The Kyoto-based videogame maker also offered an even bleaker outlook for its full-year earnings for the year to March, saying Thursday that net losses will be three times greater than its projections in October as valuation losses on foreign-currency holdings from the strong yen continued to swell.

Read the rest of this post on the original site »

Nintendo Wii U
The gaming company didn’t have a spot on the show floor at CES, but Nintendo offered private demos of its upcoming Wii U console, the successor to the popular Nintendo Wii.

The “new Wii” comes with a 6-inch tablet-like motion sensor control that offers a full touchscreen and alternative views of the game being played on the TV set. While using a larger controller to play games might seem cumbersome at first, the interactive options it adds can be fun. The new console also works with the standard Wii controllers, as well as the Wii Nunchuk and Balance Board. It supports 1080p HD output, and the games in the demo were remarkably crisp and clear.

But there are still more questions than answers about the Wii U. Its launch date is still pegged to sometime in the later part of the year, but exactly when and how much it will cost is still unknown. And while Nintendo was the front-runner in motion-sensor gaming with the Wii, Xbox Kinect, in the meantime, has been setting new gaming-console standards with its gesture-control technology, content partnerships and even basic voice command.

When asked about content partnerships in the works, Nintendo declined to comment on any specifics. As for voice-recognition technology, Nintendo also declined to say whether it would be added to the Wii U prior to launch; the company did point to some audio capabilities built into the tablet-like controller, and said it is exploring all kinds of possibilities right now.

Samsung Dual-View 3-D OLED TV
That’s quite a mouthful for a television set, so let’s simplify it: This is a TV that lets you watch two programs at the same time on the same screen — and not by creating separate boxes within the screen. Instead, users wear active-shutter 3-D glasses, and each wearer has a different 2-D image projected to them, or even a different TV show or movie.

What about audio, you ask? Good question: The audio for each program is streamed right through the glasses, so you’ll hear your own program, while your significant other sitting on the other side of the couch will hear his or her choice of entertainment.

A dual-view screen has a certain appeal for gamers, and both Sony and LG have introduced such screens for gaming purposes.

For the average TV watcher, this is notably both high-tech and isolating.

LG’s Blast Chiller
You might have heard about this one by now. We still think it’s cool, no pun intended.

It was apparent at this year’s CES show that appliance makers think we want fridges that tweet and washing machines that send messages to smartphones when the laundry is done. While interconnectivity within the home is still in its teenage — if not even earlier — stages, there was one feature of LG’s refrigerators that seemed quite smart: The Blast Chiller is a compartment that chills cans of soda or beer in about five minutes, and can cool down a larger bottle of wine in about eight minutes. It will be available in LG’s new line of refrigerators — price is unknown, but current models cost around $2,500. The Blast Chiller was definitely a favorite with conference-goers — likely because, by the end of the week, many may have wanted a cold beverage.

Corning Gorilla Glass, the Sequel
You might wonder where glass fits in at a tech show, but this isn’t just any soda-lime glass: It’s the ultra-thin, chemically strengthened Gorilla Glass that forms the displays of many smartphones and tablets, and even coats some laptops. Last week, Corning showed off Gorilla Glass that was 20 percent thinner and just as durable (which I was unable to break with a metal stick, as you can see from the photo here, although you might not want to use my arm strength as your gauge).

Gorilla Glass can be used to create stronger, brighter product displays, the company said. Last year, Corning had also said that it believed the future of glass was “3-D” or flexible glass that can be used in different form factors, including keyboards and kitchen countertops. At CES, the company showed how Gorilla Glass 2 can be used in home appliances and dashboard display systems.

Sleeper Pick: “The Patch”
As anticipated, armbands, accelerometers, exercise gear and health-and-fitness-focused apps dominated the digital-health section of CES this year (and even Jawbone’s UP armband made an appearance). But if you’re not ready for a full-time commitment to some of these devices, BodyMedia and Avery Dennison have come up with a temporary adhesive patch to test your resolve. Meant to be worn on the back of the left tricep for up to seven days, the patch combines the sensors of BodyMedia armbands with Avery Dennison’s wearable tech to aid in weight-loss management.

The patch is still awaiting U.S. regulatory clearance, so it may not be available until the third quarter of the year, or later. I’m told it will be less expensive than BodyMedia’s armbands, which run from $150 to $179 (and now work in conjunction with a new digital-wellness platform from fitness guru Jillian Michaels.)

But in future-form, a potentially inexpensive, disposable patch that has some of the same sensory capabilities of an armband could be an interesting fitness “gadget”: Slap it on, forget it’s there while you exercise, save the data and throw it out.

(Blast Chiller photo courtesy of Flickr/LGEPR)

MORE CES NEWS:

• Complete coverage
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• Walt Shows Off CES Gadgets for Fox Business News (Video)
• What Kind of Web Video Plans Does Sony Have? (Video)
• Fujitsu Seeking Way Into Crowded U.S. Smartphone Market
• Why Rhapsody Is (Probably) Bigger Than Spotify — In the U.S.
• Microsoft Beefing Up CeBit Presence Even as It Pulls Back on CES
• Inside the CES Lost & Found
• FCC Chairman Has New Tablet, but Same Script: More Spectrum!
• Verizon Wireless: We Want to Connect Five Devices for Every Subscriber
• Ultrabooks From HP and Lenovo That Are (Kinda, Sorta) Different
• Walt and Katie Take a Tour of CES (Video)
• Schmidt-Storm Alert: The Google Chairman Didn’t Like Your Question
• T-Mobile Expands Bobsled Messaging Service
• Intel Shows Just How It Plans to Get Into Phones (Video)
• Motorola CEO: We’re Going to Release Fewer Phones This Year
• Kinect Helps Keep Aging Xbox at the Top of Its Game
• More From T-Mobile CEO: On Pricing, LTE and That Ever-Elusive iPhone
• Exclusive: New Boss Acknowledges Windows Phone Still Has “Awareness Problem”
• And You Thought Jawbone UP Was Going to Miss the CES Party!
• Interview: T-Mobile CEO Says No Second AT&T Deal Out There
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• Why the Future of TV Won’t Be Here Soon
• Nvidia’s Tegra 3 Tries to Save Battery in All Sorts of Different Ways
• Dynamic Dual Coverage: Ballmer’s Last Act in Vegas and the BCS Championship in 3-D
• Microsoft Phoning In Its Last CES Keynote
• Myspace — Yes, Myspace — Says It’s Going to Sell You Web TV
• Samsung Unveils “Super” 55-Inch OLED TV
• Nokia Unveils That LTE Windows Phone It’s Been Dying to Share
• Steve Ballmer Gives Ralph De La Vega a Very … Vigorous Greeting (Video)
• Interview: AT&T’s De La Vega on LTE, Tablets and Life After T-Mobile
• AT&T’s De La Vega: Shared Data Plans Still in the Works
• LG: 55-Inch Glasses-Free 3-D Screen Is on the Way
• LG Pushes 4G Smartphone Through Verizon: The LG Spectrum
• Live: AT&T’s Vegas Act Stars LTE and, Making Her Return to the Stage, Nokia
• CES Notebook: The Constant Search for Power and Vegas’ Worst-kept Secret
• Belkin Bringing Mobile TV to Lots of Cellphones, Will Anyone Tune In?
• Acer Introduces “World’s Thinnest” Ultrabook and a “Me-Too” Cloud Service
• There Better Be Some Cool Stuff at CES, Because CE Holiday Sales Data Bytes!
• CES 2012: Snooki and Bieber Are In, Gaga Is Out!
• Coming to a Smartphone Near You: Gorilla Glass 2
• RIM Hopes Next PlayBook OS Will Impress at CES
• Ultrabooks, the Ultra-Fancy New Name for Laptops
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• Intel to Detail Its Phone Plans at CES Next Month
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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

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.

MORE CES NEWS:

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• Walt Shows Off CES Gadgets for Fox Business News (Video)
• What Kind of Web Video Plans Does Sony Have? (Video)
• Fujitsu Seeking Way Into Crowded U.S. Smartphone Market
• Why Rhapsody Is (Probably) Bigger Than Spotify — In the U.S.
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• Verizon Wireless: We Want to Connect Five Devices for Every Subscriber
• Ultrabooks From HP and Lenovo That Are (Kinda, Sorta) Different
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• Motorola CEO: We’re Going to Release Fewer Phones This Year
• Kinect Helps Keep Aging Xbox at the Top of Its Game
• More From T-Mobile CEO: On Pricing, LTE and That Ever-Elusive iPhone
• Exclusive: New Boss Acknowledges Windows Phone Still Has “Awareness Problem”
• And You Thought Jawbone UP Was Going to Miss the CES Party!
• Interview: T-Mobile CEO Says No Second AT&T Deal Out There
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• Why the Future of TV Won’t Be Here Soon
• Nvidia’s Tegra 3 Tries to Save Battery in All Sorts of Different Ways
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• Microsoft Phoning In Its Last CES Keynote
• Myspace — Yes, Myspace — Says It’s Going to Sell You Web TV
• Samsung Unveils “Super” 55-Inch OLED TV
• Nokia Unveils That LTE Windows Phone It’s Been Dying to Share
• Steve Ballmer Gives Ralph De La Vega a Very … Vigorous Greeting (Video)
• Interview: AT&T’s De La Vega on LTE, Tablets and Life After T-Mobile
• AT&T’s De La Vega: Shared Data Plans Still in the Works
• LG: 55-Inch Glasses-Free 3-D Screen Is on the Way
• LG Pushes 4G Smartphone Through Verizon: The LG Spectrum
• Live: AT&T’s Vegas Act Stars LTE and, Making Her Return to the Stage, Nokia
• CES Notebook: The Constant Search for Power and Vegas’ Worst-kept Secret
• Belkin Bringing Mobile TV to Lots of Cellphones, Will Anyone Tune In?
• Acer Introduces “World’s Thinnest” Ultrabook and a “Me-Too” Cloud Service
• There Better Be Some Cool Stuff at CES, Because CE Holiday Sales Data Bytes!
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• Coming to a Smartphone Near You: Gorilla Glass 2
• RIM Hopes Next PlayBook OS Will Impress at CES
• Ultrabooks, the Ultra-Fancy New Name for Laptops
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• Intel to Detail Its Phone Plans at CES Next Month
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The twist is: Pop Cam uses a Webcam to identify where players’ mouths are. So in order to play, you’re actually wildly waving your fly trap around like an idiot. It’s great.

Yes, Pop Cam is an ad. It’s also a lightweight augmented reality experience that feels like playing Wii or Xbox Kinect. Pop Cam promises that it doesn’t capture video of people playing, but if I were the folks at Orville Redenbacher’s or Possible Labs I wouldn’t have enough willpower not to file away the tapes for later blackmail.

They did encourage me to save a picture:

Also, I posted this video before, but it bears repeating. The Android game Ant Smasher is kind of like Pop Cam for frogs — only more dangerous:

That’s in spite of Zynga, the rising star of social gaming, garnering much of the media’s attention last week, when it raised $1 billion in its initial public offering.

In November, Nintendo’s portable handheld, the 3DS, had its biggest single month of sales, representing an increase of more than 215 percent over the previous month; it has now sold nearly 2.5 million units since launch.

The Wii had its biggest Black Friday ever, with more than 520,000 units sold — six years into the console’s life.

The Japanese company also set a software record. Super Mario 3D Land, which was released Nov. 11, is now the fastest-selling portable Super Mario title in U.S. history, and Mario Kart 7 was the fastest-selling Mario Kart game.

In an interview with AllThingsD at the company’s U.S. headquarters in Redmond, Wash., Nintendo’s North America President Reggie Fils-Aime explained what’s driving strong holiday U.S. sales this year, and what’s on the horizon for the maker of games and hardware.

He also left the door wide open for Nintendo to experiment with new business models, including free-to-play or subscription, although he questioned the long-term prospects of social gaming companies, like Zynga.

Here’s an abbreviated version of our chat:

AllThingsD: It seems videogame sales this holiday kicked off with a bang.

Reggie Fils-Aime: We had a strong Black Friday for both our Wii and 3DS business.

The time frame from mid-November until the end of the year is critically important to us, and is driven by a number of software and hardware initiatives.

For the 3DS, we launched Super Mario 3D Land in November. It had the fastest sell-through for a handheld Super Mario game. That gave us a lot of momentum going into Black Friday, and right after Black Friday, we launched Mario Kart 7, which ended up being the fastest-selling Mario Kart, as well.

Together, that propelled our 3DS business. We’ve sold through more 3DS’s in eight months time than the original DS sold in the first 12 months. Our handheld business has a lot of momentum right now.

But it took awhile to get there?

What’s interesting is that we had a very good launch. The first week sales [of the 3DS] were fantastic. The initial rush of sales was really strong. But what happened after that in the spring and early summer time frame is — that’s when sales slowed down a little bit.

It was driven by not having great first-party software, and we were late in bringing some of the online functionality to the 3DS, and that’s when sales began to fall.

That’s when we took drastic action to reduce the price, right after the launch of The Legend of Zelda: Ocarina of Time 3D. Our bet was to regain momentum and make the holidays strong. We are having a strong holiday.

A lot of retailers were concerned that we would see a Black Friday rush and then things would trail off after that. Is that what you are seeing?

We haven’t seen that. We have seen things accelerate as we’ve gotten closer to Christmas Day itself. We are anticipating this week, across all of our businesses, will be the strongest sell-through week of the year.

What about the Wii?

The Wii had a strong Black Friday, too, driven by strong retailer promotions. This was our sixth Black Friday, and it was the best Black Friday week we’ve seen to date, so we’ve had very positive results.

It’s driven by software, and in this case, a new Legend of Zelda: Skyward Sword. It’s a game that’s been recognized by the gaming press to be one of the best games of the year.

The momentum continues for our Wii business, and sales are right on objective.

How does it continue to break records six years in? That’s baffling.

It’s because, even today, the Wii provides a family experience that you can’t get anywhere else. I love the stories I hear of grandparents playing with parents and with the grandkids.

Those are experiences that you can’t get elsewhere. That’s why we continue to break records. Plus, this holiday is the first holiday that it’s available for $149 or below. It’s reaching a whole new demographic that’s wanted to buy in, but couldn’t do it before.

And for consumers, there’s over 1,000 games that have been published, so the breadth of the gaming experience is extremely wide. The Wii continues to be the fastest-selling home console ever in the history of the gaming industry in the U.S.

Does that change as we get closer to the next-generation console, the Wii U?

The market is going to continue to differentiate based on the types of experiences that consumers want. As an example, if I’m the head of a household of a family of four, and my disposable income is $50,000 to $60,000, I’m going to continue to look at the Wii because of the software, and it’s a great entertainment device. For consumers who want to have the latest gadgets and have a higher disposable income, that’s for the Wii U.

We haven’t announced pricing or availability or any other details, but given the current pricing of the Wii, it’s not going to be there.

We’ve been very clear, the market is going to decide how long these products will coexist side by side. Our goal is to launch the Wii U and drive it into the marketplace, but it will speak to a different consumer than the one that is buying the Wii today during the holidays.

What about the other consoles? Both Sony’s PlayStation and Microsoft’s Xbox are about the same age.

All of the competitors haven’t talked about what’s next for them, and given the investments they’ve made in their technologies, for them to move to new systems — at least on the same timing we want to move at — would probably be pretty challenging. But in terms of what they are going to do, when they are going to do it, you’ll have to talk to them.

What do you think of Microsoft’s move to make the Xbox the entertainment hub of the living room?

In the end, the consumer decides what equipment to have in the living room. The interesting thing we’ve found — because of the family entertainment we provide, and the inclusion of Netflix — the vast majority of Wiis are set up on the main TV in the living room.

Are you considering adding more content like live TV or movies?

If the consumer wants live TV, they can get it through the options they have today. We always ask the question, ‘What can we do that’s new and provocative?’ And we will continue to think of new and provocative experiences for the user.

I’ve spent the past week covering Zynga’s IPO. What’s your perspective on social gaming?

What’s the share price? It will be interesting when it breaks below $9 … I have a couple of thoughts on social gaming.

Consumers want to be entertained in a variety of ways, like watching TV or reading a book. The thing about entertainment — as consumers have a range of experiences — their desires for what’s new continues to be pushed out. So delivering the same experience all the time … consumers will move on.

So when I look at gaming experiences on social networks, there’s a variety of entertainment value. Some are strong, some are not. But in the end, how will they evolve? Doing the same thing over and over again is no longer fine.

Is that really fair when you have Mario Kart 7 coming out?

We continue to evolve the experience by providing a level of customization that’s new, or different ways to race with a sail and a propeller that allows you to drift under water. What we’ve done with Mario Kart 7, for some of the tracks, you can actually win when you go off the track, which never existed before. We’ve continued to make it more fun and add more enjoyment for the consumer.

You don’t see that innovation happening in social gaming?

The companies that will win in the social gaming space need to show an ability to provide the new and different experiences, and a way to monetize it. In the end, these are businesses that need to make money.

Is that your comment on the free-to-play model? Will you experiment with free-to-play?

I have two comments on that.

First, we make games for Nintendo devices, and that is a competitive advantage for us. You can only play Mario on a Nintendo device, so from that standpoint, I wouldn’t expect to see our franchises on other platforms, and I would argue Facebook is a platform.

My second point, on whether we will experiment with other forms of monetization?

Certainly.

How that comes about, or which ones we do first, that’s all experimentation that’s going on right now in our various studios.

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 sharp earnings downturn is the latest problem facing the Japanese videogame maker, which is struggling to keep pace with a technological sea change that threatens to alter how consumers play video games, while grappling with the twin cocktail of a soft global economy and a strong yen that is hammering Japanese exporters.

Read the rest of this post on the original site »

On sale Oct. 16, the game, called Skylanders: Spyro’s Adventure, represents a major deviation from the company’s hugely successful war-based Call of Duty.

The game melds physical toys with videogames by using a “portal,” which is plugged into the console. Once an official Skylanders toy is placed on the portal, the character transports into the game and comes to life on the screen.

The game is similar to one announced recently by Disney that uses miniature toy cars and an iPad. In this case, kids place the physical toy on the iPad’s screen to interact with the game, which is based on the movie “Cars 2.”

Eric Hirshberg, CEO of Activision Publishing, told me in a phone interview that Skylanders has “got a couple real innovative stories to tell.”

Not only does the game enable physical toys to come to life inside of a virtual world, Hirshberg said, it also can be played cross-platform. “The toys travel from console to console and to the Web, and they remember everything that happens to them,” he said.

That means a child’s chosen character will remember what level it has attained and transfer that information from the player’s Nintendo Wii to an Xbox or Sony PlayStation at a friend’s house. Players will also be able to pick up where they left off on Android, iOS, Nintendo’s 3DS and online.

“If you play on your Wii and level up to 10 and then go to the Xbox, those all go with you,” Hirshberg said. “And then, on a road trip, you can log in to the iPhone version and the same thing happens.”

Skylanders: Spyro’s Adventure will have more than 30 different characters.

The plot is about a mysterious world that has been taken over by a sinister Portal Master known as Kaos, who has frozen the Skylanders as toys and banished them to Earth. The players are charged with helping to return these heroes back to their world.

In a release yesterday, Activision said the games would be on display in Toys“R”Us as soon as this weekend, to get the buzz started ahead of the holidays.

Toys“R”Us Chairman and CEO Jerry Storch said, “We believe that the product line will be one of this holiday’s hottest gifts, and we can’t wait to offer customers a one-of-a-kind way to discover Skylanders at our stores.”

A $70 starter pack includes a copy of the game (on PlayStation 3, Xbox or Nintendo Wii), three Skylanders characters, the portal of power, a character poster, trading cards, stickers, Web codes and batteries.

Sitting down to chat last year with Amazon.com Inc.’s Chief Executive Jeff Bezos, television host Charlie Rose announced that the two would discuss “the Kindle,” Amazon’s e-reader. But throughout the interview, Mr. Bezos repeatedly dodged the word “the,” saying how “Kindle is succeeding,” that “Kindle is a companion to tablet computers” and touting how many e-books are “available for Kindle.”

Mr. Bezos is part of a growing cadre of marketers who conscientiously object to using articles — the tiny English words “the,” “a” and “an” that typically precede many nouns.

Nintendo Co.’s website shows gamers “what Wii is all about.” As far back as 1984, Apple Inc. said in a commercial that it would “introduce Macintosh.” Today, an Apple video enthuses: “There’s never been anything like iPad.” Some companies make the drop official. Research In Motion Ltd.’s style guide specifies that “BlackBerry” should be used “as an adjective and not as a noun or verb.” An unacceptable usage, it says: “the BlackBerry.”

Read the rest of this post on the original site »

But never fear, better times await. The next four months will generate more than half of the industry’s sales that are made at retail, which could be more than enough to bring things back in line with last year’s performance.

The NPD Group today released its assessment of retail sales in August, which does not take into consideration electronic or other digital channels where games are sold.

NPD analyst Anita Frazier said almost everything related to games — software, hardware and accessories — declined in August, compared to the same month a year earlier. The one exception was portable game sales, which were driven by sales of Nintendo DS and 3DS software.

Price cuts benefited both Nintendo and Sony.

Sony trimmed the price of the five-year-old PlayStation 3 to $250 from a previously recommended price of $300, while Nintendo slashed the price of the struggling 3DS by $80, after the glasses-free 3-D handheld device had been on sale for only four months.

Nintendo said about 185,000 units were sold after the price reduction on Aug. 12, an increase of more than 260 percent during the comparable 19-day time period in July. During the entire month, the company sold 235,000 3DS game devices to outsell the original Nintendo DS, which still managed to sell 165,000 in August.

The PS3 price cut also allowed it to drive a notable uptick in sales year over year.

Xbox continues to maintain its lead over other consoles in the market, selling 308,000 units in August, which means it has outsold any other console maker for 14 of the past 15 months in the U.S.

In August, total U.S. game sales from retail, including all hardware and software, was $669.9 million, falling 23 percent from $873.8 million a year ago. Software sales in the period were hit the hardest, recording a 34 percent drop to $264.8 million from $403.5 million a year earlier.

Frazier attributed the bulk of the decline to Electronic Arts shifting the release of its latest Madden football title from August to September. The game launched on Aug. 30, which falls within NPD’s September 2011 reporting period.

Otherwise, the best-selling game in August was Square Enix’s Deus Ex, followed by EA’s NCAA Football 12 and Activision’s Call of Duty: Black Ops.

Frazier added that the rest of the year could more than make up for the softness seen in 2011.

“Even though year-to-date performance of the new physical portion of the industry is down 5 percent, more than half of industry sales in this channel are still to be realized in the back four months of the year,” she wrote. “Given the strong release schedule in the coming months, new physical retail sales could still be flat to slightly up once full-year sales are tallied.”

Here’s the first part of my interview with Nintendo’s Global President Satoru Iwata from E3, where he discusses — through an interpreter —  the successor to the original Wii, called the Wii U.

He not only tells me that the devices have higher-end components, capable of displaying hardcore games, but that the controller’s 6.2-inch display will attract a very wide audience of people looking for a casual way to connect to the Internet.

Stay tuned for the second part of the interview, where Iwata explains why Nintendo will continue charging for its games and not get caught up in the the frenzy to release free-to-play games. (Update: Here is a link to the rest of the interview.)

Let’s get started by talking about the Wii U. What does it accomplish for the company?

We consider the Wii U the next step for the Wii … By that I mean, the mission this time is that we would like to transform the relationships between the family, the video game and the Internet into a new shape. Many things can be changed with the introduction of the Wii U into the household, especially how video games want to be played, how people are going to watch TV, and how the relationship with the Internet and family members will be changed.

The Wii U represents a big shift from casual and family-friendly gaming that Nintendo is known for to hardcore gaming and first-person shooters.

In the case of the original Wii, our intent was to extend the gaming population, but of course we needed to think about how we were going to motivate non-gamers to play with video games, so we came up with Wii Sports and Wii Fit, as well as how the Wii system was designed.

For example, in the case of our products, approximately 50 percent of our users are a female audience, the other platforms are around 30 percent.

So, the Wii has already achieved very impressive things, but there were two things we were not able to realize: We could not keep up with the hardcore gamers and the Wii original was not compatible with HDTVs.

This time around, Wii U is compatible with HDTV, so we now expect the Wii console to be as powerful as any other console and all the necessary buttons are there [Iwata holds the new controller and demonstrates its use].

When we approached the third-party publishers to tell them about the Wii U, all the publishers volunteered to make advancements in the field of shooting games that they are very good at. For example, ordinarily when you are playing a shooter type of game, your main TV screen is the battlefield; however, oftentimes you have to open a new window to select items or weapons or to see the entire map.

But you don’t have to do that anymore with Wii U because you’ll have a screen that will show you that information.

But this is just one of the roles. It will also have another mission, as well. By having another screen, we believe it will pave a new way in the opposite direction to attract the non-gamers today. It’s no denying that we’ve expanded the so-called gaming population, but there’s still a number of people that have yet to be interested in the Wii at all, even after we introduced them to such applications as Wii Sports and Wii Fit.

Even those people, we want them to utilize Wii U one way or another.

For example, there’s video chat or they may want to do Web browsing while watching the screen on the big TV and managing operations with the screen in your hands.

For the past decade or so, many attempts have been made to link the TV and the Internet, but so far, nothing has been popular. So, the PC is still the strongest device to take advantage of the Internet, and now increasingly smartphones and tablets.

The ordinary TV sets in the household are located 10 feet away from yourself, and so it’s not the optimal solution to see the small letters of the Internet. You may also have problems with inputing and browsing.

On the other hand, when you look at this controller, it’s one foot away from your eyes — it has almost the same distance of the PC and other smartphones. In other words, this device is capable of handling such activities for you to input the letters in the palm of your hands.

In the future, if the TV and Internet can be used together, the TV will have a remote with a screen — and it will look very similar to how the Wii U controller is today.

So, the Wii U is the TV remote of the future?

Yes.

While on one hand we are trying to reach out to the hardcore gamers, we are also trying to make something that can be used as the TV remote of the future. The point is we are trying to reach out to both directions at the same time with the Wii U.

So, do you see the audience continuing to be 50 percent women?

A number of the videogame genres will be for male audiences, and the male audiences will increase, but on the other hand, this device is capable of many other things. On this device you can see video streams of Netflix, or you can use in conjunction with the TV. Regardless of the gender, you may want to use it … Our hope is it will be equal number of males and females who will be interested in this device.

After you announced the Wii U, I wrote that you are competing for time spent on the living room couch — whether someone is using their laptop, or using a tablet to Skype, or playing a game on the phone. Is this a response to trying to take couch time back?

I think it’s an accurate and acute insight into the situation.

Our mission is to try to shorten the distance between people and gaming, and in order to do so we tried to remove any possible barriers. If you like to play console games, you have to do so on the TV and you have to change the TV’s input and other things. We wanted to remove even these barriers. One of the ways to take advantage of that is to get access to some game-related information [on the Wii U's tablet]. It’s competition for couch time.

Once again, even though, we used a system that caters to the needs of the most skillful players, we are also trying to reach out to the people who are not interested in video games.

I think that we have been able to reduce a number of issues with this.

Because the Wii U can always be on?

Yes.

Photo Credit: Nintendo.

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• Sony Unveils Vita Gaming Device at E3; Will Launch This Year for $249
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However, those gains are little consolation when you learn that May 2011 was the lowest month of sales for the industry since October 2006. NPD Group, which released highlights for the month today, said the poor performance was directly attributable to a light slate of new releases.

The analyst firm’s figures only represent physical retail sales for hardware, software, and accessories — and not the digital format content distribution, which is currently seeing the most growth.

While Xbox was the top selling platform, it was not the only hardware that experienced gains year over year. So did Sony’s PS3 and PSP.

Meanwhile, May was a slow month for Nintendo. Both sales of the 3DS and the Wii were light. The 3DS could gain momentum as more titles are released that take advantage of the device’s 3-D capabilities, but the Wii platform is expected to continue to sputter for the next year.

At E3 last week, Nintendo announced the console’s successor called the Wii U, which comes with a tablet-sized controller, but is not expected to launch until late 2012.

NPD Group Analyst Anita Frazier reports that combined sales of the PS3 and Xbox 360 are up 28 percent for the month and 21 percent year to date, and that declines in the month of May are mostly attributable to the Wii.

However, the Wii still has the highest install rate in the the U.S. at 36 million, a position that it will likely still hold a year from now — although both the Xbox 360 and PS3 are closing the gap quickly.

As for software sales, which fell 21 percent to $400 million in May compared to the same month in 2010, there are two explanations.

First, there were only 42 new games introduced in May as compared to 58 last May, and 72 in 2009.

Big publishers like Electronic Arts, Ubisoft and Activision have decided to pare back the number of games they are publishing to make higher quality titles that can be more profitable. All three publishers are also creating digital downloads for those titles that extend the life of the games and make more money. Revenue from those downloads would not be reflected in NPD’s figures.

Here’s a list of the top five-best selling games in May across all platforms:

1. L.A. Noire (360, PS3), Take 2 Interactive.
2. Brink (360, PS3, PC), Bethesda Softworks.
3. Lego Pirates of the Caribbean, (Wii, 360, NDS, PS3, 3DS, PSP, PC), Disney.
4. Portal 2 (360, PS3, PC), EA.
5. Mortal Kombat 2011 (PS3, 360), Warner Bros. Interactive.

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• Three Key Takeaways From Nintendo’s Wii U (Plus Photos!)
• No Hacks to Report at Xbox, But Microsoft Isn’t Letting Its Guard Down
• Forget About 99 Cents, What If You Could Rent Mobile Games for 25 Cents?
• Digital Game Revenues Hit $5.9 Billion in 2010

The Japanese-based games company has revolutionized the market before, and after today’s announcement, it’s obvious that it wants to do it again.

Nintendo did not offer any details on price or timing–other than that it will come out next year. But in the presentation this morning and in a hands-on briefing for media following the announcement, we got a good look at some of the Wii U’s capabilities and how it could change the way we play games in front of the TV.

As the major implications of the device are processed over the next year, here are the three major takeaways from today’s announcement:

1. The Wii U marks the entrance of Nintendo into hardcore games:

Up until now, Nintendo has served a family-friendly niche with games like Super Mario Bros. and Zelda. But going forward, it’s branching into its competitors’ territory by making the Wii U hardware capable of supporting HD graphics and hardcore game play.

During the press conference, game publishers said they would support this move by developing hardcore games for the Wii U.

John Riccitiello, the CEO of Electronic Arts, said over the years he’s made several appearances on stage at E3 to support his partners, but this was the first time he has ever done it for Nintendo. “Imagine a shooter like Battlefield with jaw-dropping graphics brought to you on a Nintendo system with a break-through controller,” he said.

Here’s a look at the quality of graphics on the TV:

The Wii U controller also has high-end graphics, too:

2. The Wii U will compete for the iPad’s time:

In many ways, Nintendo is not just competing against Microsoft’s Xbox or Sony’s PlayStation, but any device that people are using in the home while sitting on the couch. The Wii U also offers a competitive response to Apple’s iPad.

The Wii U has a 6.2-inch touchscreen display and a forward-facing camera, and will be used for more than a remote to the videogame console. For instance, users can browse the Internet, draw sketches on the screen with a stylus, play standalone games like Othello, view photos and participate in video chat.

It can also be used with the Wii Fit’s balance board to weigh yourself without ever having to turn on the TV.

Nintendo said the controller is not designed to leave the home and therefore, we surmise, they don’t intend for it to compete against its own portable 3DS gaming device.

Nintendo demonstrates how the Wii U is used for Web browsing:

3. Nintendo won’t stop here. You can bet there will also be a digital strategy:

To be sure, today’s sneak peek was only a glimpse into the future.

Nintendo touched on the hardware capabilities of the Wii U and how it will interact with the Internet, but from what we are hearing separately, there will be a strong digital component.

Riccitiello alluded to it on stage. “We are changing games from a thing that you buy to a place that you go,” he said. “Nintendo’s next platform has deeper online capabilities. This is an unprecedented partnership between EA and Nintendo.”

For perspective, the Wii U tablet is about the same size as an open 3DS:

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Today, it wants to change gaming again by introducing a new console called the Wii U.

The Wii U comes with a touchscreen, tablet-style controller that looks like a mix between clunky handheld gaming systems, like the 3DS, and Apple’s iPad in terms of functionality.

Nintendo did not say when the console will be released or how much it will cost.

In the time since the Wii hit the market more than six years ago, Nintendo has sold more than 47 million consoles in the U.S., making it one of the best-selling videogame systems of all time.

But since then, Xbox and Sony have both brought motion-controlled gaming to the next level with the Kinect and Move, respectively, and sales of Nintendo’s latest handheld gaming device, the 3DS, have failed to impress.

This morning at the Nokia Theatre in Los Angeles, Nintendo is hosting a press conference to announce its plans for regaining its gaming throne in the living rooms around the world. The press conference takes place on the official opening day of E3, the annual event the videogame industry uses to announce its plans for the coming year.

Follow the live blog here for all the details:

8:49 am: Thanks for tuning in. We have another 10 minutes or so before things kick off.

I’m excited about this announcement. Nintendo has a way of shaking things up in the industry, and I’ve seen more than my share of first-person shooters already this week.

Whether the E3 crowd wants to admit it or not, there are more people out there who enjoy playing games–it’s about fun.

8:55 am: Nintendo is entertaining the crowd with trivia on the big screen. What was the first Super NES game to feature Donkey Kong?

9:05 am: Whoa, I didn’t even notice this until now, but in the very front of the auditorium, there’s a full orchestra. Very classy. Looks and sounds like we are about to begin.

9:09 am: We are listening to a full orchestra and choir with scenes from Zelda, which is celebrating its 25th anniversary, playing on the big screen.

Shigeru Miyamoto, the creator of Zelda, has just come on stage.

He’s bringing a translator on stage to help him out.

Last year was the 25th anniversary of Super Mario Bros., this year it’s Zelda’s turn.

Both the games and the music have evolved along with the consoles. He’s been listening to the music for a while now at his office, but to hear it in a hall like this is amazing.

Since we have the full orchestra, why not hear the music live?

First, a chime for getting a prize.

Next, the noise for getting an item.

Now a longer melody from a fairy’s fountain.

9:15 am: To celebrate the anniversary, they are releasing a game for all of the company’s hardware.

Nintendo’s eShop just launched yesterday on the 3DS, but today, you can download the Legend of Zelda: Link’s Awakening.

Next weekend, there will be a 3-D version for the 3DS.

There will also be a free version of Zelda: Four Swords for the DSi, and a version called Skyward Sword for the Wii. Special for the launch of the game will be a gold remote!

Miyamoto says there will also be symphony concerts held around the world to play the original Zelda soundtrack in the Fall. More later on the specific dates. There are also CDs coming of the music.

9:19 am: For the last 25 years, the series has been supported by an incredibly large team, Miyamoto says. Within Nintendo, there are 200 people who have worked on the series.

Miyamoto says several of the people are here today that have worked on the project.

And, of course, he’d like to thank the fans for playing.

Nintendo’s President Satoru Iwata comes on stage.

He says they have been working hard to expand the number of people playing games, but as an industry we haven’t achieved yet a game platform that is equally satisfying for everyone.

This is what we want to create with our new platform.

How?

Two words: Deeper and wider.

He says that they can appeal to a wider audience than even the Wii accomplished. The full details are coming later this morning for the Wii. (The audience says boo, hiss….They don’t want to wait!)

“I think the new platform takes a major step in hitting our goal,” he says, but what about now?

The new Wii is for next year, and they have a bunch of new experiences to roll out for the 3DS, which hasn’t been doing so well, partly because of the lack of games to play.

9:27 am: Welcome to the stage Reggie Fils-Aime.

He asks: Is it possible to deliver something for everyone?

In the same way that’s the goal of the new Wii, this is the goal for the 3DS, he says. We are about to get a sneak peek of new games that will be in 3-D. Although they will only be in 2-D for us in the audience.

First game is Mario Kart.

That will be coming in time for the holidays.

Next game is StarFox 64. In the game, you can either use buttons, or you can turn and tilt the 3DS to navigate through the world.

Additionally, you will be able to use the forward-facing camera to see the face of the friends you are playing and how they are reacting to the game play in real-time.

It arrives this September.

Next up, an all-new Super Mario 3-D that’s been created from scratch for the 3DS. Fils-Aime says, “If it’s true that software sells hardware, it’s also true that Mario has sold a lot of hardware.”

It looks like an all-new Mario, but with plenty of mushrooms and monsters to battle.

The game will hit the market by the end of the year, but oddly no promise of it coming out in time for the holidays.

9:35 am: Another new game is Kid Icarus: Uprising, a fantasy-style game coming soon.

This game will use augmented reality cards to conduct battles.

Next game is Luigi’s Mansion 2. They promise the lovable Italian still has his vacuum to suck up ghosts. It’s not a simple revision, it’s a new game that makes use of 3-D and several new mansions.

9:39 am: Now we are switching gears to see third-party games for the 3DS. In a quick video montage, we see Resident Evil by Capcom, Driver Renegade by Ubisoft, Pac-man by Namco Bandai and many others.

Fils-Aime says that the new browser and eShop downloads that came out this week allow you to get new games. A Virtual Console also allows you to download classic games. For a limited time, they’ll be giving out 3D Excitebike, a super retro title.

But even bigger news: For the first time ever, Pokemon will spring to life in 3-D. The games will come with enhanced Pokedex.

I’m not too familiar with these games, except that I know it’s an essential game that kids play around the world.

Fils-Aime says there’s one more order of business left today.

A proper introduction to a new gaming companion. The name Wii made sense once we started to say it a lot and realized it was all about “we.”

So, today, welcome to the Wii U.

It’s about a system we will all enjoy together and is tailor made for you. (Other word associations: unique, utopia?)

9:46 am: They’ve just unveiled what the new controller looks like, and it’s a tablet!

Use it to draw and sketch with a stylus, or use it to play Othello with a friend, like an iPad.

Use it to play golf. Place it on the floor to see where your ball is lying in the sand trap, and hit it out with the controller in your hand.

Connect a gun accessory to it, to see your target more clearly.

This is wild.

Now we are seeing how you can video conference call with it, like Skype.

The tablet can also be used as a big touch pad remote control for your TV. You can swipe photos off the tablet to land on your TV screen.

9:49 am: The audience goes wild.

The Wii U is like the iPad tied to your TV. The touchscreen has a 6.2 inch display.

The device can also be used without the TV. For example, you can weigh yourself on the Wii Fit Scale just by holding the tablet.

The tablet itself has a gyroscope, a speaker, a microphone and many buttons found commonly on a typical console controller.

But it’s not a portable video game machine, even though it shares some characteristics. In other words, they don’t see it cannibalizing the 3DS.

9:53 am: The Wii U will have a strong connection to the Internet, including browsing the Web on your TV and video conferencing.

But what we haven’t seen a lot of yet is how it will be incorporated into games.

The answer isn’t clear.

We are hearing that there won’t be a shortage of ideas, and that it could be used for numerous ways to play.

There’s a whole interview with Miyamoto at www.E3.Nintendo.com on all the ideas he has on how he believes the new platform could be used.

To kick things off, they are promising there will be Super Smash Bros. for both Wii U and 3DS.

Of course, this is a product for the future. But here in LA, there is software for all of us to test today.

Not sure when Wii U will be released, or what the price point will be.

9:58 am: There will be a handful of interactive demonstrations on the show floor at E3 to show off the system’s capabilities.

10:00 am: Fils-Aime is back on stage to give us a few ideas of the games. There will be Super Mario Me. If you have the new controller, you’ll have a birds-eye view of the birds that are catching you, but you can still play if you have a regular Wii remote.

“What I just described is prototypes, they are not actual games, but one game I can tell you we’ll publish is a new installment of the Lego series called City Stories.”

He says developers around the world see the vast use cases of the Wii U. A bunch of interviews now are playing on the big screen of major game makers, like EA, Ubisoft and Disney.

They are saying that Nintendo has heard the voice of the hardcore game player, who will now be able to play titles, such as DarkSiders, Assassin’s Creed and Ghost Recon, on the Wii U.

10:07 am: If other consoles added motion-controlled gaming to expand its user base to more casual gamers, this appears to be Nintendo’s attempt to attract the hardcore gaming audience.

In a video demonstration, I’m seeing explosions, blood, guts, blasts and lots of shooting and killing.

That’s in stark contrast to the orchestra music we heard from Zelda that welcomed us to the press conference.

10:09 am: EA joins Nintendo on stage. Here comes John Riccitiello, the CEO of Electronic Arts.

“Over the years I’ve made several appearances with our console partnerships, but never before with Nintendo. Nintendo’s new console will have great HD graphics….Imagine a shooter like Battlefield with jaw-dropping graphics brought to you on a Nintendo system with a break-through controller.”

Finally, he says, imagine EA content on a console that can be expanded to mobile and the Web.

“We are changing games from a thing that you buy to a place that you go. Nintendo’s next platform has deeper online capabilities and this is an unprecedented partnership between EA and Nintendo.”

10:12 am: Fils-Aime is back on stage.

The Wii changed gaming, and last year you found out that glasses-free gaming could change 3-D gaming. Now there’s Wii U, a second window into the world of gaming.

If you are here on site, he says you can have hands-on with key new 3DS games. And, then there’s eight new Wii U experiences in the convention center.

10:14 am: For more information, you can check www.e3.nintendo.com.

Let the exploration begin and enjoy the show.

That’s it for the live blog. As a member of the press, I’ll be getting a special hands-on session immediately following the keynote, so stayed tune for pictures and video.

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• At E3, Xbox Lets Kinect Lead the Charge on Gaming, Live TV Ambitions
• Justin.tv Broadcasts Gamers’ Every Move on TwitchTV
• Who Needs War? Sparks Will Fly in EA’s New Sims Game for Facebook.
• Sony Unveils Vita Gaming Device at E3; Will Launch This Year for $249
• E3: Nintendo Unveils the Wii U With Tablet-Style Controller
• Three Key Takeaways From Nintendo’s Wii U (Plus Photos!)
• No Hacks to Report at Xbox, But Microsoft Isn’t Letting Its Guard Down
• Forget About 99 Cents, What If You Could Rent Mobile Games for 25 Cents?
• Digital Game Revenues Hit $5.9 Billion in 2010

At the three-day show, which unofficially kicks off tomorrow and ends Thursday, hardcore gamers will get a preview of all the big-budget productions that will be released in time for the holidays.

But this year, in addition to the regular dose of blood and guts and first-person shooters, expect the videogame industry’s softer side to be on display.

Game companies are starting to recognize that in order to attract larger audiences, they need to appeal to a broader set of people.

The trend is being fueled by Microsoft, Nintendo and Sony, which will be looking for ways to extend the life cycle of the major game consoles, all of which are about five years old now. The shift is also gaining acceptance as big companies are finding large audiences on digital platforms, like the Internet and Facebook.

Ubisoft’s SVP of Sales and Marketing, Tony Key, said they are pushing three things this year at E3: core, casual and online.

It will be talking about a wide range of games, including several Facebook games in the works, hardcore titles like the latest Assassin’s Creed, and casual titles like Rocksmith, which allows players to connect a real guitar to a videogame console to learn how to play the instrument. ”Online is just another point of excitement for the business–it’s just another platform,” he said. “I think this is the best E3 for publishers, like Ubisoft, to showcase how they are viewing the space and what the right strategies are at the moment.”

But while more traditional publishers will be announcing digital strategies, there are some purists in attendance, too. In fact, a contingency of more alternative companies at E3 are jokingly calling themselves “That Other Platform.”

In a message sent to reporters, the companies write:

You’ve been to all the press conferences. Now, please join us as we celebrate:

• the one that DOESN’T have an army of PR people and a $50 million marketing budget.
• the one that DOES have an installed base of greater than 1.5 billion.
• the one that DOES have the world’s best developers.

All jokes aside, the show would not be complete without some hardcore talk. Here’s what to expect on the hardware side of the business:

• Nintendo will unveil its new Wii console on Tuesday.
• Plenty of new games for Nintendo’s recently released 3DS, a handheld game player, which has been slow to take off.
• Microsoft and Sony’s respective motion-controlled systems, the Kinect and Move.
• Sony’s new NGP, which is its latest handheld gaming device coming soon.

This year’s E3, short for the Electronic Entertainment Expo, is the 17th annual event thrown by the Entertainment Software Association, which is dedicated to companies that publish games and develop video game consoles. This year, the association said it is expecting 45,000 attendees and 250 exhibitors at the Los Angeles Convention Center.

One of the companies that will be a prime example of shifting its focus from a hardcore audience to an entertainment focus is Microsoft’s Xbox.

It has sold more than 53 million Xbox 360 consoles and has more than 30 million Xbox LIVE members who access content digitally over the Internet. It has also sold more than 10 million Kinects to date.

Tomorrow at the company’s early morning press conference, it will discuss how its not just a gaming device, but an entertainment hub for your living room.

Already, 40 percent of all Xbox activity is non-game with video with video consumption hitting an average of 30 hours a month per Xbox.

As the console makers run out of new reasons for strict gamers to buy them, diversification is key.

In advance of its press conference tomorrow, Microsoft provide this chart from NPD to show the trend lines for consoles during their lifespan (and how Xbox is doing relatively well because of its focus on entertainment):

GameStop, which has more than 6,000 physical locations, said today its digital revenues jumped 53 percent in the first quarter, compared to the year-ago period. Additionally, it’s on track to hit $450 million in digital revenues this year and $1.5 billion by 2014.

In an interview, GameStop’s President Tony Bartel and CEO Paul Raines explained that they see three sources of digital revenues: mobile; downloadable content to the console; and PC, which includes downloads and point cards for social games, as well as advertising.

To aid in its expansion to digital, GameStop has made a handful of recent acquisitions, of which two have yet to be completed. The acquisition of Spawn Labs will allow it to provide a cloud-based streaming game service–similar to OnLive–and Impulse will allow it to compete with Steam, a streaming service on the PC side.

Bartel said all three areas of digital are growing, but perhaps the fastest is downloadable content for the console, which they are projecting will become a $6.3 billion business in 2014.

He said all of the major game publishers are developing downloadable content that can be sold as add-ons to their packaged goods business, which creates a steady, recurring revenue stream.

Overall, what the two execs said they are seeing is an expansion in the number of people playing games–in other words, digital is not cannibalizing console. In addition to the 100 million homes that have an Xbox, a Wii or a PlayStation, increasingly consumers are playing games on their computer, smartphone or tablet.

The company’s stock reacted positively to the report, nearly hitting a 52-week high after increasing 64 cents, or 2.4 percent, to close at $27.32 a share.

Both its traditional physical-store business and its digital initiatives continue to grow.

“The important thing to know is that we are actually making the market bigger for gaming. We think gaming is a net positive growth activity,” Raines said.

Overall, the company reported a first quarter profit today of $80.4 million, or 56 cents a share, on revenues of $2.28 billion. Profits were up 6.9 percent and revenues were up 9.5 percent compared to the same period a year earlier.

In addition to digital, GameStop also contributed its strong performance, in part, to the launch of Nintendo’s 3DS.

Nintendo said it sold 400,000 3-D handheld game units during its first week in the U.S., but since then sales have lagged. In the first full month the device was for sale, it sold less than 200,000, according to NPD Group.

GameStop said it has roughly a 45 percent market share on 3DS sales, but that it has lower expectations for how the Nintendo product will perform in the current quarter.

The Japanese videogame maker said its net profit for the fiscal year ended March 31 was ¥77.62 billion ($944.5 million), down 66 percent from the year-earlier ¥228.64 billion. Revenue was down 29 percent to ¥1.014 trillion while operating profit was off 52 percent to ¥171.08 billion. Analysts polled by Thomson Reuters had forecast a net profit of ¥142.41 billion and revenue of ¥1.079.

Nintendo also said it plans in 2012 to launch a home console to replace the Wii, which has sold 86 million units since its 2006 debut. The company said it plans to show a working model at June’s E3 Expo in Los Angeles.

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The new offices–still void of any computers, desks or chairs–were decked out with red ambient lighting, a DJ was spinning records and guests snacked on a mix of Seattle and San Francisco food. Sourdough and shrimp!

Pincus addressed the 200 or so attendees in front of an exposed brick wall typical of buildings found in the Pioneer Square neighborhood, and he did his best to woo potential engineers with the offer of a great company culture. He also took the liberty of comparing Zynga to one of Seattle’s biggest success stories: Amazon.com.

First was the employee pitch. Like Zynga’s other 1,500 employees in more than 13 offices worldwide, Seattle engineers and product managers will have a lot of autonomy in a corporate culture Pincus likened to a confederation of entrepreneurs who get to act as their own CEO.

Additionally, he compared the company’s ambitions to Amazon’s.

The analogy was easy to make given his proximity to the retail giant, but also because one of Amazon’s first VPs of engineering, Neil Roseman, will be the Zynga VP in charge of building the Seattle office.

However, it was mostly Zynga’s bigger goal that he was referring to.

“Amazon built shop….We want to build play. If we do our jobs right, playing games with your friends will be simple,” he said.

With popular Facebook titles such as FarmVille, CityVille, Zynga Poker and Mafia Wars, Pincus said, roughly 250 million people play Zynga games on a monthly basis. In all, they generate five terabytes of information a day, up from one terabyte a day five months ago. The number of social connections the players have made has soared to eight million from three million in the same time period.

In an interview after his general remarks, Pincus contended that talking about play instead of games changes the social stigma. “If you spent part of your day playing games, people might think you’ve wasted your time. But if you said you spent your day playing, people are envious,” he said, noting of the old saying, “It’s all work and no play. Not, all work and no games.”

The idea goes beyond Amazon’s association with shopping. Google has an association with search, Facebook with share, and YouTube with watch. “[Play is] one of the verbs I’d bet on,” he said.

So, how big is playing?

Pincus estimates that it’s massive.

There will be four billion devices that will be connected to each other through social networks, and half of them will engage in play. “We are very optimistic with where play will go in the future.”

However, as the industry matures, there’s a natural contradiction taking place. The simplicity of Zynga’s games made it easy for a wide audience to play (not just core gamers). But as those players develop and sharpen their gaming skills, Zynga and other social-game makers will be challenged to create more complex quests to keep them entertained. By introducing more difficulty, it will inherently narrow the company’s audience.

“Yes, that’s a challenge,” Pincus said. “But great games are Shakespearean. They should be all things, to all people.”

He argues that one game should be enjoyable for his niece, nephew and himself simultaneously. But that has been the challenge for the game industry. Companies end up catering to the audience that is the most vocal and spends the most money. That’s why the console game business trends toward hardcore gamers.

“It becomes harder and harder,” he said.

However, there are exceptions. Nintendo developed something that no one knew they needed or wanted, and, he said, Apple’s Steve Jobs constantly comes up with products people want, as opposed to giving them what they asked for.

“No one was screaming for the Wii,” he said, but now you see grandmothers Wii bowling with their granddaughters.