Microsoft @ E3, wrap up
Halo Reach takes the fight into space

After looking at a glimpse of what’s next for Microsoft yesterdy, we’re getting more details and in-depth demos today. We liked what we have seen and heard. For one, Microsoft has locked-in some pretty amazing exclusive deals (Crytek, Epic, ESPN… more), and that is always good for the Xbox franchise, there’s no question about that.

There were a few stars on this show, including Gears of War 3, Halo Reach and Kinect of course. The action games haveshown a good demonstration of what the console is capable of (technically speaking) and this is clearly a must-have for any E3 show. Graphics is still a big seller, even if there is a category of players who don’t care much. Hardcore games buy 8 games a year (versus 3 for casual gamers), so they are a great customer base to address.

Microsoft @ E3, wrap up
If Dance Dance Revolution was Metal Gear, Dance Central would be MGS2

Secondly, Kinect has been demonstrated to be a force to be reckoned with, and besides the potential latency issues (it does seem very OK though) for fast FPS and the ability to aim accurately, I’m not sure what Nintendo and Sony can do to stop it. That is assuming that it works as well as it’s been demoed – we’ll confirm that this week. There are also tons of appswith which Kinect will do well even without a blazing fast latency: fitness, computer-control, casual games. Microsoft is going to open Xbox to a new realm of applications, and customers.

The new hardware isn’t cheaper, andit means that Microsoft believes that exclusive franchises and Kinect can help grow the user base without a price cut – good for their margins. More money means more exclusve deals in the future… Despite the improvements, the new hardware is also a cost-reduction (for Microsoft) as we expect it to cost less to build than the old, bulkier, Xbox 360. That’s the wonder of consumer electronics: cheaper, faster, better.

Microsoft has put on an impressive show – now the pressure is on Nintendo and Sony to show us what they have in store to counter this.

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