E3 is just what the industry needs - Analyst

With the Electronic Entertainment Expo less than three weeks away, the already-impressive flow of rumors and leaks is likely to pick up. So before the waters get too muddied, GameSpot sought out a handful of industry analysts to get their takes on what will happen and what Microsoft, Sony, and Nintendo should be focusing on heading into the big show.

Kicking things off was Electronic Entertainment Design and Research analyst Jesse Divnich, who painted a cheery picture of the show as a whole, but expressed concerns about Sony chasing a phantom audience and gamers "evolving" beyond Nintendo.

GameSpot: E3 often gives us a good idea of what trends publishers are going to be chasing in the coming year. Past years have been dominated by open-world titles, extreme sports games, and more recently, rhythm games and casual games. Are there any genres you expect to see out in force at this year's show?

Jesse Divnich: I don't foresee there being any one genre or console dominating the show floor this year. It is clear that based on the current release schedule, the back half of 2009 and especially the holiday season will be packed more so than ever before. Given the AAA-packed schedule in the back half of 2009, you can bet every publisher will be trying to get an early bump in consumer awareness and preorders by showing off their biggest AAA titles scheduled for this year.

GS: What's the most important theme for Microsoft to focus on for the show? What does it need to leave E3 attendees thinking?

JD: The Microsoft Xbox 360 has such a dominating share of the core gaming market that they can begin to show the industry how they plan to take gaming to the next level through their online services. Further, OnLive and its cloud technology is certainly a threat, and it is imperative for Microsoft to illustrate the differentiating features of their online service. I would not be surprised if Microsoft announced a major AA title to be distributed exclusively through Xbox Live later this year (note that I do not mean AAA, but that will not be far behind).

In terms of price cuts, I do not expect Microsoft to drop their price on the Xbox 360--units sales are trending well ahead of last year. The ball is certainly in Sony's court, and Microsoft will not lead the way with any price cut unless a potential PS3 price cut hinders their current sales trends.

GS: How about for Sony?

JD: Sony is certainly on the upper end of the consumer-technology matrix, and their demographic base is narrow. Those who own a PS3 are either loyal Sony fans or are considered technology innovators--those that must own the latest and greatest technologies.

Sony still has a lot of work to do to capture the core video game market. I expect Sony to tackle both spectrums of the market by displaying some of the biggest AAA core titles that are to come in the next two years (God of War III, MAG, Final Fantasy, and so on), as well as present new casual games and technology.

I believe any attempt by Sony to try to appeal to the casual/mainstream markets at this point in the race to be valueless. They have priced themselves out of that market, and until the PS3 gets in the $200-$250 range, the casual, mainstream, and family markets will have no interest. The idea of the one-size-fits-all console has been dead and buried--the demographics of the video game industry are much too diverse, and attempting to target "everyone" will likely cause brand confusion and consumer alienation.

Sony must continue to try to position itself as the No. 2 console in the market by showing its superiority over Microsoft and the Xbox 360. To attack the core market, Sony must add more value to their PlayStation Network, introduce more AAA exclusive titles, and make available better downloadable content, all of which I expect Sony to display this year at E3.

I do not expect any PS3 price-cut announcement at E3. Sony's pricing strategy on the PS3 is too reliant on manufacturing costs. But that being said, I expect a PS3 price cut within the next four months--no doubt. Any E3 PS3 price cut would purely be coincidental timing.

GS: And Nintendo?

JD: Nintendo is such an odd case. They disappointed the E3 crowd last year by showing off what has been the pillar of their success: creating fun and entertaining products. Nintendo is not known for creating complex or in-depth products, yet the gaming sector continues to fault Nintendo for the lack of core titles on the Wii and DS. As an industry, we must begin to accept that most of us core gamers have evolved beyond what Nintendo can offer. It is wrong to assume that a product or company will evolve with us over time ("us" being the core gaming market).

We do not spam the Tonka forums because their new lineup of construction toy trucks lack 22" chrome spinners and a revolving roof bazooka. Why? Because most adults have come to accept that Tonka toys are for kids and no Tonka product could ever appeal to the adult market.

This is no different from Nintendo, except the core market continues to hold on to the ounce of hope that Nintendo will somehow launch a title that could compete on the same levels of Final Fantasy or Call of Duty. What the core of our industry must begin to accept is that we have two different types of appetites when it comes to gaming. One is a hunger for complexity, involvedness, online multiplayer, and depth. The other is the sense of enjoyment from playing an entertaining title.

Nintendo can only quench one of those needs, and expecting them to step outside their comfort zone to compete on the same levels as a Halo or Call of Duty is simply ridiculous. The market wanted more quality mature titles on the Wii and DS, and they got MadWorld and GTA: Chinatown Wars; their sales results speak for themselves.

That being said, E3 is a core-targeted event, and Nintendo must come to stage with a showing of titles that will satisfy our expectations. I expect Nintendo to show off a long list of both first- and third-party titles that are more appealing to the E3 audience. In terms of first-party, Nintendo will likely announce a new Mario title as well as a new Zelda game, which both will not likely hit retail shelves until 2010. For third-party, it will likely consist of games that plan to take advantage of the Wii MotionPlus.

What I hope occurs at the Nintendo event? I hope Reggie shows up onstage wearing a chef's hat to demonstrate a new Wii cooking game and whips up a badass lasagna with the Wii Remote. Because quite honestly, it does not matter what Nintendo shows off, we will buy it. Let's face it, whether you are a hardcore Halo fan, play endless hours of Killzone 2, or you entrench yourself in the house for an entire weekend of World of Warcraft, you know you are a sucker for anything Nintendo releases. We all are, and that's why we love them.

GS: Do you think the ESA has finally found the right format for the show to please its members, attendees and exhibitors?

JD: The somber memories of E3 2008 are long gone, and I could not be happier with the ESA and its members. E3 is what the industry needs to be taken seriously. Every other major sector has a big event every year: Cannes Film Festival, Consumer Electronics Show, International Auto Show, and so on. It is only right that video games get their moment in the spotlight.

With the event a short term away, the format, attendance, and exhibitors look to be in balance with what the industry is expecting. I do not see any downside to E3, this year and even though I am expecting packed floors, long lines, and a slew of useless shwag, I cannot help but feel overjoyed that E3 is finally back.