Wii rivals take aim with blitz of new products

The video game industry is hoping that 3D and new motion-sensing controllers will pull it out of a sales tailspin as it gathers for its annual E3 trade show in Los Angeles this week.

Microsoft launched a marketing blitz for its motion-detecting “Project Natal” controller on Sunday night, inviting celebrities and media to a specially commissioned Cirque du Soleil show that artistically demonstrated its breakthrough technology for the Xbox 360 console.

Sony will reveal games that exploit the capabilities of its Move motion controller at the show and new 3D features in the PlayStation 3, while Nintendo is expected to show off a 3D version of its DS handheld console that does not require special glasses.

The current generation of consoles was launched at E3 (the Electronic Entertainment Expo) five years ago with the Xbox 360, but, instead of replacing ageing models, peripherals and new features are being added in 2010 to extend their life and appeal. The latter has been sagging. April marked the fourth worst month on record for video game sales in the US – console sales fell by 37 per cent and software sales by 22 per cent compared with a year earlier, according to the NPD research firm.

Michael Pachter, video game analyst at Wedbush Morgan Securities, attributes much of the fall in software sales to hard-core gamers not buying new titles. He says they are instead spending more time in multiplayer online battles using existing games such as Call of Duty: Modern Warfare 2.

“The publishers have created this monster where games have this replay value that lasts forever, and they’re not charging for it,” he says.

In consoles, Microsoft and Sony are hoping to emulate the success of the Nintendo Wii when they launch their motion controllers later this year.

Microsoft’s Xbox accessory, which will be showcased this week, is a motorised camera housing microphones and sensors that is able to scan and capture players so they appear in games as themselves or as “avatars”, graphical representations that mimic their every movement.

“I think this is a revolution, because it’s really yourself on the screen,” says Yves Guillemot, chief executive of publisher Ubisoft, which is developing several games for the accessory.

Sony’s Move has a wand-like controller with glowing tips that a camera recognises, giving more precision while playing games. The advances mean Nintendo will have to react, says Van Baker, video game analyst with the Gartner research firm:

“Ultimately, they’re going to have to do a platform refresh to regenerate some excitement around the Wii.”

The Japanese company is well placed to do that with revenues from 70m Wiis sold – twice the sales of the PlayStation 3 and 30m more than the Xbox 360.