E3 2010 Preview

E3 always unites the industry. All eyes are on Los Angeles, for the biggest event in the gaming calendar to see signs of hope and a glimpse at where we are heading.

The 2009 show carried the burden of returning this spectacular showcase to its former glories after a few quieter years. With the glamour now recaptured, the 2010 expo is under even more pressure: it has to show where gaming can go with tighter budgets and a lack of new consoles – something we would traditionally be expecting by now.

Last year’s E3 was a return to the excitement and energy that defines our industry,” says Take-Two’s CEO Ben Feder. This year, we’re expecting even more and hope that the show will help to re-energise the industry.”

Ubisoft’s UK marketing director Murray Pannell agrees: The show itself seemed to get back to its best last year, and I’d hope that it continues. The industry needs to show new, exciting and innovative products – stuff that really captures the imagination and gets consumers clamouring for more.”

It doesn’t help that the games industry has endured a tough twelve months. The market value has dropped, sales are fluctuating and even a blockbuster Q1 didn’t quite deliver.

With the after-effects of the recession still being felt by the consumer, the burden is on publishers and platform holders to show the public that there is still plenty worth investing in.

We are down year-over-year, and so E3 is about reinvention and telling consumers what we have an industry and showing them why they should spend more money with us,” says MTV Games’ general manager and executive vice president Scott Guthrie.

Key to this reinvention is new hardware launches and competing technologies that will fight to become our industry’s salvation.

Perhaps the biggest surprise in terms of hardware launches is the 3DS. Given that Natal and Move have been grabbing headlines for the past year, Nintendo’s newly announced handheld is the only genuinely new first-party hardware due to be revealed at E3.

In fact, given the renewed surge of interest in the tech, 3D may play a far more prominent role at the expo than expected.

Avatar has kicked this off and almost validated that 3D is where the technology in entertainment is headed,” says SCEE president Andrew House.

Thanks to Sony’s 3D resources, we are the only company that serves from the lens to the living room. Now, with PS3 you have the first mass-market device with a large install base that is 3D ready out there.”

Namco Bandai VP Olivier Comte adds: I believe the next revolution will be 3D. I’ve tested some games in 3D and it is a very big change. There are some questions, such as what the long term effects on the eyes are, but I believe 3D is key.”

However, publishers will be reserving judgment until the power of 3D has proven to be popular with consumers, warning that the industry shouldn’t rush into this area.

From a gaming perspective, we have to look at 3D the same way we would any type of technological innovation,” says Feder. The use of 3D in gaming needs to be meaningful to the gamer and publishers will need to ask some important questions before investing in that technology.”

EA Sports boss Peter Moore concurs: The one thing we are learning is that we can’t take the existing camera angles. I saw Madden in 3D, and there were some very cool cuts, but when the camera moved up high, you couldn’t tell so much, it wasn’t adding value to the experience You’ve got to look beyond just porting games to 3D.”

But of course the technology that is on everyone’s lips this year is motion control.

Natal and Move have been hot topics since their unveiling at last year’s E3, with everyone from consumer to publisher clamouring to know more about these devices.

The time for teasing is over. Microsoft and Sony now need to show the world how these peripherals will negate the need for a more substantial hardware shift and broaden the market’s audience further.

For all the hype they have generated over the last twelve months, will they have the impact that everyone expects?

Let’s hope so,” says Pannell. There will have been significant investments from both first and third party developers, and I really think that the motion controllers will allow core audiences a new and interesting way to interact with their games.”

In Natal and Move, we potentially see the best hope of revitalising the industry. With no word of a successor to Xbox 360 or PS3, the controllers could provide the boost in interest and sales that a new console launch would.

We have high hopes for both Natal and Move because new hardware peripherals can do what no software product can do: adding never seen before functionality to the platforms itself and thus providing game developers with new possibilities and opportunities,” says Tradewest CEO Martin Spiess.

However, while the industry is excited about these new devices, many have warned that the transition to motion control gaming will not be a simple process.

I think you are going to see experiences purpose-built for Natal, rather than existing games re-purposed for it,” says Moore. There will be a lot of trial and error. I don’t think it will be about Madden Natal or FIFA Natal. It will be about brand new experiences that bring that technology to life.”

Codemasters CEO Rod Cousens adds: There may well be opportunity for creativity and innovation to prevail. The question is whether Natal and Move can emulate or surpass Nintendo’s success or whether it’s a case of ‘been there, done that’ by the consumer.”

And it’s herein that the true burden lies. Motion control, while perhaps more advanced in Natal and Move is nothing new to the industry, thanks to the success of the Nintendo Wii.

What impact did that truly have on the market? Was the gaming demographic broadened, or merely diluted? Key titles point to the former, but as the Wii’s sales continue to drop and with no killer new hardware to provide the same boost, is Nintendo about to be overtaken by its now motion-sensitive rivals?

Nintendo brings an interesting consumer element that the other two guys don’t,” says Guthrie. The install base is there and Wii will continue to be a big player. Nintendo, like all of us, needs to continue to re-invent itself and drive creativity.”

Many believe that the decline the Wii is experiencing is simply the natural consequence of its success. Whether or not Nintendo needs something new like Natal to reinvigorate the Wii market remains to be seen.

There is a point in any consoles lifecycle when some sort of market saturation kicks in,” says Spiess. But historically Nintendo has always succeeded in keeping their specific market segments vitalised.”

Nintendo couldn’t do anything wrong for a couple of years and now everyone’s writing its obituary,” says Sega West’s CEO Mike Hayes. All I can do is point to the sales we’ve had on the mainstream titles, like Just Dance. What part of that says Wii is not successful? There is at least another big Christmas for the Wii.”

In fact, all three platform holders are in for a big Christmas. Here we have three consoles, either approaching or past the typical sell-by date that has dictated generation shifts in the past.

But far from showing unease, many publishers believe the three pillars of Wii, Xbox 360 and PS3 are all exactly where they need to be. For the first time, the games industry has a model on its hands that can be sustained to create new long-term possibilities.<