E3 2008: XBL Avatars, Netflix, and FFXIII top 360 slate

So what's not the big news at Microsoft's E3 Media & Business Summit press conference this morning? Well, that would have to be the long-rumored Xbox 360 Pro price drop. Yesterday, Microsoft officially pulled the trigger on a pseudo-price drop for its midrange console, saying that it would be discounting the 20GB hard-drive-equipped console to $299 in an effort to clear stock and make way for its $349, 60GB counterpart due out in early August.

With the all-important pricing information thus revealed, what could Microsoft have up its sleeve for this the first gathering on the opening day of E3 2008? That question may have already been answered, as well. In mid-June, market research firm Intellisponse had its online coffers plundered, and Internet denizens walked away with a trove of plausible-sounding information, including a Mii-like Avatar system to replace the Xbox Live gamerpic, a new karaoke game titled Lips, and a new installment in the Scene It? movie trivia franchise.

Ongoing rumors also suggest Microsoft is in store to roll out an all-new look for its popular Xbox Live user interface. More than just a platform for the "MiiToo" avatars, the new XBL look will reportedly bear a Minority Report aesthetic, wherein users will be able to navigate menus by way of a new motion-sensing controller.

And that's not even to mention a new blockbuster game from one of Microsoft's development partners, such as the project Bungie teased last week that may or may not be a Ghost Recon-influenced squad-based tactical shooter, or Microsoft's Netflix video-rental collaboration.

Here inside the decidedly empty Los Angeles Convention Center, conference attendees pack in to see just what Microsoft has in store for the rest of the year.

[10:26] The attendees have filed into the LACC West Hall and a video package with man-on-the-street comments is playing on the big screen.

[10:30] The actual presentation is taking place in a sliver of the West Hall set up with bleachers and a stage to accommodate a few hundred people. Music blares over the loudspeakers leading up to the conference's scheduled 10:30 a.m. Pacific start time.

[10:31] "What you waitin' for," asks the house music, as a bank of monitors to the left of the main stage momentarily goes blank. But then the music fades, the monitors return to normal, and Don Mattrick is introduced to the stage.

[10:33] Mattrick welcomes the crowd and touts the Xbox 360's 2007 lineup, saying it proved that Microsoft delivers the biggest and best hits for gamers. He says Microsoft's goal is to deliver to its fanbase, but also transform the industry by delivering to everyone else as well.

[10:34] He plays up the mass appeal angle, but name drops Fallout 3, Resident Evil 5, and Fable 2 to make sure we know the hardcore crowd isn't left out. Cue a video clip.

[10:35] A 1950s-style family sits around a table as a narrator pitches underground nuclear blast-proof vaults from VaulTec. Clearly the Fallout series' twisted sensibilities remain intact.

[10:36] After the humorous clip, a little bit of prerendered footage of Fallout 3 is shown, and Bethesda's Todd Howard takes the stage. A trailer for the game will debut later today on Xbox Live.

[10:38] Howard takes us through a bit of the game, leaving Vault 101. He shows the ability to play in first-person mode or third-person mode as he walks through a devastated city. The Pip-Boy 3000 wrist-mounted menu screen takes him through an assortment of perks, weapons, and radio stations. He emphasizes that gamers can play it with an emphasis on combat, stealth, or persuasion. There's also the option to fight in real-time or turn-based modes. His first kill is suitably gory.

[10:39] His next kill is no nicer, coming with a combat shotgun at point blank range. He runs into a defense turret, and mentions the ability to hack it and take control, or just blast it with a laser rifle.

[10:42] The next obstacle is a sentry bot, which he takes out with the help of an EMP grenade. Howard emphasizes that the game reacts with the way the players goes through it: good, bad, or in between. Troops from the Enclave come down on him in a helicopter transport, so he switches to The Fatman and launches a bomb across the map at the soldiers. He wraps up the demo to applause and a smattering of cheers. He also mentions "substantial" downloadable content for Fallout 3 that will be exclusive to Xbox 360 and Games for Windows.

[10:43] Resident Evil 5 producer Jun Takeuchi takes the stage with a translator. Both men are wearing matching Umbrella Corporation zip-up sweaters. They're here to show a playable demo of the game.

[10:44] RE5's director plays the demo, which sees Chris walking through a hovel. He quickly dispatches a shovel-wielding zombie, then one with a scythe, and another with a club. He comes out on the rooftop of the building and can move no further, which brings us to a new online cooperative mode of the game.

[10:46] The second player takes control of Sheva, another agent for the same group as Chris. He boosts her over a gap onto a neighboring rooftop, where she quickly mows down a horde of zombies, with Chris sniping a few of his own from the next roof over. Some of the zombies appear to have flaming crossbows.

[10:47] Sheva makes her way to ground level as Takeuchi emphasizes the cooperative nature of the game and the necessity of working together. They make it to a cutscene that shows a lean and menacing sack-headed zombie wielding a chainsaw. That's it for the demo.

[10:48] RE5 will be a simultaneous worldwide release, Friday, March 13, 2009.

[10:48] Peter Molyneux takes the stage now. "Fable 2 is finished," he says.

[10:51] Molyneux introduces a clip of the game showing off the world of Fable 2. A sparrow flies through the fantasy world and into a walled city surrounding a castle. People go about their business in the very active city as the bird perches on a ledge, and releases the most dramatically depicted dropping the game industry has ever seen. It lands on a small child's head, who's told it's good luck. That, Molyneux says, is the beginning of the game.

[10:52] Now there's a demonstration of the online cooperative play in Fable 2, and a mechanic that will let players invite their friends into the game world without lobbies or other atmosphere-breaking elements. He says you can hack and slash together, go into a bar and get drunk, or otherwise just hang out. Molyneux introduces us to his in-game wife.

[10:53] Molyneux and his co-op partner interact with his family in a variety of ways before the demo ends. One last bit of news: Fable 2 will be out in October of this year, as Molyneux previously hinted.

[10:55] It's time for the Gears of War 2 part of the show, as a clip shows a dramatic firefight with a casual voiceover stating, "I have a rendezvous with death." The developer formerly known as Cliffy B takes the stage.

[10:56] Cliff says the Locusts are back in Gears of War 2, and they're sinking entire cities. It's time for another playable co-op session, this one with Dom and Marcus going through a scripted bit before a technical glitch resets the (apparently taped) play-through.

[10:58] While Cliff Bleszinski fiddles with the controller on stage to keep up appearances, Dom and Marcus are taking fire from a handful of new nasties. There's a front face curbstomp, a spider-like enemy, a flamethrower-wielding locust, and a fair bit of chatter interjected by Marcus himself.

[11:00] The pair wind up on a rooftop that crumbles underneath them. After falling floor-by-floor back to ground level, the pair re-enter the fray, blasting away some explosive crawling Locusts before coming under siege from a massive Locust monstrosity and dozens of foot troops. Marcus pulls out a nasty Gatling gun and plows through a few before they retreat to a wrecked elevator.

[11:02] The big nasty pursues them, and the pair get behind the Brumak and decide to try riding the monster, which closes out the demo. Cliffy brings up a new mode called Horde, which allows players to take on wave after wave of increasingly difficult Locusts. The game will be available November 7.

[11:03] Don Mattrick returns to the stage and thanks all the presenters. He talks about the first moment everyone in the room was captivated by interactive entertainment and knew it would take over the world. Mattrick says that day has arrived, and says the industry belongs to everyone.

[11:05] He talks about a projected billion in game sales this year, and touts it as bigger than box office and bigger than DVD movie sales. He says the best way to look at sales is by combining hardware, software, and online. It's charts time, as he emphasizes that third-party game sales are higher on the Xbox 360 than PS3 and Wii. He declares that the Xbox 360 will sell more units worldwide this generation than PS3.

[11:06] He says Xbox Live is 12 million members strong now, and said that consumers have spent more than billion on Xbox Live since it launched less than three years ago.

[11:07] More stats as he touts the success of TV and movie shows sold or rented over Xbox Live. Those sales account for one-third of all US Xbox Live paid downloads. He welcomes NBC and Universal Studios as content partners to the network.

[11:09] A sizzle reel showing movies like 12 Monkeys, Fast and the Furious, and The Bourne Supremacy runs. Mattrick says the NBC-Universal content is available today in the US.

[11:09] Mattrick introduces John Schappert to talk about the next wave of growth in gaming.

[11:11] Schappert talks about innovation in gaming, entertainment, and social experiences. He says a consumer electronics device will be completely reinvented through software, bringing us to a new Xbox 360 dashboard.

[11:13] "Welcome to the new Xbox experience!" He shows a new dashboard with the leaked Avatar, which shows up on the GamerCard next to points and achievements information. The Avatar seems to be a cross between the stylized Nintendo Wii Miis and the realistic Sony Home avatars.

[11:14] A video clip explains some of Microsoft's approach to avatars, with customizable clothes, hair styles, and so on. "Where else but Xbox Live can you introduce an avatar and immediately have it become a community of 12 million avatars," asks one of the system's designers. That question draws a few laughs from the crowd.

[11:15] Schappert talks about having a Live Party, with a group of eight friends connected, chatting, and playing games together with their avatars. He joins a "Photosharing Party," which lets him show off his pics to the other people in the room.

[11:16] Next is Xbox Primetime, where gamers can play along with a variety of game shows. He talks about 1 vs. 100 Live, an Xbox exclusive multiplayer game show where players can play on the stage or in the crowd, with a live host running the show.

[11:19] Next up is the games channel, which Schappert uses to show off the new Uno Rush. He starts it up and his entire party jumps into the game together and starts dropping cards. Schappert promises the best lineup of Live Arcade titles ever, starting with Geometry Wars 2 from Activision and developed by Bizzare Creations.

[11:20] It looks hectic, of course, and the presence of four players on the screen isn't going to make it any simpler. Next up is another shooter sequel, Galaga Legions. Schappert calls it the first true sequel to Galaga and says it comes form the same team that did Pac-Man: Championship Edition. It will be available next month.

[11:22] He introduces a new guest speaker: It's GLaDOS from Portal, who introduces Still Alive, a spin-off coming to Live Arcade this fall. Then it's a blink-and-you-miss-it trailer for a South Park XBLA game.

[11:22] It's about time for the first wave of community-made games from the XNA experiment, Schappert said. The first wave of those will arrive in the fall.

[11:24] There's one more content partnership to announce, and it's the oft-rumored Netflix deal. XBL members who are Netflix subscribers will be able to stream 10,000 titles from the movie rental service's library. You can even share your Netflix movies and TV Shows with friends in your Live Party.

[11:26] Schappert introduces Microsoft SVP Shane Kim, who takes the stage and welcomes everyone to the party. He echoes Mattrick's intro about last year's lineup of games being amazing, then moves to this year's lineup. He brings up third-party exclusives like the downloadable episode of GTAIV for later this year, and says 1,000 games will be available on Xbox 360 by the end of the year.

[11:27] He brings up Rare, and shows off a trailer for the new Banjo-Kazooie game, Nuts and Bolts, which sees players constructing their own vehicles to help them in an adventure spanning land, air, and sea.

[11:28] That's followed by a trailer for Viva Pinata: Trouble in Paradise. It shows off some of the pinatas and new regions. The clip also gets into the new Xbox Live Vision camera compatibility, which will let players add pinatas to their gardens by taking pictures of special trading cards.

[11:29] Kim says the original Banjo-Kazooie game will also be released on Xbox Live Arcade this holiday season.

[11:31] There's more SceneIt! on the way, as a trailer for Box Office Smash! plays. Kim says the game will let you play online with friends and download new questions and content through Xbox Live. The game will make use of the avatar system.

[11:33] Along the same line, he introduces Codemasters' You're In the Movies, developed by Zoe Mode. Kim says the game features brief games and improvisations that are then incorporated into movie clips. A demonstration has one player running in place as his image is spliced onto an image of a character in clown pants running against a bungee tether.

[11:34] The next game showcases a player swatting hornets off a screen in a game highly reminiscent of Sony's EyeToy.

[11:35] The third game calls upon the player to dance and then strike poses where pointing hand cues dictate. There's some "freestyle" time built in as well.

[11:36] Kim shows a "masterpiece" film that the team created about a lab experiment gone wrong. A radioactive lizard grows massive and threatens a town as Kim and his helpers attempt to stop it with footage pulled from their minigames.

[11:37] A director's mode will let players control the action, make their own edits, and upload them to share with the world. The game will come packed with an Xbox Live Vision camera when it ships this holiday.

[11:38] Kim moves to music games, saying an average of 3.5 million songs are downloaded from Xbox Live every month, adding 80 percent of all song downloads for these games take place on the Xbox 360. He introduces Kai Huang, founder of RedOctane.

[11:40] Huang is here to talk about Guitar Hero: World Tour, and says it will take music games to a whole new level. He talks about the touch-slide guitar, the wireless drum kit, eight-player online Battle of the Bands mode, and a tracklist including more than 85 songs at launch.

[11:42] He also touches on the Studio Mode that lets players create and share their own music online. He says it will help a community of aspiring artists become the next big rock stars. With the launch of World Tour, gamers will be able to download an REM track pack with three songs from their next album before anyone else. Guitar Hero also has exclusive rights to The Eagles and Van Halen, and the new Metallica album will be available as a full album download exclusively on Guitar Hero, first with GH3 this September, then World Tour in the fall.

[11:43] Now it's time for another of the leaked bits, as a trailer runs for Lips. The karaoke game apparently uses special mics with LED lights in the handle. Apparently the game will hook up with the Zune to add new music to the game.

[11:45] Kim introduces Keiichi Yano, creator of Elite Beat Agents, Gitaroo Man, and Lips. He says Lips will let people enjoy the music they love in fresh and exciting ways. It will let gamers sing from their own music collections; he specifies that you can plug in an iPod as well to play from your own songs. The mic is motion-sensitive, he notes, allowing for some interactivity even when they're not singing.

[11:46] He introduces Duffy to sing her song "Mercy" in the game. She seems to be doing pretty well.

[11:47] This might actually be a live performance, as she's nailing the notes, but missing an on-screen cue to tip the mic in the air.

[11:49] Duffy gets a hearty round of applause, and may have been the most photographed part of the conference to date. She'll be one of the featured artists in the game.

[11:50] Kim takes the stage back, and starts to talk about Rock Band. He brings up the exclusivity window for the Xbox 360, and introduces Harmonix CEO Alex Rigopulos to talk about the game.

[11:52] He introduces "the entire Rock Band 2 on-disc--86 songs--all listed on a tiny PowerPoint slide. Bikini Kill, Sonic Youth, Guns n' Roses, Megadeth, Testament, and many others. Bob Dylan's "Tangled Up in Blue" will be in the game, as will AC/DC. the latter will be exclusive to Rock Band 2, with "Let There Be Rock" being the first track involved. Beck, Interpol, Modest Mouse, AFI, and others are included, as well as 20 bonus tracks making for more than 100 songs on the Rock Band 2 soundtrack.

[11:53] Almost all of the original Rock Band songs will be playable in the sequel, and sometime this holiday season Harmonix will reach a total tracklist of 500 songs.

[11:55] Now Kim has introduced Square Enix boss Yoichi Wada. He talks about the Xbox 360's ability to draw in new players from around the world, and says Square Enix has been building a partnership with Microsoft.

[11:56] He talks about Star Ocean, The Last Remnant, and Infinite Undiscovery coming to Xbox 360, saying the latter would be released first: September 2 in North America, Sept. 5 in Europe, and Sept. 11 in Japan and Asia.

[11:56] Star Ocean: The Last Hope will arrive in spring of 2009.

[11:57] A clip of the game will appear later today on Xbox Live. As for The Last Remnant, it will release on Xbox 360 first this holiday season. He cuts to a clip of the game.

[11:58] The trailer showcases the character and monster design of the game, as well as a bit of voice acting. It will be released November 20 worldwide.

[11:59] Wada admits the clip was short, but said he hopes it's enough to get people excited about the game. The Last Remnant will also be available for Games for Windows, but a launch date hasn't been decided yet.

[12:00] Mattrick re-takes the stage as Wada leaves to applause. Mattrick gives the party line again, but Wada comes back out with "one more big announcement."

[12:02] He shows a trailer for a game. There are winged dragons flying through a canyon and up above a strange fantasy world. Cut to a sci-fi setting with flying soldiers dropping into view. Then there's a gigantic airship itself shaped like a dragon, then the standoff of Final Fantasy XIII characters shown in previous clips of the game.

[12:03] Final Fantasy XIII is coming to Xbox 360. "The future belongs not to those who wait..." The crowd roars.

[12:04] The game will be available at launch in North America and Europe.

[12:05] "We believe that releasing an Xbox 360 version of final fantasy 13 will allow us to provide the game to even more fans in the two regions of North America and Europe," Wada said.

[12:06] Wada thanks Mattrick, and Mattrick thanks the crowd. That's the end of the conference, which draws applause form the crowd.