The 2006 version of the Electronic Entertainment Expo aka E3 ran from May 10-12 last week. Some 521 exhibitors were on hand to demo the almost 1000 games expected to be launched this year. The big 3 game console makers, Sony, Microsoft and Nintendo were out in force showing off their latest PlayStation 3, Xbox 360 and Wii platforms.

The Xbox 360 launched in November 2005, and the PlayStation 3 and Wii consoles will launch about a year later in fourth-quarter 2006, so arguably the most interesting pieces of hardware were the 2 new Nintendo controllers.

Nintendo’s Wii Remote and Nunchuk controllers contain 3-axis motion sensors, and so will allow games to be played via roll pitch and yaw of the devices themselves.

By de-buttoning the user interface and making game-play less digital and more ‘analogy’, Nintendo moves to solidify their hold on the 8-12 year-old, and the casual demographics. Nintendo is so determinately focused on the ESRB E’s rating that even their website has an ESRB Notification. This business model has paid off handsomely for Nintendo, however, as the top 10 best-selling games worldwide of all time are Nintendo products.

The attached graphic shows 2 players using the Wii Remote to play the Nintendo Sports Tennis game.

In the game console market, Sony currently has almost a 2/3 share, with Microsoft coming in at 16% and the various Nintendo offerings totaling 13%. Some analysts think that this new generation of systems will provide a break and an opportunity to Xbox and Nintendo to win back some of that market share. By the time the PS3 is finally available, Xbox 360 will have been out for a full year, and price-wise, the PS3 will be 50-66% more expensive than the Xbox. Other analysts, however, believe that the reasons for Sony’s current dominance will persist … pls refer to Why Do American Games Fail in Japan? Our view is that Sony may have priced itself out of the market by bringing a $499-$599 platform to a user community dominated by the budgets of 16-26 year-olds. …but…then again, and on the other hand, the PS3 will have the legendary Cell processor and it’s 192 gigaflops of power, which makes it a quasi-supercomputer in it’s own right. The PS3’s photorealistic graphics and it’s potential for advanced RTS and AI may make it unbeatable, at least in high-end videogames.

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