Nov. 4 Launch Date for Microsoft’s Kinect, Price Unknown

The biggest surprise of the briefing was by Don Mattrick, senior vice president for Microsoft’s Interactive Entertainment Business, who said the company started shipping a smaller Xbox 360 SKU with a 250-GB hard drive at the same $299 that the current model with a 120-GB hard drive costs. The new model offers built-in Wi-Fi using the 802.11n standard, whereas the existing model only offers an Ethernet port. The current model will have to be phased out, but Microsoft didn’t indicate how long that might take or say how many units of the current SKU are still in the retail channel.

About 15 exclusive games will ship for the Kinect launch, including Ubisoft’s Your Shape: Fitness Evolved, Dance Central from Rock Band makers Harmonix and MTV Games, and four first-party Microsoft games: Kinect Animals, Kinect Joyride, Kinect Sports and Kinect Adventures! Microsoft referred to its animal interaction game as Kinect Animals in a news release, but called it Kinectimals at the briefing. Also on tap for Kinect will be a Star Wars game from LucasArts in 2011 and a new Forza racing game from developer Turn 10. All the games shown were clearly targeted at young gamers and other mainstream consumers as opposed to core gamers, another sign that Microsoft is looking to attract many of the same players that Nintendo did with the Wii. Pricing wasn’t provided for any of the games.

Electronic Arts announced separately that it was making a version of its previously announced EA Sports Active 2 available for Kinect at $99.95. Users “will have complete freedom of motion for a deeper, more effective workout, similar to the experience” of Total Body Tracking system on the PS3 and Wii versions that uses wireless motion sensors in leg and arm straps, EA said. Unique to Kinect for Xbox 360, however, will be “the ability to navigate workouts with voice and gesture recognition,” EA said. Like the PS3 and Wii versions, the 360 Kinect SKU will come with a heart rate monitor, it said.

Microsoft also unveiled a Video Kinect feature that will allow Xbox Live gamers who own the Kinect controller, which includes an RGB camera and microphone, to perform video and audio chat with one another. The company plans to link Video Kinect with its Windows Live Messenger next year, it said. Microsoft disclosed the motion control system’s final name on Sunday night at an elaborate event in Los Angeles, at a theater where a Cirque du Soleil production is performed.

Microsoft also said Monday it had an exclusive deal with ESPN that the companies said will provide Xbox 360 users with instant, on-demand access to more than 3,500 live ESPN sports events, including Major League Baseball, international soccer, tennis, NBA basketball, and college football and basketball. The service will be free for Xbox Live Gold members, providing another incentive -- along with existing on-demand Netflix movie viewing -- for 360 users to pay for a subscription.

Microsoft is also expanding its Zune music service onto Xbox Live, saying a Zune Pass subscription, sold separately, will allow users to instantly play an unlimited number of songs from a catalog of more than 7 million tracks. The Xbox Live service, meanwhile, will roll out this holiday season to nine new regions: Brazil, Chile, Colombia, Czech Republic, Greece, Hungary, Poland, Russia and South Africa, Microsoft said.

E3 Notebook

There’s “a disconnect” between how the U.S. game industry is actually doing versus how published reports say it’s doing, Entertainment Software Association President Michael Gallagher told reporters at E3 on Monday. Industry sales have been weaker for much of this year versus 2009 and that’s what reports keep dwelling on, he said. But he said the game industry traditionally does only a small percentage of its business in the early part of a year, with the bulk of sales heavily weighted around the holiday season. Also, NPD’s sales data continues to not give a 100 percent accurate perception of what is happening because, among other reasons, its data doesn’t include downloads, which are growing significantly, he said. Wal-Mart and certain other major retailers also don’t supply their sales data to NPD, he said. The U.S. game industry sorely needs a company to provide data that takes into account the whole picture, he said. “Somebody had better do it,” he said, leaving open the possibility that a trade group like his might have to. The industry is “doing extremely well,” and the strong slate of new games and coming introductions of Kinect, PlayStation Move, stereoscopic 3D console games and the Nintendo 3DS handheld system bode well for sales in the back half of the year and beyond, he said. He predicted oral argument will start “some time in the fall” for the long court battle over whether states like California can make it illegal to rent or sell mature games. The Supreme Court agreed to hear the case and he called it “a great opportunity for us to be engaged in the conversation. … We're optimistic about the outcome.” He told reporters it could finally put an end to the issue, but said, “There is significant risk” for all forms of entertainment, not just games, if the game industry loses the case and states are allowed to enact such laws. It will lead to the possibility of 50 states having 50 different rules for how mature games can be sold, he said. Current consoles’ parental control settings are all based on the current rating system, so a universal rating system that would end the Entertainment Software Rating Board rating system would pose an added dilemma, he said. Even if the specific case before the Supreme Court deals with games specifically, he predicted some states will try to push for the same rules to apply to other forms of entertainment. Activision Blizzard is exhibiting at E3 this year even though it continues to not be a member of ESA, Gallagher said. Despite the loss of Activision, he said ESA “doubled our membership” since that publisher left the group. He said ESA would not bar Activision from exhibiting at E3 unless it became a member. “We have to run in an open way” and “can’t pursue a position that would be hostile,” he said, expressing hope that the publisher will eventually rejoin. “We have regular dialogue with Activision,” he said. Attendance at this week’s E3 is expected to be up 10 percent from last year, at about 45,000 people, he said. Square feet of exhibit space is up about the same amount, at 350,000 square feet, he said. Retailers are also back in full force at the show this year, after many skipped it in recent years, he said. Nearly 400 people representing an unspecified number of retail companies are expected to be attending E3 this week, ESA said.