E3 2010: Cutting-Edge Video Game Technology

As it does every four or five years, the video game industry is rebooting itself this year. Instead of rolling out brand new game systems for the living room, though, manufacturers are looking to build on the market they’ve already created.

“The video game sector is nearing a turning point, with the potential for new hardware innovations and a strong development pipeline to reinvigorate growth,” says Colin Sebastian, an analyst with Lazard Capital Markets.

There was a lot of new hardware and technology on display and being talked about at E3, the gaming industry’s annual trade show. Here’s a look at some of the more interesting pieces.

By Chris Morris, Special to CNBC.com
Posted 16 June 2010

System: Xbox360
Company: Microsoft

Microsoft’s gesture-recognition controller – a camera that is able to detect subtle movements and sounds from players – lives up to the hype and is probably the biggest bet at E3. Rather than emulating what Nintendo did with the Wii, the company is trying to further evolve the idea. But with no price yet announced, it’s still uncertain how eager the mass audience will be to try something different.

System: Playstation 3
Company: Sony

Sony’s motion control device has more in common with the Wii than Microsoft, but don’t write it off as a clone. The system will launch with 15 games that cater to a variety of players – from the casual set to the core crowd. And the relatively low price ($50 for a single controller, $100 for a bundle pack) could give Move an advantage at retail if Microsoft comes to market with too high a price.

System: 3DS
Company: Nintendo

Nintendo knows it’s in a tough fight with Apple. And the way to turn heads is to offer something completely unexpected. 3D without the glasses is a pretty good way of accomplishing that – and the system is impressive - but it doesn’t answer the question of whether people will still be willing to pay the substantial price difference on games for this vs. the iPhone.

System: Xbox 360
Company: Microsoft

The design of the original Xbox 360 was never really criticized, but the components have gotten a bit long in the tooth. Microsoft’s new system, hitting stores this week, boasts a 250 GB hard drive, built-in 802.11n wireless support and (reportedly) a much quieter fan system – that won’t drown out sounds from your game.

System: Multiple
Company: OnLive

Imagine if any screen you owned – your smartphone, your TV, your rinky-dink netbook – was able to run top-tier games with all the settings at maximum. That’s the concept behind OnLive, a cloud-based gaming service that just launched. PCs get the service first – and HDTVs are right behind – but the company is already exploring new screens to conquer.

System: Wii
Company: Nintendo

After a pretty notable splash at its press conference last year, Nintendo didn’t mention this heart rate and blood oxygen monitoring peripheral in 2010. (It says it didn’t want the device to be overshadowed by other announcements, in part.) A video game device designed to make you relax sounds a bit odd, but so did a balance board that helped you exercise – and today “Wii Fit” is one of the company’s best selling games.

System: Standalone
Company: Inspired Instruments

While “Guitar Hero” and “Rock Band” might get people interested in learning to play guitar, the instruments are no help at all. The YouRock Guitar, though, can be plugged into either a game system or amplifier, letting people who want to learn to actually rock take the first steps.

System: N/A
Company: Neurosky

Controlling what happens on screen with your mind sounds like the stuff of science fiction, but Neurosky is making it happen. The company, which provided the technology for last year’s MindFlex toy from Mattel, makes the Mindset, which reads brainwaves generated when a user concentrates. It’s early tech – and doesn’t always work flawlessly - but it’s enough to attract investors, who recently sunk $12.5 million into the company.