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Microsoft Fell Flat at E3 2010

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In this crazy modern world, the divorce rate is about 50%. And according to some sources, the failure rate of 360's hovers around the same point. Thankfully, my 360 and I have been in a loving relationship for almost three years now (since I sent it in for repairs in November of 2007). I know, I know, I'm a lucky man.

All jokes aside, I'm going to recap some of the big developments from today's Microsoft E3 press conference. No one could describe it as uneventful; the harder question, however, is whether we should describe it as successful. In the midst of this great swell of 360 optimism, I'd like to sound some cautionary notes.

The Gospel of the Slim 360

By now, you've seen the big news from E3 2010: the Xbox 360 finally shed a few pounds and got a hot beach body. Just in time for school's end and some big summer sales, one would hope. Certainly, prognosticators have heralded the Slim 360's coming for some time now.

A side shot of the new 360

I'll admit, it doesn't look bad. It's slimmed down quite a bit from the old monster, and has an improved aesthetic (the sides angle inward so that the front-on view has an hourglass figure reminiscent of the letter X).

But is it enough? The Playstation 3 tried this trick about nine months ago, and it worked spectacularly. The new slim form factor released alongside several heavy hitters such as Uncharted 2 and Call of Duty 4, and the 2009-2010 holiday season was a big success for Sony. Since sales shot up in September 2009, the Playstation 3 has been going strong. I'm not convinced the same happens for the 360, however. For one thing, the drop to $299 was a huge market move for Sony; previously, the Playstation 3 had always been at least $100 above that sweet spot in the console gaming market. Microsoft, on the other hand, has been below $299 for a while now -- its Arcade was actually the cheapest console on the market for a time, when it sold for $199 in late 2009. In other words, to the average consumer, this might not look like radical progress; sure, the console looks better and probably performs better (the new 45nm-powered 360 should run cooler and quieter, while consuming less power), but it's actually pricier than the 360's currently available today.

I think the 360 will see a decent sales bump. But keep your expectations reasonable; this isn't a game-changer in the console wars landscape.

Natal Reborn as Kinect

Kinect, debuting November 4, 2010. And it's coming with 15 launch titles. That's almost better than the PS3 managed, though Kinect's posse looks uniformly undistinguished.

Will the Kinect flourish? I've been a skeptic for a long time, and I'm still going to reserve judgment until someone puts it in front of me and lets me try it. Just a few months ago, the rumbles and rumors insisted that Natal was a hopeless mess, that the time-lag was just too large, and that developers were growing intensely frustrated with the system. If you don't get the tech right from the start, how much room do you have to improve? That's an especially worrisome question when it comes to Microsoft, since their modus operandi since entering the console business seems to be just that -- big mistakes early on, and forgiveness with the next Halo game.

I will say one thing: Star Wars Kinect is going to be huge. Bravo to Microsoft for making the no-brainer move. I know that seems like a back-handed compliment, but it's remarkable how frequently companies fail to execute the no-brainer. Big franchises are going to sell the Kinect better than a thousand appearances on the Jimmy Kimmel show, and it doesn't get bigger than Star Wars. I'm pretty sure that legions of gamers have fantasized about motion-controlled lightsaber combat in the years since the Jedi Knight games. Now we're finally going to get one, albeit one that seems targetted at the "family" audience. Rest assured -- Lucasarts is a consummate pro when it comes to milking its franchises, and we could very well see the next Jedi Knight (or The Force Unleashed 3) supporting Kinect.

Star Wars Kinect - first screen?

And the Games?

Ah, there's the rub, as Hamlet would say. Plenty of big titles shared the stage at E3: Halo: Reach got prominent attention, of course, as did Metal Gear Rising. They unveiled gameplay of Gears of War 3, and debuted Forza 4. Ultimately, however, I couldn't shake my disappointment with a lineup that seems like more of the same.

Take Halo: Reach, for example. Now, there may not be another game which I remember with as much fondness as Halo: Combat Evolved. I was one of the idiots who purchased the original Xbox during its debut. I was a bit put off by the overly large controller ("But I'll get used to it," I told myself); I was frustrated by the power cable, which kept falling out of the machine and killing my console at the worst times ("I'll just walk very, very softly within a 10-meter radius of the TV"); and, worst of all, I didn't have any other games to play. In this ocean of misery, Halo: CE was an oasis of superb gaming, and deservedly one of the most famed titles of all time.

People remember different things about it: storming the tropical beach in "Halo," or getting your first headshot in "The Truth and Reconciliation." Or maybe the revolutionary graphics, or the fact that for the first time on a console, you could move and shoot at the same time. What a radical concept. Of course, I shouldn't neglect the engrossing story, memorable characters (I knew I was going to like Cortana the first time she gave the captain some sass), or exhilarating action sequences.

The problem is that the series hasn't really improved since then. And I'm not sure Reach is moving in the right direction. The graphics don't look great (especially considering it's the 360's showcase franchise), and the gameplay seems even more arcade-like than before. Among various other oddities, the trailer showed extended space combat sequences. This kind of stuff makes me really apprehensive: usually, when you try to take on a Wing Commander component to an action game, what you end up with is half of a mediocre action game and half of a terrible space combat game.

Admittedly, this critique is hardly unique to the 360. PS3's big announcements recently have been Killzone 3, LittleBigPlanet 2, and inFamous 2. And God knows Nintendo's been living off the same three horses (Mario, Zelda, and Metroid) since the 80's. But the other guys' franchises are making dramatic leaps forward -- take the jump from Uncharted to Uncharted 2, or the innovations in Super Mario Galaxy and its sequel that have made them this generation's most critically acclaimed titles. What is Gears 3 going to do to match that? Four-person co-op?

What the 360 Needs To Do

1) Smart money on exclusives - I don't know what Microsoft thought it was getting when it bought "exclusive" DLC for Grand Theft Auto IV for $50M, but in retrospect, it looks like a pretty bad decision. The PS3 got the same content, and the 360 is out one exclusive, original IP. $50M is roughly twice the cost of Bioshock's development, and is probably about the same about of money Bungie's going to end up spending to develop Halo: Reach.

2) Figure out its demographic - the 360 now sells to fratboys (Halo: Reach and Gears of War 3) and their Stepford-Wife mothers (Kinectimals). Is this the right way to go? We've seen "adult" titles bomb on the Wii, and it's pretty clear why: you can't have your cake and eat it, too. I don't know if the 360's actually going to gain much market share in the casual crowd when the Wii's a huge name there already. And, as before, the same calculus applies: however many millions Microsoft sunk into Kinect, they could have invested in another AAA title or two.

3) Star Wars: The Old Republic - enough said, right? This game is going to be the biggest MMO on the block behind World of Warcraft, and it could be the defining game of the next decade. Bioware is the best RPG developer on the planet right now, and the Star Wars universe is one of the five best licenses in the world (behind Harry Potter and arguably Lord of the Rings, I'd say). Bringing SW: TOR to consoles -- or to the 360 exclusively -- would be an earth-shattering coup for the Giant of Redmond.

One final word for Microsoft: as much as I've criticized you here, I really do enjoy the 360 and wish it the best. So, Bill: good luck and godspeed!