E3 Highlights

Along with @norrismarkw, I joined 46,800 video game industry professionals, investor analysts, and retailers at the Electronic Entertainment Expo (E3), the annual video game conference and show at the Los Angeles Convention Center. Items generating buzz at this year’s E3 were Nintendo’s Wii U next generation console, PlayStation’s PSVita next generation handheld, and Microsoft’s Live TV on Xbox 360. Notable software demonstrations included Star Wars Old Republic and Battlefield 3 from EA, Gears of War 3 from id, Halo 4 from Microsoft Game Studios, Tomb Raider from Square Enix, Rage and Elder Scrolls V Skyrim from Bethesda, and Bioshock Infinite by 2k Games.

According to an info-graphically dense report from the Entertainment Software Association’s (ESA) survey of almost 1,200 households that have been identified as owning either or both a video game console or a personal computer used to run entertainment software, 72% of American households play video games and 82% of gamers are adults. The report also highlighted that 42% of gamers are women and that women over 18 represent more than 1/3 of the game-playing population. In addition, purchases of digital full games, digital add-on content, mobile apps, subscriptions, and social network gaming accounted for 24 percent of game sales in 2010, generating $5.9 billion in revenue.

Other findings of the survey include:

• The average game player is 37 years old, while the average game purchaser is 41 years old
• 65% of gamers play games with other gamers in person
• More than half (55%) of gamers play games on their phones or handheld devices
• 86% of parents are aware of the Entertainment Software Rating Board rating system, and 98% of these parents are confident in the accuracy of the ratings
• Parents are present when games are purchased or rented 91% of the time
• Consumers spent $25.1 billion on game content, hardware and accessories in 2010

Hardware News
Nintendo announced the sequel to its Wii console, dubbed “Wii U”, that includes a new controller with a tablet-like touch screen. The new controller sports a 6.2in touch screen with a heft similar to the Galaxy Tab, yet still has a rather plastic-y feel (the durability will hopefully be improved by the time the console launches late in 2012). In addition to displaying info that’s not on the TV (e.g., map details, special character views, game configuration details) the new controller features a user-facing camera, microphone and speakers, and stylus. Also, information and viewpoint of the controller can change based on the orientation of its gyroscope. In theory, the Wii U “experience” shown at E3 can support full HD graphics and allows consumers to continue playing while the TV is used for other activities (e.g., TV, movie), but must still be in range of the main console (so it’s not a standalone device). Games can be played on a TV, the Wii U controller, or both (in conjunction with the Wii Remote). Nintendo’s aim is to continue their progress on capturing the causal gamers while focusing back on hardcore gamers that never really took to the original Wii and are entrenched with the PlayStation3 or Xbox 360. The only negative that the public seemed to espouse with the Wii U is its intended launch date later in 2012. Thus, most items shown at E3 were concept games and not fully functioning next generation games; those are expected at E3 2012.

Sony unveiled its new portable device, the PlayStation Vita, as the successor to the PlayStation Portable. The new handheld sports a 5in multi-touch OLED screen, dual analog sticks, dual front and back cameras, and Sixaxis motion sensing. It will come in either WiFi only or dual WiFi/3G (3G from AT&T) models. The PSVita allows the use of its Internet connection for voice and text chat during gameplay or when browsing the web. It also provides a new social networking function called Near that allows owners to connect and interact. Cloud-based game saving will allow PSVita players to pickup gameplay on their PS3 and vice versa.

Software News
Microsoft’s Kinect has started to penetrate hardcore gaming titles like Ubisoft’s Ghost Recon: Future Solider, where players can assemble and fire a large variety of guns using just their hands. Microsoft Game Studios also demonstrated an upcoming Star Wars themed title: Star Wars Kinect. Players take the role of a Jedi and wield a lightsaber and force powers with nothing more than hand gestures. However, there are concerns as to how realistically a hardcore gamer would play using just their body and Kinect as moving seems to be optimal using the normal remote. Other titles that focus less on precise movements seem to be where Kinect will truly shin. These types of games include Dance Central 2, Sesame Street: Once Upon A Monster, Kinect Sports: Season 2 (golf, but not football), and Kinect Disneyland Adventures.

Of the various highlights from Microsoft’s keynote, the most notable for media companies is the Kinect-based TV navigation. This allows an Xbox to act as a set-top box, let consumers watch live TV, and use an Xbox-based DVR with voice & body movements. This feature is already live with Sky TV in the UK, Canal+ in France, and FoxTel in Australia. In partnership with the UFC, they will be allowing mixed martial arts fans to quickly and easily enjoy pay-per-view events on the Xbox. Xbox Live is also getting some additional entertainment features including YouTube, Bing for search, and voice control capabilities.

The movement in the Asian gaming market has been towards the freemium model and is most likely where the US market will trend in the future. A great example of this sort of success is Zynga’s $10B valuation and probable IPO. The days of subscription-based gaming (e.g., World of Warcraft) are likely on their way out; what remains to be seen is whether the console gaming market will trend this way as well and focus more on in-game purchases. Clearly game studios are hedging their bets with the likes of Disney purchasing Playdom, THQ partnering with Jimmy Buffett, Exploding Barrel Games creating a 3D game on Facebook, and iOS devices using the Unity gaming platform.

NBCU-related News
Syfy and Trion Worlds announced a partnership to launch the game and television show titled “Defiance”. This unique title will blend game play elements from first person shooters (FPS) taking place in a MMO virtual world (massively multiplayer). The game will have a shared universe with a TV series to be aired on the Syfy channel. In-game events and those on the show will influence each other. According to Lars Buttler, CEO of Trion Worlds, “This is essentially the convergence of the television and gaming industry into one fully-developed cohesive property. Syfy is creating a television show that takes place in the fictional universe that the game is set in. The game and the show will constantly [influence] each other from the moment they simultaneously launch.”

Universal Pictures also had some coverage of their upcoming Jurassic Park game and their existing Back To The Future (“BTTF”) game; both games are in conjunction with Telltale Games. The Jurassic Park game comes out later this year on PC/Mac, the PlayStation Network, and eventually the Xbox 360. The game focuses on puzzle solving and is very story-driven. It is based on the untold story of Nedry, his Barbasol canister, his handlers, and of course Velociraptors & T-rex. The BTTF game is an interactive choose-your-own-adventure style game that allows fans to take the role of Marty McFly and travel back in time to save Doc Brown. The game comes in several incarnations: iPad, Facebook, PC/Mac, and a physical card game.

NBCU Competitor-Related News
Disney Interactive Studios showed off their upcoming titles that include characters from Cars, Phineas and Ferb, and Pirates of the Caribbean. Phineas and Ferb: Across the Second Dimension is an action game (Wii, DS, & PS3) taking part over five worlds that gives players access to odd gadgets that let them melt enemies and stick to walls. Players may also play with a friend in co-op mode. Disney Universe is an online multiplayer action game (Xbox 360, PS3, & PC) that has gamers working together to save the “Disney Universe”. Fans take on various Disney characters and progress through Disney-themed worlds via challenges. Cars 2: The Video Game is a racing game (PS3, Xbox 260, Wii, DS, & PC/Mac) similar to Mario Cart that takes place across Europe and Japan where fans can play as Mater and 20 other characters. LEGO Pirates of the Caribbean: The Video Game (Wii, DS/3DS, Xbox 360, PS3, PSP, & PC) has fans building Legos, dueling, and treasure hunting as 70 various characters. Finally, a fan favorite at E3 had several Disney animators drawing hand sketches of various characters from the Disney archives, easily winning as the best swag item of the show.

Warner Brothers Interactive Entertainment’s lineup of games at E3 included Batman, Lord of the Rings, Green Lantern, and Sesame Street. Batman Arkham City’s follow-up to Batman Arkham Asylum is an action and puzzle game (Xbox 360, PS3, & PC) that sees the Caped Crusader using forensic analysis and a criminal database to track and catch villains across the city. The Lord of the Rings: War in the North is a co-op game (PS3, Xbox 360, & PC) for up to three players touching on items not in the films. Rise of the Manhunters is a 3D game (Xbox 360, PS3, Wii, DS/3DS) that sees Hal Jordan, using the likeness and voice of Ryan Reynolds, and his Power Ring use various weapons to defeat the Manhunters. Bastion is an RPG game (Xbox Live & PC) that sees the narrator provide different feedback based on the players actions. Finally, Sesame Street: Once Upon a Monster is an adventure game (Xbox 360 Kinect) focused on helping kids learn to read by solving problems with the help of monsters. It also features a co-op version to allow for parent-child cooperation (sibling cooperation gameplay seems highly unlikely).

Other Gaming / Software News
Another interesting development from Nintendo was its 3DS mobile gaming platform. There were several games to demo including classics like Excitebike [10] and Tetris [11], as well as updates to newer favorites like Mario Kart- all of which use autostereoscopic (aka glasses-free) 3D that can be increased, decreased or disabled depending on the consumers desire. Older gamers and those with glasses or contacts take note: 3DS gaming can make you reach for some Visine as well as a serious temple-rubbing rather quickly.

Nintendo’s 3DS mobile gaming device also showed off some Augmented Reality (“AR”) titles including Kid Icarus: Uprising [12] and Pokédex 3D [13]. The new version of the classic Kid Icarus game certainly cannot be labeled “retro”. It uses the built-in 3D camera to recognize countless specially designed AR Cards with animated game characters popping up in 3D on the game screen and even battling each other when two cards face off. For those Fallon fans out there: in addition to a copy of Kid Icarus, Jimmy Fallon received a demo of Zelda: Skyward Sword and the WiiU console and controller courtesy of Reggie Fils-Aime (President & COO, Nintendo of America) [14]. The free Pokédex 3D application includes a collection of over 150 Pokémon from the Pokémon Black and Pokémon White games. The application lets you see each Pokémon in 3D with animated motion and sound, and you can rotate the Pokémon image 360 degrees to zoom in and view it from any angle. You can receive Pokémon data from friends using the SpotPass WiFi feature or by scanning AR markers. Once you have collected data for a Pokémon, the AR Viewer allows you to view that Pokémon image in a real-world setting in real time and create photos to share with friends.

GRilli3D [15] presented their “3D Without Glasses” technology to allow for 3D viewing on iOS devices. GRilli3D films are known as “GRillis” and allow users to view 3D-generated content in true 3D stereo format without cumbersome and expensive 3D glasses. GRilli3D offers the very first of a next-generation utility that allows users to enjoy true 3D stereo depth by virtue of applying a simple and inexpensive plastic film to a 3D-enabled device. GRillis operates by interposing a series of “Barrier Lines” between the eyes and the projected image, blocking the view of each eye differently and providing the signal separation that result in depth perception at close intervals when used with mobile devices. “GRilli3D really is the first of a new generation of 3D stereo viewing devices that completely eliminates the need for special glasses,” said Dwight Prouty, GRilli3D’s Inventor and Founding Partner. The GRillis in combination with Final Cut or Avid software would allow for rendering and viewing content for iOS; this was demoed at E3 using an episode of Mr. Ed to prove that it wasn’t content created for 3D.

As an observation, there were several companies including QR codes in their booths and marketing materials to direct consumers to mobile websites, video clips, and other marketing materials. However, several brands directed users to full web sites instead of mobile-optimized websites and this sort of QR code usage should be explicitly avoided by NBCU brands looking to explore this space.

EA made a splash with its new Lord of the Rings title: War in the North. Using a full orchestra, EA demonstrated the emotional impact of a powerful musical score. In the EA booth, several stations were setup for attendees to try out four player cooperative game play. The game will be available on PC, XBOX360 and Sony PS3.

For those classic gamers: a company out of El Monte, CA called Hyperkin [16] have gone the Ben Heckendorn route [17] and are mass-marketing new hardware systems to support classic cartridge games. Favorites at the show include the RetroN 3 console [18], which allows for playing NES, Super Nintendo, and Sega Genesis cartridges all on one system, and the SUPABOY portable pocket SNES console [19], which can play Super Nintendo and Super Famicom cartridges anywhere you are.

Finally, and again for the classic gamers, the Video Game History Museum [20] had an exhibit at the show displaying a portion of their 25 years of game artifact and memorabilia archives. Their mission is focused on archiving and preserving the stories of how the industry evolved as well as honoring and documenting the contributions of the people that made it possible. In addition to thousands of physical artifacts and memorabilia, the museum’s digital archives boast hundreds of gigabytes of design documents, memos, magazines, press kits, and other historical corporate paperwork. The exhibit specifically showed off 30 classic coin-Op machines, 18 classic console stations, 256 pieces of nostalgia, and two bands rockin’ classic game tunes.