Yeah, I'm shaking my head over the hyperbole extended to this conference as well. The big highlights for me were them showing games like Splinter Cell and Alan Wake, but there were also a lot of things that were disappointing such as the no show from RARE, and lack of unannounced new ips. Overall, it was a good conference and certainly better than last year, but I wouldn't say it was Microsoft's best conference. I recall being more excited when they showed off Gears of War and Halo 3 for the first time.
The Project Natal announcement was probably the most underwhelming part of the event. They positioned it as some sort of major announcement -- and, true, it is a big announcement to Microsoft -- but the way they showed it off made me think that this device doesn't appeal to me whatsoever and that perhaps Microsoft doesn't 'get it' like Nintendo does with motion control. Everything they showed off, software wise, looked like a complete gimmick. It was more of an enhanced eye toy or 'at the movies' than it was the next wii-mote; certainly not a flexible device to have an entire platform center around like the Wii. It also looked extremely early and rough.
It's almost as though a Microsoft exec said, "hmm...what can we do that's different, but similar to the Wii, but comes across as revolutionary? Aahhh..I know, let's remove the controller entirely!". And frankly, I disagree with Spielberg and co. about the controller being a barrier and this device somehow bringing people together -- the casual audience has shown no problem adjusting to peripherals like guitars, wii motes, zappers, etc...in fact, that's part of the appeal of the Wii. Having something tangible, in other words, is important. Buttons are still important. There's a certain level of abstraction that makes games fun because they're not exactly 1:1 with real life. And much like how there is an 'Uncanny Valley' effect with graphics, I think this will extend into the world with motion control as was clearly displayed on stage today with a number of different embarrassing and awkward sequences. Certainly Wii Fit and Mario Kart sold ridiculous numbers in part due to the plastic they came included with.
By not making it a controller device, they have effectively separated the types of games suitable for the gimmicky mini-games and the hardcore titles, and that's the opposite direction that Microsoft should be making with a new device. I just don't see the application that this is going to have with the Xbox 360's bread and butter, and to alienate them on a device leads me to believe this will be a pretty big failure.
Announce new games, show off their already amazing lineup this fall and in early 2009, and hopefully announce either a hardware revision and/or a price drop? That's all they really need to do in order to have a good show. The quality of the show will then depend on how good their new IP announcements are and the titles that will be coming out soon and playable on the show floor. Could be merely 'pretty good' but not spectacular, or it could be pretty amazing -- again, depending on what they show. I certainly can't see them having a bad E3, just like I didn't see Microsoft having a bad E3 either. Just because Microsoft announced a new tech doesn't somehow mean Microsoft ran away with the show.