Electronic Entertainment Expo (E3) Recap

This year’s E3, the video game industry’s annual convention, has come and gone. Even though it took place at a smaller venue (Santa Monica instead of Los Angeles), the big three still made important announcements.

Microsoft (MSFT)

They unveiled some type of kiddie remote which had big buttons. This is part of their effort to appeal to the casual gamers and bring younger children on to the Xbox360 platform. Other than that they only showed games in development. Considering what they showed the company is in cruise mode; just allowing developers to create more content and tweaking the cooling of their hardware. A price cut may be in store before the holiday season. The switchover from 90-nm to 65-nm allows them to make more chips on the same area, reducing costs. I’m personally waiting for these new chips before purchasing an Xbox360, because the Xbox360 is known to be noisy due to the cooling fans. The price drop, improved aesthetics, and plentiful content will help drive sales Holiday 2008. Their blockbuster game, Halo 3 will be ready in time for the holidays. This improved hardware will also reduce the losses incurred by repairing broken consoles, which has cost more than a billion so far. The games in development are for hardcore gamers and ones that hardcore gamers can play in front of their kids.

Nintendo (NTDOY.PK)

At the beginning of the press conference, they announced that they had won this generation’s console war. They are indeed in a position to be envied with hardware and software flying off the shelves. The most important announcement was the new peripheral, the Balance Board and its accompanying game, Wii Fit. The Balance Board senses your weight distribution on a board placed on the ground. By shifting your weight, you can interact with the character on the screen. Initial reports from the show floor indicate that the concept works and is fun even for hardcore gamers. The main target of Wii Fit is perfectly clear when you start seeing the yoga poses. Soccer moms will eat this up. They are ensured to sell millions of copies. Another peripheral announced was the Wii Zapper, a plastic case to put the WiiMote and Wii Nunchuck in to create a light gun for only $19.99 including game. This is perfect for simulating the guns at arcades and for killing zombies in Resident Evil: Umbrella Chronicles. The first party line up of (Super Smash Bros. Brawl, Super Mario Galaxy, Metroid Prime 3: Corruption, and newly announced Mario Kart Wii. Although the bulk of the announcements were for the Wii, the DS Lite handheld is also doing well with The Legend of Zelda: Phantom Hourglass. If all this wasn’t enough, Nintendo is now the 5th largest company in Japan.

Sony (SNE)

One thing I was extremely happy about was the redesigned PSP. I broke mine, so I was waiting for their new and improved version. The new PSP has longer battery life, is thinner and lighter. The game lineup is still lacking, but the PSP’s sales are starting to increase. I know people who have bought it and keep it in their drawer.

The PS3 underwent a pseudo-price drop. They are shifting around the prices and configurations by putting new models with bigger hard drives and bundled games at the $599 price point and pushing down the older configurations to $499. When those older configurations sell out, they will not be replaced. There are 2 killer applications that will drive the sale of the console. They are Metal Gear 4 and Gran Turismo 5. Unfortunately both of them will not make it for the holidays. Gran Turismo 5: Prologue, a stripped down version will come out in October in Japan to wet racer’s appetites. Their online experience called Home is shaping up to integrate games and a virtual 3D-world together. In the online arena, NCSoft, the makers popular of MMORPGs will make the PS3 their sole console platform since it has a hard drive. One thing that Sony does right is push upgrades that enhance functionality of their machines.

Outlook

MSFT is still having trouble penetrating the Japanese market. I know two people with an Xbox360. I own a Wii and NTDOY. My male friends have their own Wii. My female friends own DS Lites. My rich friends have PS3s. The PS3 has a lot of momentum with the brand, but they need to get the ball rolling. By end of 2007 if not sooner, the Wii will be the dominant platform.

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