Hardware takes a back seat to video games at E3 summit

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With video game sales continuing to surge despite a slowing economy, this week's E3 Media & Business Summit in Los Angeles should be marked by plenty of optimism and excitement, even if actual surprises may be few and far between.

The worst-kept secret in the game industry — Microsoft's decision to drop the price of its most popular model, the 20GB Xbox 360 Pro, from $349 to $299 — has been out of the bag for weeks.

With little new on the hardware front, the focus on the show floor of the Los Angeles Convention Center this week will be squarely on the games themselves, as retailers, analysts and journalists try to figure out which title is most likely to emerge as this holiday's version of "Halo 3" or "Grand Theft Auto IV."

Michael Goodman, director of digital entertainment at Yankee Group, said he doesn't expect Sony Computer Entertainment to respond at E3 with a price drop for the $399 Blu-ray Disc-equipped PlayStation 3.

"I think Sony would have felt a lot more pressure if the Xbox 360 had been cut by $70 or $100," he said.

Nintendo, the leader in the console wars, also has little incentive to drop the price of the $249 Wii, given that they can't keep up with demand as it is.

On the software front, Chris Carle, entertainment and lifestyle editorial director for IGN, noted there are several contenders that will get a closer look, most notably Epic Games' "Gears of War 2" and Lionhead Studios' "Fable 2."

"I think 'Gears' has the most potential to come close to that level of game," he said. "But probably the biggest-selling game this holiday is going to be Activision's 'Guitar Hero IV,' which is now going to be shipping with drums.

"This year's E3 is mainly going to be about sequels, as it has been a lot lately," Carle said.

David Ward is a freelance writer based in San Diego.
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