Las Vegas — This week kicked off with a cloud, both literal and figurative, hanging over the world's largest gadget–fest, the Consumer Electronics Show.

A Canadian–like winter greyness hung over Las Vegas on Monday while temperatures hovered near zero, a far cry from the normally sunny skies and spring-time warmth usually seen this time of year.

The souring economy, which U.S. president–elect Barack Obama on Monday said is getting worse, also added to the gloom in Sin City. The Rio hotel and casino, owned by Harrah’s Entertainment, announced it was laying off or reducing to part-time status 70 of its workers.

"We regularly review our staffing requirements to ensure they remain aligned with business demand," the company said in a statement. "As you know, gaming has seen declines in business just as have most other industries."

The announcement, surprising at the best of times in a city that usually powers ahead despite economic slumps, was particularly amazing since CES is normally Vegas’s busiest period of the year. The annual electronics show generally draws between 140,000 and 200,000 people but this year about 130,000 are projected.

As such, many hotels have dropped their rates, some casino eateries are closed and more touts than usual are roaming the streets offering visitors deals on nightly shows and restaurants.

The CES exhibitors are expected to scale back, too. Big-name electronics manufacturers such as Sony, Samsung and Panasonic aren’t likely to unveil any earth-shattering technologies this year and will instead focus on refining their existing products.

While CES has been the launching ground for technologies such as the VCR, CDs and high-definition TV, thinner screens, more Wi-Fi capability and better design are expected to be the keywords this year.

Early announcements

The show officially opens on Thursday, but a number of early announcements have trickled out. LG Electronics on Monday announced a partnership with DVD rental company Netflix that will allow owners of the Korean company’s televisions to download movies directly to their set without needing an extra set-top box.

Netflix is not available in Canada, but the move is seen as another step toward the death of the disc, where consumers will eventually get all of their digital content — whether music or movies — through downloading.

Frank Lee, marketing manager for LG Electronics Canada, said Canadians can expect some news about Organic Light–Emitting Diode (OLED) televisions from the show. Sony debuted the cutting-edge technology at last year’s show but with a screen size of only 11 inches and a price tag of nearly $1,800, the TVs weren't ready for prime time.

OLEDs, which offer picture resolution and power efficiency superior to plasma and LCD, will improve by leaps and bounds at this year’s show, Lee said. Hybrid LCD televisions, which are backlit by OLED technology, are also likely, he said.

Samsung also announced a partnership with search engine company Yahoo on Monday that will bring internet–based video such as YouTube to its new line of televisions. Users will also be able to display internet-generated content such as stock information or headline news on their screens.

"This new interface allows them to interact and connect with many of their favorite web services on a personal level," Boo-Keun Yoon, Samsung's executive vice-president of visual display, said in a statement. "It’s frankly way beyond just passively watching broadcasts and is no doubt the future of TV."

The announcements by LG and Samsung are seen as the tip of the wave in internet content migrating to the television screen. With television programming making a big splash on the internet in 2008 through websites such as Hulu, TV manufacturers are now faced with the challenge of displaying that video.