Analyst: Xbox 360 Best of Show at E3

This week’s E3 Media and Business Summit in Los Angeles gave each major console maker — Sony, Microsoft and Nintendo — the chance to showcase the future of their platforms.

Microsoft added social functions and new entertainment options to the Xbox 360, Sony trumpeted a video store and an upcoming price cut for the PlayStation 3, and Nintendo gave gamers a glimpse of a new controller add-on and upcoming games like “Wii Sports Resort.”

However, if any of the Big 3 could be said to have “won” E3 this year, then Microsoft takes the top prize, according Mike Goodman, director of digital entertainment for the Yankee Group.

Real Movement

Each game maker had to meet particular goals with the products, titles and enhancements to their individual gaming systems. Nintendo’s announcements failed to provide any new innovations for the market-leading Wii, he told the E-Commerce Times. Meanwhile, in its E3 press conference, Sony simply confirmed releases and enhancements that had been rumored, speculated upon or otherwise discussed prior to the event.

Microsoft, however, showed that it is playing on one of its strongest selling points — Xbox Live — Goodman explained.

“If you think about [the three console makers’] position in the marketplace, they achieved what they needed to achieve,” he said. However, “if I had to pick a winner just based upon their announcements, I’d pick Microsoft as the winner, Sony is second and Nintendo is third,” he said.

Microsoft’s announcements, Goodman noted, indicate that the company is trying to use innovation with its Xbox Live service to deliver new experiences to its installed base while at the same time add more incentives to attract new users.

Mission Accomplished

Microsoft may have the oldest platform among the current generation of video game platforms, but in terms of the gaming industry at large, the company is still a relative newcomer. As such, it needs to work harder than both Nintendo and Sony to capture and grow its installed base. Right now, as sales for the Xbox 360 show signs of slowing, the game maker had to achieve certain objectives with its E3 announcements — as did Nintendo and Sony.

“They have a much harder row to hoe than Sony and Nintendo do because [the two companies] have the stronger brand in the marketplace. Microsoft needs to expand its base and reinvigorate sales,” he said. “The only thing that they didn’t do that I think they need to do is that they need a price cut badly. What they did [in lowering the price to US$299 on existing 20 GB Xboxes but discontinuing the production of the model] was not really a price cut to reinvigorate the marketplace.”

Microsoft, according to Goodman, had the greatest degree of innovation in its announcements — in particular, the addition of avatars and the Primetime channel to Xbox Live unveiled at E3 Monday. With the Primetime channel, Microsoft capitalizes on people’s love for game shows. The interactive competition allows Xbox Live subscribers to compete against each other in real time.

Set to roll out this fall, the first game coming to the channel is NBC’s “1 vs. 100.” Much like its televised counterpart, the Xbox Live version will have a live host and put a single challenger up against 100 other users. Microsoft is also offering prizes.

Musically Sound

The addition of avatars for Xbox Live — which look much like the Mii avatars Nintendo has long used on the Wii platform — ushers in an innovative way for the online service’s subscribers to interact with other. A slew of music-based games including “Lips,” “Guitar Hero World Tour” and “Rock Band 2,” are set to roll out by the end of 2008. The titles take advantage of the fact that 80 percent of the revenues from music-related games come from Xbox Live, combining console- and online-based play.

The news that Netflix will begin streaming movies directly to the Xbox 360 was a welcome announcement, Goodman said.

Another surprise was Square Enix’s announcement that it plans to port the upcoming “Final Fantasy XIII” for the Xbox 360. That is a contradiction to earlier statements the game developers issued in 2007 that the title would remain a PlayStation 3 (PS3) exclusive, he said.

“Microsoft’s announcements showed that it is taking an innovative approach with its Xbox Live service. It’s good to see them doing something different,” Goodman said.

A Little Ho-Hum

Nintendo, Goodman said, played it safe, offering little beyond its standard fare. The company’s upcoming games, “Wii Music,” “Shaun White Snowboarding” and “Wii Sports Resort,” are fundamentally no different than their predecessors.

“There was no [‘Mario Kart’] or ‘Wii Fit.’ That’s the level of success they need to maintain the imagination of their audience and the marketplace. But as the market leader, Nintendo doesn’t need to rock the boat. You can only rest on your laurels so long before the competition catches up,” Goodman noted.

The MotionPlus add-on accessory for the Wii Remote is just Nintendo correcting a problem with the sensor mechanism in the device, he added.

Sony’s E3 announcements were equally lackluster, Goodman opined, because there was nothing new in them. The PS3 maker simply gave release dates for previously announced products, including “LittleBigPlanet” and the PS3 Video Store. The new 80 GB PS3 model at $399 is the same price point of a previous model with half the storage.

“Sony has gone a long way to fixing their core problem — a lack of titles people want to play. But a big shot across its bow was the Square Enix ‘Final Fantasy’ announcement. Talk about a slap at Sony. I heard they didn’t even know. And they have to be unhappy that one of the exclusive supporters of the PS3 has essentially stepped into the enemy camp. That is a huge statement about the PS3 and says you can’t count on Sony for exclusives anymore,” Goodman said.