AllThingsD will be there keeping an eye on two questions in particular: How is the business of mobile games changing, and how are the makers of consoles and other physical media responding to mobile’s ascendance?

This year’s conference also promises to at least touch on the growing relevance of women in the gaming community, and will also highlight the gap between small independent games studios and the larger legacy companies that are finding different degrees of success in staying relevant as their industry continues to expand and fracture.

If you only read one gaming statistic this week, let it be this one: In a pre-conference survey, GDC 2013’s organizers found that 58 percent of gaming professionals attending either last year’s conference or this one plan to release their next game on smartphones or tablets. That’s a tad greater than commitments to the Xbox 360, Microsoft’s next console, PlayStation 3, PlayStation 4, Wii U and Wii combined, which together garnered “next game” pledges from 56.5 percent of developers.

Nevertheless, interest in gaming hardware is still strong, particularly for established consoles and for the Android-based consoles Ouya and GameStick, both of which bested the next Xbox and the PlayStation 4 when those same survey respondents were asked what platforms most excited or interested them.

Stay tuned for more!

The new technology, to be unveiled Wednesday along with the new console, will allow users to play games delivered over the Internet, these people said. The streaming service, they added, is designed to use current PlayStation 3 titles on the new console; the new device is also expected to play new games stored on optical discs.

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There’s no doubt about it’s strength in the U.S., but internationally, it’s not so clear how the seven-year old game console is faring, especially in comparison to Sony’s PlayStation. 

Microsoft sold 281,000 Xbox 360 units in January, up 4.1 percent from 270,000 a year ago, according to the NPD Group, which tracks sales of video-game software, hardware and accessories in the U.S. that occur at retail.

Earlier this week at D: Dive Into Media, Yusuf Mehdi, who leads Microsoft’s interactive entertainment business, also provided an update based on internal data.

He said the overall Xbox installed base is now at 76 million, up from 70 million at the end of September of last year. Also, 24 million Kinects have been sold, up from 20 million last year, and there are 46 million Xbox Live accounts, up from 40 million.

Sales continue to be brisk because the company has been successful at moving beyond a hard-core gaming audience to serve members of the family who like other forms of entertainment, such as streaming video or music.

But the rivalry between the different console makers is particularly intense right now as the industry waits for the next-generation devices to launch.

The Nintendo Wii U was the first to launch this holiday season, but has had a relatively lackluster performance. Next week, Sony is planning to unveil its new home videogame console at an event in New York. But Microsoft has remained mum on its plans for any potential Xbox 720. Earlier this week, Mehdi refused to budge on the subject. “I’ll politely decline any comment,” he said.

So, the question is, will Sony’s PlayStation 4 be well received?

If global trends are any indication, it’s possible. Based on numbers culled from the three company’s earnings reports, Geekwire was able to determine that the PlayStation 3 was the best-selling home console worldwide during the holidays.

Sales of the PS2 and PS3 totaled 6.8 million units for the December quarter to beat the number of Nintendo Wii and Wii U units sold (5.3 million), and the number of units reported by Microsoft for the Xbox 360 (5.9 million).

For the full year, the two PlayStation devices together sold 15.6 million units worldwide, compared with 8 million for Nintendo and about 11 million for the Xbox 360.

In other words, Sony continues to have a very strong worldwide presence for the PlayStation, compared to the Xbox which seems to dominate in the U.S.

Overall, however, the hardware sector remains fairly weak. Most executives in the videogame industry believe a new wave of hardware is needed to spur consumer interest again, while others believe that gamers are less attached to the living room than they were before and prefer gaming wherever they are from their phone or tablet.

NPD reported that sales of hardware in January were down 17 percent year over year when taking into account that the month had five weeks instead of four.

The Japanese electronics giant Thursday unveiled plans for a special PlayStation-themed event set for Feb. 20, teasing fans to “see the future” at the event. People familiar with the matter have said the new device will make its debut there, beating Microsoft Corp. the punch in announcing its own next-generation game machine.

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On the game’s first day, it achieved $500 million in sales, setting a new record for the Santa Monica, Calif.-based game publisher.

Last year, it took 16 days for Call of Duty: Modern Warfare 3 to hit $1 billion. Both games achieved those stratospheric numbers faster than the movie “Avatar,” which took 17 days to hit $1 billion at the box office.

The other big shooter released this season, Halo 4, which is only available on the Xbox, sold $220 million in its first day on sale.

The sales figures are according to internal company estimates and Chart-Track, which keeps tabs on retail customer sell-through information. The game, while rated “M” for “mature” because of the intense violence and strong language, reaches an enormously broad audience for a first-person videogame that takes hours to master.

In a release, Activision Blizzard’s CEO Bobby Kotick said, “Since Call of Duty was launched, cumulative franchise revenues from players around the world are greater than current worldwide box office receipts to date for the top-10 grossing films of 2012 combined. Life-to-date sales for the Call of Duty franchise have exceeded worldwide theatrical box office receipts for ‘Harry Potter’ and ‘Star Wars,’ the two most successful movie franchises of all time.”

Many say the comparisons to movies are not fair, since a trip to the theater costs roughly $10 apiece, while Call of Duty costs $60 to own. However, a movie takes about two hours to watch, whereas the game can be enjoyed for weeks. For example, since the game’s launch, more than 150 million hours have been logged online playing Call of Duty: Black Ops 2 through Xbox Live and the PlayStation Network.

All combined, in just seven days the three console makers sold a jaw-dropping 1.98 million consoles in the U.S. — an astonishing accomplishment for an industry that is facing enormous pressure from emerging gaming platforms, like the iPad.

Today, Sony reported it sold more than 525,000 PlayStation 3 units over the past week, while Microsoft sold more than 750,000 Xbox 360 consoles to easily beat Wii U first-week sales of 400,000. In total, however, Nintendo sold 700,000 units, including both the Wii U and original Wii.

The week kicked off Sunday, Nov. 18, with the Wii U going on sale and ended Saturday, following Black Friday, one of the biggest shopping days of the year.

Nintendo’s sales of the Wii U were likely limited by the number of units it could manufacturer, with many U.S. retailers running out of inventory. Microsoft and Sony saw a lift from well-priced bundles that cost half as much as what Nintendo was charging for the Wii U, and in general, all three benefited from a trend in which consumers are using their videogame consoles for accessing other types of content through their TVs, including streaming media or music.

Sony said one PlayStation bundle, which cost $199, sold 15 percent more this year compared to 2011. Microsoft was selling similar Xbox bundles for $150. Essentially, the two manufacturers can afford price cuts like these, given that they are six years or more into their hardware lifecycles. In comparison, the brand-new Wii U costs $300 and $350, depending on the package.

In a blog post, Larry Hryb — a Microsoft spokesperson who blogs under his gamer tag, Major Nelson — reported that the Xbox 360 sold more than 750,000 consoles in the U.S. last week, easily beating Wii U first-week sales of 400,000. What’s more, it exceeds the 700,000 units Nintendo sold of the Wii U and the original Wii combined.

In some ways, however, the two numbers are not really comparable.

The Wii U, which launched last Sunday, costs between $300 and $350, and Microsoft is selling the Xbox for a number of configurations starting at half that price. Additionally, sales of the Wii U were limited by the number of units Nintendo could manufacturer, with many retailers reporting that inventory was sold out.

Microsoft said that the 750,000 consoles it sold between Sunday, Nov. 18 (when the Wii U launched) and Black Friday exceeded its internal forecasts. At that rate, the numbers are absolutely staggering, especially given the amount of pressure that phones and tablets are putting on the TV consoles as alternative gaming devices. Last month, Microsoft sold 270,000 Xbox units, making it the best-selling console in the U.S. at the time.

But access to streaming media and other entertainment is helping to drive sales of the older hardware. As Major Nelson pointed out today, Microsoft’s three-month Xbox Live Gold Subscription sales increased more than 50 percent, compared to the same week last year. On Sunday, its Xbox Live services — which include streaming video and multiplayer game play — were used by more than 14 million people, racking up more than 72 million hours worldwide. Compared to 2011, Microsoft has seen a 43 percent increase in U.S. hours logged on Xbox Live during the week of Black Friday.

I asked Sony for its sales figures for the past week, but the company has not responded to the request.

Activision just confirmed that its big first-person shooter of the year has racked up $500 million in sales on opening day, setting a new record for the Santa Monica, Calif.-based game publisher.

That easily outguns first-day sales of Halo 4, which Microsoft said on Monday totaled $220 million. Activision’s war-themed title also easily beats last year’s blockbuster release, Call of Duty: Modern Warfare 3, which achieved $400 million in sales within 24 hours, and about $1 billion after 16 days.

These big videogame titles are often compared to more general entertainment releases, like first-day sales at the box office, given their size and scope. The criticism of using that metric is that one game costs $60 versus the $11-or-so that it costs to go see the new “Twilight” flick. However, the counterargument is that a $60 game is much more of a commitment, and will take even the most savvy players weeks to finish, whereas a movie is snack-sized at only two hours.

Here’s Activision Blizzard’s CEO Bobby Kotick drawing the obvious Hollywood comparison:

“With first day sales of over half a billion dollars worldwide, we believe Call of Duty is the biggest entertainment launch of the year for the fourth year in a row,” Kotick said. “Life-to-date sales for the Call of Duty franchise have exceeded worldwide theatrical box office receipts for “Harry Potter” and “Star Wars,” the two most successful movie franchises of all time.”

On Monday, Microsoft claimed that Halo 4 beat box office releases like “Harry Potter and the Deathly Hallows: Part 2” and the “The Avengers” — based on day-one sales in the U.S. Halo 4 is sold exclusively on Microsoft’s Xbox, whereas Activision’s Call of Duty sells across the Xbox, PlayStation 3 and, two days from now, Nintendo’s Wii U.

Metacritic, which aggregates videogame reviews from various game publications, gave Microsoft’s Halo 4 an impressively high score of 91, based on 37 reviews, compared to Call of Duty: Black Ops II, which received an 84, based on 48 scores.

On Nov. 18, Nintendo will start selling the Wii U, marking the beginning of the next generation of videogaming hardware. Nintendo has not said how many Wii U’s it expects to sell, but it is forecasting 10 million units combined for both the original Wii and the Wii U this year. Already, retailers have sold out of the limited quantities made available for preorders, but more will be available on launch day.

In an interview with AllThingsD, Nintendo North American President Reggie Fils-Aime said, “We are looking to max out production as quickly as possible.”

Meanwhile, Microsoft said it sold 270,000 Xbox units in the month of October; that’s more than any other console. Based on data from the NPD Group, it says it continues to hold a 56 percent market share of the current generation of consoles in the U.S., including the original Wii U and the Playstation 3.

What’s more, NPD Group said that $315 million was spent on Xbox 360 products in October, or more than the other two current-generation consoles combined.

Nintendo will be the only one of the three to unveil new hardware in time for the holiday shopping season, and has priced the console fairly competitively. The new Wii U will cost between $300 and $350, depending on the package. At the same time, it is dropping the price of the original Wii to $130. The selling points of the new console are a controller with a touchscreen display, 3-D graphics and integration with live TV programming.

In lockstep with Nintendo’s launch, Microsoft has started experimenting with several different pricing models for its hardware, which is now more than six years old. On Oct. 28, it started selling different hardware configurations from $99 to $150 with a two-year Xbox Live commitment of $15 a month. The Live account is required to access many additional features on the console. In contrast, Nintendo does not have a subscription pricing model and only requires the upfront purchase.

Nintendo’s President of North America, Reggie Fils-Aime, made the announcement this morning onstage in New York City.

There will be two configurations available. The regular set, in white, will cost $299.99, and will include the Wii console and the Wii U GamePad. It will have 8 GB of memory. The deluxe package, in black, costs $349.99 and will ship with 32 GB of capacity, a GamePad charging cradle and the game NintendoLand.

Nintendo also announced it will be offering a new video feature called Nintendo TVii at no additional cost. TVii will allow consumers to search for content across multiple subscription services, including Hulu, Netflix and Amazon Video, and stream content to the TV.

Fils-Aime confirmed that Nintendo will release the games NintendoLand and Super Mario U at the Nov. 18 launch, along with 50 other titles from partners including Electronic Arts, THQ, Disney, Warner Bros., Ubisoft, Activision and many others.

The Wii U was first unveiled more than a year ago at E3, where Nintendo surprised the industry with the first tablet-size controller for a videogame console. The hardware also represents a nice upgrade from the current generation, because it supports HD graphics and hardcore game play. It will be connected online to offer new social experiences, including video chat.

Nintendo’s new system will be the only new console launching this holiday season. Microsoft and Sony have not announced plans for launching new Xbox or PlayStation hardware.

The Wii U will launch nearly a month later in Japan on Dec. 8.

The huge first day marked the best start ever for the franchise on this generation of hardware, with sales up 7 percent compared to last year. EA said the franchise also set a day-one online record, with a 28 percent jump in the number of users logging in to play simultaneously.

At launch, the game was available in North America for four systems: Xbox 360, Nintendo Wii, PlayStation Vita and PlayStation 3, for $40 to $60.

Critics are raving about the new technical innovations that allow tackles and other movements to look more realistic — and more painful. The game received high rankings on Metacritic.com, including a score of 82 out of 100 on the Xbox and a score of 85 on the PlayStation 3.

Of course, the hilarious YouTube videos that EA is using to market the game probably helped, too. The clips feature Paul Rudd, perhaps better known as the brother-in-law from “Knocked Up,” and Ray Lewis, the 240-pound linebacker for the Baltimore Ravens, pretending to be best friends and poking fun at each other while playing Madden.

Those viral efforts among others probably helped to generate the estimated 665,464 social interactions on Facebook and Twitter combined during the launch.

For kicks and tackles, here’s the video of Rudd dancing to Wiz Khalifa’s “Black and Yellow” in Lewis’s face to honor the Ravens’ big rival, the Steelers.

And here’s the simple reason why: Despite all the new categories being built over the past two years — like social and phone and tablet gaming — consumers are still spending less than they used to on videogames.

Anita Frazier at the NPD Group said the gains that digital gaming formats are realizing were not quite enough to offset a 16 percent drop in consumer spending during the second quarter.

Right now, the industry is close to a break-even point, with half of its sales coming from digital and half coming from software. It’s just enough to make the argument that companies should be investing in digital, but basically not enough for them to be rewarded for it, especially with standalone entities like Zynga eating up most of the profits in one category.

In the second quarter, $1.39 billion was spent by U.S. consumers on videogame software for consoles and PCs, including new, rental and used sales. In the other category, which includes digital downloads, subscriptions, mobile and social, sales in the second quarter totaled $1.47 billion, NPD Group said.

In June, those trends continued, with consumers spending a total of $1.1 billion, of which $439 million came from digital sales.

Based on how history tells it, the industry is fueled by cycles, with new hardware resulting in a jump in software sales. But the current generation of consoles are hitting their seventh year, which means that consumers have started to get tired of their ancient systems, and have started to slow their spending. Only one console maker, Nintendo, has plans to launch new hardware — the Wii U — in time for Christmas.

After two straight weeks of earnings reports, this trend is obvious.

Last week, Take-Two Interactive disappointed analysts with a wider than expected loss, Activision was down compared to the prior year, Electronic Arts’ results showed signs of weakness, and the week before, Zynga shocked investors after wildly missing expectations.

Frazier said in July that there was only one hardware platform that experienced an increase in sales compared to last year: Nintendo’s portable game unit, the 3DS. This month, we can look forward to a potential lift from the release of Nintendo’s 3DS XL, which boasts a bigger screen.

Otherwise, it’s Microsoft’s Xbox that is sweeping up the remnants in the space. But increasingly, the console is being used to stream video and other content to users’ TVs — not to play games.

Microsoft said that, based on the NPD results, it sold 203,000 units in July, which was more units than any gaming hardware. It currently holds 49 percent market share of current-generation consoles, and total spending on platform in July (including hardware, software and accessories) reached $218 million. At that rate, consumers spent more on Xbox 360 products in July than they spent on the Nintendo Wii and the Sony PlayStation 3 combined.

That’s what everyone will be looking for at tonight’s Sony press event, which kicks off at 6 pm PT, along with new software titles for both PlayStation and the PlayStation Vita, Sony’s handheld gaming device.

If the Sony press conference mirrors today’s earlier announcements from Microsoft Xbox and Electronic Arts, we’ll likely see sequels of established software franchises as well as a focus on interconnectivity between devices — the console, the TV, your tablet and your phone.

We’ll also have our eye on SOEmote, Sony’s new facial animation technology for EverQuest II, to see how that works.

6:06 pm: Jack Tretton, President and CEO of Sony Computer Entertainment of America, is kicking off the event.

It’s a packed house here at Los Angeles Memorial Sports Arena.

6:08 pm: Tretton says Sony is broadcasting the event tonight in four different languages.

Kaz Hirai — Sony’s new CEO — is here, too.

6:13 pm: Sony starts off with a brand-new game title: Beyond Two Souls, which features a protagonist named Jodie Holmes.

Jodie Holmes is the strong, silent type, or so it seems from this game clip we’re seeing. She’s being interrogated by someone, not saying a word. But this girl can make objects fly through the air.

She’s the antithesis of the Lara Croft look, with cropped hair, a flannel shirt and dog tags.

6:18 pm: Now a reference to Sony’s viral “Michael” ad from last year.

The team behind PlayStation’s All-Stars: Battle Royale takes the stage.

All-Stars will now be available for the PlayStation Vita, and will be compatible with PlayStation 3. In other words: More cross-play on multiple devices.

6:23 pm: Now the All-Stars: Battle Royal team is demonstrating cross-play.

The clown character in this game is enough to keep a small child up at night.

And Fat Princess — that’s the character’s name — wins this round. Handshakes among the team; a smattering of applause.

6:27 pm: As AllThingsD’s Tricia Duryee predicted earlier, we’re seeing more cross-platform playing options.

Later this year, Sony will introduce a cross-controller that allows players to play and share games using the PS3 and PS Vita together, Tretton says.

Eighty percent of PS3s and PS Vitas are connected to the Internet now, Tretton says, with 1,500 downloadable titles available.

6:31 pm: Tretton says games like Journey, Papo & Yo and Unfinished Swan will now be available for download on the PlayStation Network, just a few of more than 200 digital downloadable titles that will come to the PlayStation Network this month.

Plus, freebies: Infamous 2, Saints Row 2 and Little Big Planet 2.

It’s not a new strategy, throwing in free software to drive hardware sales, but the crowd seems to like the idea.

6:32 pm: Long live the freebie: E3 attendees will also get PlayStation Plus access for free for a year.

6:35 pm: Turning now to focus on the video offerings in the PlayStation store, like Amazon’s video service, Hulu Plus and NHL Game Center.

Last week, YouTube came to Vita; Tretton says Hulu and Crackle Television are coming to Vita soon, too.

(How many Vita units have sold, Jack? We’re waiting …)

6:41 pm: They are now showing off Assassin’s Creed III for PS Vita, with a female leading role! (i.e., no more uncomfortable sex scenes for female players).

The beginning of the game takes place at sea with a boat getting rocked by the waves. No pirates so far, but it looks like there should be some.

6:44 pm: Far Cry 3 is up now, another Ubisoft title. An insane cast of characters hits a remote island.

The differentiating playing feature of this game is four-player co-op, so there’s four people up on stage — one female — showing us how it is done. The players are all in verbal contact with each other as they come under heavy fire.

Go, go, go!

High fives all around!

By the way, this is Tricia Duryee taking over from Lauren Goode, who is experiencing technical difficulties. I swear, E3 requires multiple laptops and Wi-Fi connections to make reporting it possible.

6:49 pm: Next is an update on Sony’s Move, the motion-controlled device for the PS3.

I would love to have some new numbers on Move shipments, too, as it doesn’t seem to be doing as well as Microsoft’s Kinect. You have to have a lot of compelling software titles to get people excited about buying an accessory.

To that end, Sony is showing off some new Move content.

It’s something called “Wonderbook,” which appears to be a way to make a children’s pop-up book digital. There will be educational content.

Moonbot Studios is one of the first to be working on a “game” or “book” called Diggs Nightcrawler. Moonbot is mostly known for its e-books for children, so this is bringing new kinds of content to the PS3.

The first title will be called “Book of Spells,” authored by J.K. Rowling, better known as the author of “Harry Potter.”

6:56 pm: “Welcome to the reinvention of the book. … Open the Book of Spells to enjoy new writing by J.K. Rowling.”

The Book of Spells is no ordinary book, sort of like the paintings that come to life in the Harry Potter series.

Words pop up out of the book, dragons flap their wings and fly off the page with the wave a wand. Very cool!

Handing back to Lauren Goode, who is back online.

7:00 pm: Thanks Tricia!

The book in this game also becomes a digital pop-up book.

And a game controller turns into a spell-casting wand.

All the, um, kids who voraciously read “Harry Potter” will fully appreciate the possibilities of this game.

The Book of Spells from J.K. Rowling is the first of many books that will be available for the Wonderbook library, Sony says.

7:04 pm: In case you haven’t heard: Mobile gaming is giving traditional gaming a run for its money.

So Sony is now touting its PlayStation-certified mobile games.

HTC will be Sony’s first hardware partner for PlayStation mobile games.

7:06 pm: PlayStation Suite is now going to be called PlayStation Mobile, natch.

7:10 pm: This game clip we’re watching now is showing a fierce battle on a dock with some eel-like creature slithering around in the water. There are spears! Chains! Great balls of fire!

It’s God of War Ascension, which comes out March 12, 2013.

7:20 pm: We’re watching a trailer now of the new Uncharted game featuring Nathan Drake.

Update: This game is actually titled The Last of Us…not Uncharted. I shouldn’t have assumed this heart-throbbish guy was Drake!

7:22 pm: Lots of gun-firing, head-bashing and explicit cursing in this game. Not kid-friendly, for sure.

And the head-bashing just went to a whole new level.

This is the third game we’ve seen today showing people shot directly in the face.

(I think I’ll go back to Draw Something now …)

7:25 pm: Wow. So Sony’s concluding this portion of the event with the gunshot to the face clip?

Jack Tretton wraps it up and the crowd starts to file out of the arena.

As expected, no new console from Sony this year, but we did see a new cross-platform game controller, a partnership with HTC for mobile games, new IP (Beyond Two Souls) and more titles to boost PS Vita and Move, including the super-cool Wonderbook demo.

But will this be enough to drive more sales of PlayStation 3 as it enters its seventh year on the market?

Only time will tell. We’re out for now, but stay tuned to AllThingsD for continuing coverage, including Nintendo’s press conference at 9 am PT tomorrow!

RELATED POSTS:

• Nintendo Holds Back the Goods on Wii U Launch Date
• Nintendo Reveals a Wii Bit More About the Wii U
• From Sony, More Games and More Cross-Platform Play
• Ubisoft Prepping Eight Wii U Titles, Including Exclusives Like Zombi U
• EA Building Up Its Facebook Empire — This Time With SimCity Social
• Ear-Splitting, Eyeball-Peeling Demos From EA
• Microsoft Calls Dibs on New Call of Duty: Black Ops 2 for Xbox
• Microsoft Doubling Down on Video and Music for the Xbox
• Microsoft Unloads the Latest for Xbox: Shooters, Sports and Songs
• Nintendo’s Wii U Embraces Social Networking (Video)
• E3 Interview: EA’s Riccitiello Promises to Make “Eyeballs Peel”

Iwata filmed the 30-minute video in a bare conference room in the company’s Japan headquarters, making it a very different stage from the one on which he will be presenting Tuesday at E3.

This week in Los Angeles, hardware and software makers will be throwing highly choreographed presentations in the hopes of impressing both the media and fans worldwide.

Nintendo’s pre-E3 video was something much different.

It provided a much more controlled environment for Iwata, who normally prefers to speak through a translator, to make the case for why the Wii U is better than everything from the Xbox to the Apple iPad. But it didn’t provide any of the fireworks that many people were likely expecting, so apologies to Nintendo fans, you’ll still have to wait until Nintendo’s “official” E3 press conference on Tuesday for that.

Within the confines of the quieter environment, Iwata didn’t just provide a rundown of the Wii U’s hardware specifications, including new details of the 6.4 inch touchscreen display called the GamePad, but also made a case for how Nintendo offers “unique” experiences that draw friends and families together.

He said the system is designed to create a sense of “empathy” among Wii U users that is much different from the war-torn, trash-talking environments found on Microsoft’s Xbox Live and Sony’s PlayStation 3. As a demonstration, Iwata played a video clip showing a teenager asking a grandpa over video chat how to more effectively kill zombies. (For dramatic effect, grandpa was sitting in a scooter.)

“It helps unite people rather than divide them, whether they are in the same room or great distances apart,” he said.

Nintendo expects to do this by having its own social network, Miiverse, which from what I can tell will be a proprietary network that will not link to already existing communities such as Facebook or Twitter. Eventually, Iwata said, Miiverse will be accessible online using any Web-enabled devices.

Iwata said people often ask him if the Wii U is a simple evolution or something that is entirely different.

“The best answer is both,” he said. “Today, Wii U does what we did only better, while at the same time it is also something entirely new. Not only can it connect people in the same living room, but it can also connect people living room to living room.”

Here are some of the more hardware-driven changes announced today, a year after the Wii U was first unveiled at E3:

• The Wii U controller is now called the GamePad, which has an updated set of controllers since last year. It now also has near field communication, or NFC, and supports infrared to control TVs and set-top boxes.
• Nintendo announced a secondary controller, called the Pro Controller, which is very similar to the controller for Microsoft’s Xbox.

Here’s the video, but also check back on Tuesday when Nintendo will reveal more details:

RELATED POSTS:

• Nintendo Holds Back the Goods on Wii U Launch Date
• Nintendo Reveals a Wii Bit More About the Wii U
• From Sony, More Games and More Cross-Platform Play
• Ubisoft Prepping Eight Wii U Titles, Including Exclusives Like Zombi U
• EA Building Up Its Facebook Empire — This Time With SimCity Social
• Ear-Splitting, Eyeball-Peeling Demos From EA
• Microsoft Calls Dibs on New Call of Duty: Black Ops 2 for Xbox
• Microsoft Doubling Down on Video and Music for the Xbox
• Microsoft Unloads the Latest for Xbox: Shooters, Sports and Songs
• Nintendo’s Wii U Embraces Social Networking (Video)
• E3 Interview: EA’s Riccitiello Promises to Make “Eyeballs Peel”

Now there’s some additional information on timing, thanks to a lawsuit between Activision and some former employees.

According to confidential agreements unsealed in the court case, Microsoft’s next game console, which is referred to as the “Xbox 720,” could be released in time for the 2013 holiday season.

The Los Angeles Times originally posted the documents on Monday, but it was Brier Dudley of the Seattle Times who came up with the theory on the timing.

The lawsuit is a complicated tale, involving Activision’s insanely successful first-person shooter Call of Duty. Former Activision developers are claiming they are owed hundreds of millions of dollars in royalties and bonus payments. Activision is claiming breach of contract.

The documents, revealed last week, detail a high-profile deal between Bungie and Activision in 2010.

The 27-page agreement calls for Bungie to develop four “sci-fantasy, action shooter games,” code-named “Destiny,” released every other year, beginning in the fall of 2013, according to the Los Angeles Times. Additionally, Bungie agreed to put out four downloadable expansion packs code-named “Comet.”

Bungie is the developer behind the successful Halo franchise, but is not the developer behind Halo 4, which Microsoft is developing and releasing in November.

Here’s what Dudley is suggesting based on the contract language:

Microsoft hasn’t said when the next version of the Xbox will go on sale, but the Bungie contract suggests that it could happen in the 2013 holiday season, with “Destiny” as a key launch title. That would be similar to the way Halo was a cornerstone of the first Xbox launch in November 2001.

An Xbox spokesman declined to comment on this theory, and referred questions to Activision and Bungie.

The document also says the game is expected to be released for the PlayStation 3 successor in the fall of 2014.

The big caveat to all of this guesswork is that the document is now two years old, so timing could easily change. Additionally, the name “Xbox 720″ could just be a code name or placeholder. Of course, console makers keep the timing of their upcoming hardware close to their vests, so that consumers don’t hold off on making purchases.

In March, Microsoft’s Corporate Communications boss Frank Shaw told AllThingsD that consumers probably shouldn’t expect new hardware at the E3 game conference, or “anytime soon.”

“For us, 2012 is all about Xbox 360,” he added.

Here is a very cool — if slightly creepy — video that debuted at the Game Developers Conference this week in San Francisco.

Made by the Paris-based Quantic Dream, developers of the groundbreaking Heavy Rain game, the “Kara” concept video is a look at the future of gaming, using full-body motion capture and a new computer-graphics engine. It is running in real time on Sony’s PlayStation 3 platform.

Mostly, it is just heartbreaking, as a robot comes to life and is quickly scared by the idea of how precious that can be.

Enjoy:

According to NPD data released today, about $6.7 billion, or 40 percent of consumer retail spending, was spent on the Xbox, breaking down into two categories: $2.1 billion on consoles and $4.6 billion on games.

The figures take into account U.S. retail sales of new physical videogame content, including portable and console hardware, games and accessories.

In all, those sectors generated revenue of $17.02 billion in 2011, an 8 percent decline over the $18.6 billion generated last year. (Yes, I repeat, Microsoft got 40 percent of that in 2011.)

The initial report does not take into account sales from digital formats such as downloadable content on the console, social and mobile games, or other categories, including used and rentals.

Those so-called “newer” categories generated $7.24 billion in revenues last year, an increase of 7 percent over the prior year.

The increase in spending on alternative formats, however, wasn’t enough to offset declines in physical retail. All told, consumer spending across both categories totaled between $16.3 billion and $16.6 billion, falling 2 percent over last year.

Separating physical and digital sales is quickly becoming an outdated concept, since the two are so intertwined. Consumers have the choice of purchasing many of the games over the Internet via a digital download versus buying them at Wal-Mart or Target.

NPD acknowledged today that it needs “deeper visibility” into digital distribution to get a complete picture of the industry, which will be its focus in 2012.

Still, the report can still be used as a litmus test to see what is performing well.

Overall, a surprisingly disappointing December is what dragged down results for the whole year, NPD discovered.

“Because of the great slate of content that came to market during the fourth quarter, I had expected December sales to represent a larger portion of total year sales than what occurred,” said NPD Group analyst Anita Frazier, in a release.

Frazier added that December sales accounted for just 23 percent of the annual total, compared to the past 10 years, when December, on average, represented 28 percent of the total.

In addition to Microsoft’s Xbox, Sony’s PlayStation also performed well, with both witnessing a 5 percent increase across all game categories for 2011. Meanwhile, the Nintendo Wii, which cannot display HD content, saw a decline year over year.

In a separate statement, Microsoft said that it outsold the PlayStation, the second-place console, by 2.7 million units, and that in all, it has now sold 66 million Xboxes and 18 million Kinect accessories. On a global basis, Sony said in a statement that it sold more than 6.5 million units worldwide this holiday season.

Here are the Top 10 best-selling games in December, according to NPD:

1. Call of Duty: Modern Warfare 3 by Activision Blizzard
2. Just Dance 3 by Ubisoft
3. Elder Scrolls V: Skyrim by Bethesda Softworks
4. Mario Kart 7 for 3DS by Nintendo
5. Battlefield 3 by Electronic Arts
6. Madden NFL by Electronic Arts
7. Assassin’s Creed: Revelations by Ubisoft
8. NBA 2k12 by Take Two Interactive
9. Super Mario 3D Land for 3DS by Nintendo
10. Batman: Arkham City by Warner Bros. Interactive

But it also warned that Tom Clancy’s Ghost Recon Future Soldier, one of the Paris-based company’s big franchise hits, would be delayed by three months, or until its fiscal first quarter of 2012-13.

The game is expected to launch in North America on May 22, and in Europe on May 24, for the Xbox 360 and the PlayStation 3.

Ubisoft said it was expecting third-quarter sales of 650 million euros ($828 million), up 8 percent over the same period a year earlier. That exceeds its previous guidance of 620 million euros ($790 million), which was at the high end of its range.

Two of the games that Ubisoft said performed well during the holidays were Just Dance and Assassin’s Creed: Revelations. The latter faced steep competition from both Activision’s Call of Duty and Electronic Arts’ Battlefield 3. Ubisoft also said it continues to see growth from online sales, which would include social games.

“In continuation of the robust trends recorded for the first half of the fiscal year, Ubisoft reported record-high sales for the Christmas period, exceeding expectations,” said CEO Yves Guillemot, in a release.

Due to its strong third-quarter performance, Ubisoft said it was revising its full-year guidance to 1.08 billion euros ($1.4 billion) on the high end. Operating income before some expenses is estimated to be up to 65 million euros ($82 million), up from the previous estimate of up to 60 million euros ($76.5 million).

Final third-quarter results will be published on Feb. 15.

Wedbush Securities analyst Michael Pachter maintained his neutral rating on the stock, and his 7 euro price target, based on the unclear release schedule and recurring delays.

Ubisoft, which trades on the Paris stock exchange, is currently trading at 5.23 euro.

Microsoft was proud to announce that over its lifespan, more than 66 million consoles have been sold and that 40 million users have signed up for an Xbox Live membership.

To be sure, the Xbox continues to be one of the top-selling videogame consoles, beating both Sony’s PlayStation 3 and Nintendo’s Wii for the past year.

But breathing new life into the device is the motion-controlled accessory called the Kinect, which was introduced right before the holidays in 2010.

Microsoft provided a sales update last night for the Kinect, saying it has now sold 18 million of the units, which represents about one in four Xbox owners. The last update — that 10 million had been sold — was provided 10 months ago when Microsoft said the Kinect shattered the Guinness Book of World Records for fastest-selling consumer device ever.

But the device’s future is a little hazy.

On the Xbox, one of the most popular use cases has been to play dance simulation games. The controller has yet to break substantially into the more hardcore titles. More recently, Microsoft has made it clear that the Kinect will be an integral part of the user interface by providing a wider selection of entertainment options in the living room.

On Dec. 6, the company rolled out a free update to Xbox Live that allowed people to use the Kinect to conduct a Bing search to find games, music and video across several providers. The user interface also allowed people to control the box with voice commands instead of the game controller.

During the keynote, Microsoft’s CEO Steve Ballmer announced the Kinect will be coming to Windows on Feb. 1.

In a follow-up blog post, Microsoft said the hardware will have to be optimized for the Windows platform, and the price will reflect that. The Windows-based device will cost $250, more than double the price of the Kinect for Xbox, currently $120 on Amazon.

Microsoft also points out that it can mark down the cost of the hardware for the Xbox because it is subsidized by the purchase of games.

The biggest change to the hardware perhaps is that the camera will be able to see objects as close as 40 to 50 centimeters away from the device, whereas the Xbox version requires you to stand a few feet away from the TV and use most of your living room.

Microsoft also said Kinect for Windows will support gestures and voice on Windows Embedded-based devices, such as systems in manufacturing, retail and other industries.

There will be a slightly cheaper version, priced at $150, for qualifying educational users, to fuel additional innovation on the platform.

Coming up with compelling reasons to buy the technology will be important, especially since Microsoft is charging such a premium price.

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Though it won’t arrive in the U.S. until Feb. 22, Sony’s newest handheld gaming device has stumbled out of the starting gate in Japan. The device sold 321,400 units in two days, but on Monday, Sony issued an apologetic statement after complaints emerged that the Vita was freezing and crashing.

But, for what it’s worth, there is a common thread between the two products: Sony’s new gadget was developed in part by one of the original creators of one of the most successful consumer-electronics devices of all time.

As the PlayStation blog reports today, the look and feel of the Vita was designed by Takashi Sogabe of the Sony Corporate Design Centre. It also notes that Sogabe, who has been at the company for 27 years, worked on the original Walkman.

While it probably isn’t entirely accurate that he worked on the original Walkman (since it came before Sogabe’s time), a bio on Sony’s Web site gives him credit for a “See-through Walkman,” and a “Beautiful Walkman.” He also worked on the PlayStation 3 and Sony’s e-reader.

The PlayStation blog will be posting a full interview with Sogabe later, but today’s post did offer some details.

Sogabe said the design team came up with various versions of the Vita, including one with a sliding back, and another that snapped shut like a clamshell.

He also said that they tried to incorporate two touchpads in place of the dual analog sticks, but that they weren’t accurate enough.

(Takashi Sogabe image courtesy of Sony)

(Walkman images courtesy of Wikipedia)

Experts Give the New Xbox Raves for Control, Creativity
(Dec. 6 2001)
Photo: Mario Tama/Getty Images

Microsoft sold more than 960,000 consoles last week, with a majority flying off the shelves within a single 24-hour period.

Nintendo also said the Wii had the biggest Black Friday ever, selling more than 500,000 units on the day after Thanksgiving.

At one point during the shopping madness, a shopper pepper sprayed a crowd at a Wal-Mart to get her mitts on an Xbox (although reports now say police are investigating the incident to determine the cause of the attack).

Sony declined to release sales figures for the PlayStation 3 last week, but it is likely benefiting from a recent $50 price cut.

Such strong sales are mind-blowing.

People are lining up for — and in some cases fighting over — hardware that is five to six years old. It’s difficult to imagine any other consumer hardware that could attract that kind of demand after such a long period of time.

All three are nearing the end of their life cycles. The Nintendo Wii and PlayStation 3 are both five years old, and the Xbox 360 is a year older.

Nintendo announced that it will release a new console, the Wii U, later next year. Microsoft and Sony have not said anything official, but they are both expected to follow with competing launches in the same time frame.

It has long been a pattern for all three rivals to release new hardware at the same time. A European PlayStation executive recently hinted that Sony’s plan was to continue that trend because it was “undesirable” to be significantly later than the competition, according to IndustryGamers.com.

Despite the odds, there are at least three reasons why sales continue to do well.

The lineup of games is as strong as it has ever been for the consoles; all three have tried sprucing up the hardware with accessories and adding downloadable content; and, finally, consumers don’t have a choice — the only alternative is to wait another year.

First, the games: This year, publishers waited until now to release some of the hottest titles of 2011; hardcore gamers in particular will have their choice of any number of blockbuster hits.

Activision’s Call of Duty game is already a runaway success, grossing $775 million in the first five days it was available, to shatter all entertainment records.

Also in the hardcore genre is Electronic Art’s Battlefield 3, Ubisoft’s Assassin’s Creed, PlayStation’s Uncharted 3 and Rocksteady’s Batman: Arkham City, which are all going head to head this holiday season.

But the consoles don’t just serve the hardcore genre anymore.

Last year, both Sony and Microsoft released motion-controlled gaming systems to rival the Wii’s technology, which has always been considered more family friendly and easy to use.

This holiday season, Sony and Microsoft are offering the most games ever for the Move and Kinect, respectively. Microsoft will have 75 new Kinect games available for the Xbox this holiday, four times last year’s number. Sony said the PlayStation Move is expected to launch 26 titles.

In addition to being used to play games, the consoles are turning into entertainment systems for the living room.

It started with the ability to use the Internet-connected boxes to stream Netflix to TV screens. Now the consoles are turning into media hubs, playing video, music and other content that is readily available over the Internet.

Microsoft and Sony have made entertainment a particular focus between their respective online networks, Xbox Live and PlayStation Network.

Microsoft will make a huge push on Dec. 6, when it rolls out a free update to Xbox Live. Users will be able to conduct a Bing search to find games, music and video across several providers. To make it even more family friendly, the Xbox Live user interface will be controlled with voice commands, rather than by the game controller.

By the end of the year, Microsoft expects that nearly 40 TV and entertainment providers — including Comcast, Netflix, Hulu, ESPN and HBO GO — will be available on its system.

All of these reasons added up could keep the pedal on the gas for what in any other segment would be considered ancient technology.

In an interview, John Koller, director of marketing for Sony’s PlayStation, argued that there’s a lot left in the current generation of consoles.

As an example, he said its predecessor, the PlayStation 2, is 12 years old, but continues to be used in homes around the U.S. as a game player and DVD player. Similarly, the PlayStation 3 substitutes as a Blu-ray player.

Overall, the PlayStation 2 ended up reaching nearly half of all U.S. households.

If that can be used as a guide, then the PlayStation 3 still has a very long way to go. In fact, the goal may be unattainable if new hardware is coming around the corner.

To date, Sony has sold 18.7 million PlayStation 3’s in the U.S. That makes up just a fraction — less than 17 percent — of the 112.6 million households, according to the most recent U.S. Census Bureau figures.

“We are nowhere near where we could be,” Koller admits.

Next year, the true testament will be how the hardware sells as we get closer to the release of Nintendo Wii U and consoles.

The gory first-person shooter has managed to outsell all movies, books and videogames during its initial debut.

It even surpassed last year’s release of Call of Duty: Black Ops, which grossed $650 million, and Call of Duty: Modern Warfare 2, which sold $550 million.

In an interview, Activision Blizzard’s CEO Bobby Kotick told AllThingsD that the game’s entertainment value compares well against other more accessible media options.

“I don’t think we have empirical evidence to support this, but the cost per hour is a lot lower than any form of entertainment,” he said. “In this difficult economy, you are getting a great value.”

The latest installment, called Modern Warfare 3, retails for about $60 and is available on the Nintendo Wii, PlayStation 3, Xbox 360 and for the PC.

He said for that price, you get a social experience because of the multiplayer capabilities; a cinematic experience with good imagery and a story line; and an interactive experience. “It touches on all of the compelling areas of entertainment,” he said.

Activision is claiming that the Call of Duty franchise is one of the most valuable entertainment properties worldwide, having exceeded $6 billion in revenue over its lifetime. At that level, Kotick says, it is up there with “Star Wars,” the Harry Potter franchise, and maybe “Lord of the Rings.”

In its first day on the market, Activision sold more than 6.5 million units in North America and the United Kingdom at an estimated sell-through rate of more than $400 million.

It’s competing against a number of blockbuster first-person shooters that are being released this winter, like Electronic Arts’ Battlefield 3, which came out late last month. That title sold five million units during its first week of sales.

Not only is Call of Duty a big revenue hit, but it’s also likely sucking away time spent on other media.

According to Microsoft, more than 3.3 million unique gamers logged seven million multiplayer hours with the game by the end of Nov. 8, the first day it was available. At one point, more than 3.3 million concurrent users played the game on Xbox Live.

A companion social network for the game, called Call of Duty Elite, is being sold separately for $50 for premium access.

Kotick said Activision will release more information about sales on that soon, but “the response has been much higher than we anticipated.”

Vita, the upcoming handheld device, is hoping it’s in a class of its own, says John Koller, Sony’s PlayStation director of hardware marketing.

It better be.

In the three years the device has been under development, smartphones and tablets have become mainstream and the need for dedicated portable gaming devices has been weakened.

And if Nintendo’s 3DS is any indication, Vita’s prospects aren’t good. The 3DS struggled after missing the holidays last season, and Nintendo was forced to cut the price drastically almost immediately.

“This is a larger game experience. We think we are insulated from the competition,” Koller said. “We love mobile games. Mobile and tablets games are additive.”

As an example, while an HD game on the iPad is large, a game on the Vita could range from 2GB to 4GB. That would take up a substantial amount of the iPad’s memory, and take an awful long time to download.

The horizontal device is large and fits in your hands comfortably.

There’s a touchscreen on the front and a touchpad on the back, there are both forward-facing and rear-facing cameras, there are dual analog sticks to support first-person shooters, and there’s integration with the PS3, which will allow game makers to provide the ability to start playing the game on the console, leave the house and pick up where you left playing on the Vita. If developers allow it, users will also be able to stream games that they bought for the console to their handheld using Wi-Fi.

The Wi-Fi version starts at $249 and the 3G version costs $299, not including a data plan with AT&T.

As with any new connected gaming device, it will also experiment with things such as augmented reality, social features — such as Twitter and Facebook integration — and location-based services.

Koller described the demand as robust. Of the current PlayStation Portable owners, 60 percent have said they will upgrade in the next 18 months, and of the console owners, 63 percent said they would buy one. Of course, those two markets have a lot of overlap.

Initially, the device was expected to come out before Christmas, but after it was announced at E3 in June it faced delays. Recently, Sony announced it would come out in Japan first, and then hit the U.S. and other areas on Feb. 22.

Koller said the delay was due to meeting demand and that pre-orders are “substantial.”

He added, “We’ve increased production materially since E3. We learned our lesson to make sure you have enough product.”

Koller argues that the PSP launched in March 2005 and it still sold one million units in the first week, so missing the holidays is not detrimental.

He believes with more than 100 substantial games in development worldwide, there will be plenty of reasons for people to buy it right away. That’s where the Nintendo 3DS faltered: Not enough 3-D games at launch to justify buying it.

Today, Sony is announcing a special bundle that will launch a week early for those who are particularly anxious to get their hands on the device.

The PS Vita First Edition Bundle will be available for pre-order starting today. For $350, consumers will get the 3G version of the device, a 4GB memory card, a travel case, and the game, Little Deviants. The devices will be available for pick-up on Feb. 15.