nunez filed a complaint acquired by gossip website TMZ this week in a Southern California U.S. District Court.

According to the text of the complaint, Nunez purchased the game in October but could not play the game because he claims "attempted use of Halo 3 consistently causes the Xbox 360 to 'crash,' 'freeze,' or 'lock up' while the game is being played."

The claim alleges that Nunez is not alone in his plight, and that "Many consumers have reported that the Halo 3 video game has caused their Xbox video game console to crash and remain totally inoperable after playing the Halo 3 video game." As such, the suit has been filed as a class action and open to others in Nunez's similarly bizarre situation.

Nunez seeks unspecified relief for his troubles, otherwise he claims others will be hurt by Halo 3's mischievous marketing as well. "Unless equitable relief is granted, the sale of Halo 3 video games for exclusive use on Xbox 360 game consoles will continue unabated," the complaint concludes.

When contacted for comment, a Microsoft rep said the company "just received the lawsuit and are not in a position to comment on it at this time."

Despite Nintendo's record-breaking sales of the Wii last week, the dearth of units available at retail made it all the more clear how much the company underestimated demand for the console. Nintendo of America president Reggie Fils-Aime admitted as much this week at the Dow Jones Consumer Technology Innovations Conference, calling the lack of consoles "literally a missed opportunity."

File-Aime reiterated that the demand was not artificially created by an intentional shortage of consoles. "There is no secret plan to store Wiis in a warehouse to spur demand. The company, after all, is trying to reach out to women and to 40- and 50-year-olds who aren't avid gamers," Fils-Aime said. "They aren't going to sleep outside of a store overnight or visit a retailer five or six times."

Earlier this week, Fils-Aime said the company was "disappointed" by its low estimates of demand for the system, saying "A shortage benefits no one." The president first admitted the supply of holiday consoles wouldn't meet consumer demand in October, when he said the company's estimates rather than production capabilities were the problem.

"The issue is not a lack of production. The issue is we went in with a curve that was aggressive, but the demand has been substantially more than that," he said.

Although Nintendo's Wii console has already seen fairly substantial consumer adoption, Activision CEO Bobby Kotick said recently at the Reuters Media Summit that even the Wii will need to drop in price before it hits mass-market appeal.

"In the next 24 months they all will need to be at that $199 price point, and you can imagine Nintendo will be down to the $129 price point over the next few years," Kotick said.

Kotick said the Wii's early success despite being relatively underpowered is indicative of its low $249.99 price trumping technological advances in the eyes of the consumer. The lowest priced Xbox 360 model sells for $279.99, while the cheapest PS3 comes in at $399.99.

Although the slimmed down PSP sips less power than the original, it includes a smaller 1200mAh battery, giving it approximately the same battery life as the original PSP with its 1800mAh battery. The new PSP Extended Life Battery Kit coming in December will give the Slim an edge over the old model, effectively doubling the Slim's battery life by including a 2200mAh battery and special battery covers to work with the slightly thicker battery housing, Sony announced today.

Sony already released a 2200mAh battery that improved the original PSP's battery life by about 20%, and while this battery also worked with the PSP Slim, its bulk prevented the battery cover from attaching to the new model. This is remedied by the special covers that come in the new pack.

The bundle includes both silver and black battery covers to match the tone of the PSP Slim. The 2200mAh battery in the bundle will work with the old model PSP, but offers no benefit over the already available 2200mAh stamina battery available for the system. The pack will be available for $44.99 sometime in mid-December.

While Sony only revealed percentages, Nintendo has released hard numbers for console sales for the week including Black Friday, showing 350,000 consoles moved during the seven-day period. Outside of the system's launch week, this figure marks the highest one-week sales since the Wii's debut.

Many consumers were unable to find Wii consoles in stores, including Nintendo of America president Reggie Fils-Aime, who told AP he had been scouting for the console at retailers to gauge its availability. The president said the low supply of Wii consoles is unfortunate and certainly not intentional.

"A shortage benefits no one," he said. "We're disappointed. This was all about how we didn't accurately estimate demand. We need to be more bullish about the potential for the Wii."

Nintendo's portable also fared well, selling 653,000 units during the week of Thanksgiving. The figure breaks Nintendo's record of 600,000 Game Boy Advance units sold during the same week in 2005.

After crafting the Commandos series of PC real-time tactical games, the founders of Madrid-based Pyro Studios went on to try their hand at cinema by starting Ilion Animation Studios in 2003. The move seems to have been a wise choice, as New Line Cinema recently bought the Spanish studio's first $60 million film, "Planet 51."

Fittingly, the movie creators' own Pyro Studios will be crafting the video game adaptation of the movie, which will arrive "across the five leading console platforms," according to Hollywood Reporter. Director Jorge Blanco and co-directer Marcos Martinez helmed the creation of the original Commandos: Behind Enemy Lines while at Pyro Studios.

"Planet 51" will mark New Line Cinema's first foray into animated films. With a story penned by the writer of "Shrek," the movie follows the travels of an astronaut who arrives on a planet of anxious aliens afraid of outsiders. Currently in production, the movie will be finished in 2009 and has already been sold in 30 territories.

Announced long ago as an Xbox Live Arcade title and rumored to be released this past summer, the launch date for Sensible World of Soccer has finally been confirmed by Microsoft and Codemasters. The online-enabled port of Sensible Software's 1994 Amiga followup to Sensible Soccer will come to the download service December 19 in North America and Europe.

Like many Xbox Live Arcade updates, the game can be played in both classic and enhanced graphical modes and features HD visuals. And of course, footballers can battle it out online in two-player team vs. team matches.