Bach, president of Microsoft's Entertainment and Devices Group, which includes Xbox, expects the company will get a boost from the rowdy action game New York-based Take Two Interactive will begin selling April 29.

We also touched on recent Xbox shortages and the status of Sony's PlayStation 3. A few excerpts:

Q: What will GTA IV do for your business?

Bach: We'll see. I think it will be a great game. I think it will sell a lot of units. Hopefully it will sell consoles as well. Forget whether it's an Xbox or a PS3, but I think it will sell consoles -- it's a highly anticipated game.

Q: You put a lot of effort into getting special GTA content for the Xbox ...

Bach: In the last [console] generation, certainly, us not having GTA on the platform at the same time as the PlayStation created some challenges for us. We wanted to make sure we weren't in that situation this time. I think we've done good work with the folks at Take-Two.

Q: I wonder how the game will effect the PS3. It's coming out just as Sony's console is getting its stride.

Bach: Well I think the thing you have to recognize is, from an installed base, we still have a big advantage and a big lead there. I think we'll do very, very well with that. I also think some of the perception of advantage relative to PS3 for momentum has been at a time when we've been mostly out of stock and that's now changing. We're getting back in stock. I think the game will do exceptionally well and I think it will help Xbox.

Q: Was the lack of Xbox stock related to changes made to the guts of the thing?

Bach: No, we basically worked very hard. We had a lot of demand at Christmas. We pulled a lot of consoles into the holiday. You can't change your manufacturing pace fast enough to make up for that, so it's taken us two or three months to get manufacturing back to the level we think we need.

The business is so cyclical that you plan for a certain level during the holiday, then everybody slows down production because the second half of the year, you don't need as many consoles. So what happened was with the production we planned for the second half, we tried to pull as much of that up as we could. Once you sell through that, it's hard to replace it. It takes time to get the manufacturing back up. Getting us in stock in time for GTA IV was important.

As for the hospital donation, today was just the start. Working with hockey star Pat LaFontaine's Champions in Courage organization, Microsoft provided about a dozen consoles to children's hospitals in Seattle, New York and Anaheim, Calif.

Each one is preloaded with kid-friendly games, TV shows and movies. They also have cameras and microphones and customized parental control settings, so kids can play and chat online with others using the kiosks.

Bach said Microsoft may end up donating more than 100 of the kiosks across the country as the program evolves.

"When we do a program like this we like to pick a few places, work with it, get feedback on how it’s working, what we can do better, and then we'll expand it to other locations,'" Bach said.

At the Seattle hospital, they'll be part of a "child life" program, which works with 30,000 patients a year, according to program manager Kim Corte.The kiosks are based in a play area in the hospital's Giraffe wing, but they're mounted on wheels so they can be rolled to kids unable to leave their rooms.

"They'll be in very high demand,'' she said.