Competition is heating up in $65bn industry but pace of change is more evolutionary

EVOLUTION RATHER than revolution was the general tenor this year of the world’s largest showcase of electronic gaming, E3. With the exception of a couple of announcements, the big companies were building on last year’s big news. Motion gaming, 3D games . . . it felt a little like E3 2010, round two.

What was evident was that competition in the games industry is fierce and it will only intensify this year as the various companies seek to gain the upper hand in a multibillion-dollar industry. The global games market is currently worth an estimated $65 billion in revenue and has grown considerably in recent years.

There were few surprises, with many of the big announcements already leaked as the rumour mill went into overdrive.

While Microsoft was keen to show how its Kinect platform was developing, Sony wanted to concentrate on 3D gaming and Nintendo was determined to prove that its 3DS console was here to stay, despite failing to meet sales expectations.

Sony is hoping its new Vita handheld console will help it gain ground in a market once dominated by Nintendo and now facing additional pressure from smartphones.

Although attendees were eager to hear about Vita Sony started its press conference by addressing what SCEA president Jack Tretton described as “the elephant in the room”. The company has been hit in recent weeks by several security breaches, the worst of which saw the details of millions of PlayStation Network account holders potentially exposed to hackers.

Not only did Tretton apologise for the security breach, but Sony Computer Entertainment president Kaz Hirai also weighed in on the topic. “We learned a lot during the recent outage of PlayStation Network,” he said. “One of the most important things we learned was about the trust and loyalty of our customers.”

That out of the way, the company revealed more details about Vita, including pricing – from €250 upwards – and an exclusive 3G deal in the US with carrier ATT.

The console integrates social features with gaming and takes aim squarely at smartphones with touch-sensitive controls.

While the thrust of Sony’s conference concentrated on Vita and 3D gaming, there were more than a few Move announcements.

Players of upcoming game Infamous 2will have the chance to create their own online missions with PS Move, Sony said, while the technology is also coming to the Little Big Planetseries.

Sony’s Move platform has attracted more third-party developers, including some who admitted they may have been less than complimentary in past interviews.

Ken Levine of Irrational Games disclosed that, despite his earlier misgivings, Bioshock Infinitewill be compatible with Move.

Rival Microsoft made it clear it was aiming big for the coming year. It has its sights set on becoming the top console worldwide. Part of its strategy is its motion tracking controller Kinect, which has sold more than 10 million units since its launch last year.

“We’re number one in a handful of countries around Europe. We need to be number one in all the significant geographies around Europe,” said Chris Lewis, Microsoft’s vice-president of interactive entertainment business.

Microsoft is integrating elements of Kinect into a number of games that would otherwise not have been deemed suitable for motion control, including its new Forza Motorsport 4game. The racing title will use head tracking, combined with almost photo-realitistic graphics to make the game more immersive.

Like Move, Kinect also got the backing of a number of third-party developers, including EA. “Kinect really has pumped adrenaline in the arm of a business that has given us access to a much broader audience,” said Lewis.

Perhaps the surprise was the inclusion of the FIFAfranchise as one of the future Kinect enabled games. Just under a year ago, the title's line producer David Rutter was quoted as saying that FIFAwouldn't be included in the franchise just yet.

And it doesn't stop there. EA is also planning to bring Kinect into titles such as Tiger Woods PGAand incorporate elements of it into its popular Mass Effectseries. This will allow players to control tactical movements by issuing voice commands, while players will be able to interact with the game's characters by voice. Core gameplay controls remain with physical controllers.

Ubisoft, meanwhile, has committed to implementing Kinect features in its Tom Clancytitles. The motion-sensitive controller will mainly be used in a gun customisation section of the game.

Integrating Kinect in such a way may open the controller to a more hardcore gaming audience, shaking off the impression that the controller is aimed at casual gamers and children.

Lewis said the company was targeting a much wider audience with Kinect, a task the expanded games portfolio is aimed at addressing.

Among the more ambitious games was Crytek's historical title Ryse. The Roman Empire era title is Kinect controlled, meaning players must wield a sword and engage in combat in front of the controller. It's one of the bloodiest titles seen on Kinect so far, if the preview footage is any indication.

The issue of new consoles was left to Nintendo to cover at its briefing. Although the Wii has been a success – it has shipped more than 86 million units since its 2006 launch – it has suffered recently as competition in motion-enabled gaming increased dramatically in the past year. Kinect and Move have eroded a bit of the console’s unique selling point, so the time was right to announce the next generation of its home console.

Nintendo was sketchy on the details of the console itself – although it will be high definition – with the focus more on the controller that the next generation console will use.

The controller for the Wii U, previously known as Project Cafe, was a secret as badly kept as Sony’s PlayStation Vita. Much of the detail had already been leaked – a touchscreen with game controls built in. However, Nintendo managed to surprise a few people with the detail. Using the device as a standalone screen, even when the TV is turned off, hadn’t been on too many radars. It can also be used to reveal alternative views in games.

The reaction to Wii U has been mixed. While some analysts have praised Nintendo for taking such a step with the controller, others have taken a more cautious view, leading to shares in the company tumbling in the wake of the announcement.

Nintendo is clearly hoping the Wii U will help attract hardcore gamers back to its fold. Although it has no playable games yet for the console – showing off Wii U "experiences" instead – the titles committed to the platform show some of the bigger titles will be coming to the console. EA has confirmed Battlefieldwill be launched on the new Nintendo system, while other titles include Tekken, Assassin's Creed, Ninja Gaiden 3and Ghost Recon.

If the data breach was the elephant in the room for Sony, the 3DS was Nintendo's. More detail was given on plans for the 3DS as Nintendo tries to drum up sales for the console, which was showcased in a blaze of publicity at last year's show. It has since failed to do quite as well as Nintendo predicted. The company is bringing out heavyweights such as Super Mario, Mario Kartand Starfox 3Din a bid to ignite further interest in the 3D console.

Although the main companies were judged to be a little underwhelming on the day, the volume of games announced will make it an interesting year for a business that is now one of the biggest forms of entertainment.