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Virtual reality devices to dominate 2016 Tokyo Game Show

Virtual reality (VR) players are expected to steal the show when one of the world's top gaming conventions kicks off on Thursday.

More than 600 exhibitors and over 1,000 new games—from Japanese and foreign firms—will be on display at the Tokyo Game Show, one of the most anticipated annual gatherings on gamers' calendars.

The show, put on by the Computer Entertainment Supplier's Association, will celebrate its 20th anniversary this year with a dedicated area for VR products, a reflection of just how dominant the phenomenon has become in the gaming sector.

Sony is among the brands generating buzz, with the PlayStation VR, a virtual reality headset for PS4 consoles, rumored to make an appearance at the show ahead of its October launch. According to IDC, about 43 million PS4 consoles have been sold so far.

A reference model of the Sony PlayStation VR viewer is on display with a PlayStation 4 system during a CES press event on January 5, 2016 in Las Vegas, Nevada.
Alex Wong | Getty Images
A reference model of the Sony PlayStation VR viewer is on display with a PlayStation 4 system during a CES press event on January 5, 2016 in Las Vegas, Nevada.

"Sony will be the first company to popularize VR," Patrick Moorhead, president and principal analyst at Moor Insights & Strategy, told CNBC's "Squawk Box" on Tuesday.

Existing headsets just don't cut it, he explained. The Oculus Rift was hard to manage, while the Samsung Gear relied on a smartphone, which isn't the best platform for VR's high resolution, Moorhead said.

The PlayStation VR won't be restricted to games, though. It could also be used to show live-theater performances, tours of historical sites and music videos, Atsushi Morita, Sony's Japan and Asia president for computer entertainment, told media this week.

"For Sony, which is aiming to generate profits as the provider of a VR platform, the announcement of lots of video and music content is a positive development," Nomura analysts said in a Tuesday report.

"The announcement of PS VR content by Sony Music Entertainment, such as the 'Don't be Afraid' video and 'Anywhere' VR, will likely attract attention as examples of Sony leveraging its strengths in video and music as well as just games."

The PlayStation VR is expected to retail for around $400, considerably less than the $600 Oculus Rift and the $800 HTC Vive.

The PC-operated Vive headset, HTC's first entry into the VR market, will also be on display at the Tokyo Game Show, alongside an array of games and hardware accessories to flesh out HTC's VR ecosystem.

HTC hopes to lure conventioneers to its exhibition with new games such as Kai-ri-Sei Million Arthur VR by Square Enix and Linked-door loves Space Channel 5, a multi-player game that uses social VR software from Japan's giant telecom operator KDDI.

Another Taiwanese firm, MSI, is also slated to announce the world's first-ever VR backpack, the VR One, essentially a PC and headset system.

"It is sure to have massive impact on the global VR market by removing the current VR experience limitations of having to stay close to the PC and the monitor due to cables," MSI said in a press release. Designed for use with the Vive, the backpack weighs under 4 kilos (about 8 pounds) and can deliver 1.5 hours of gameplay.

Other companies expected to unveil new VR games at the three-day show include Bandai Namco, Capcom and Sega. Neither Nintendo or Microsoft are participating this year.

The big question for exhibitors, however, is whether they can expand the VR market, said Moorhead. Selling to hardcore gamers was one thing, but getting newbies on board is the next level, he noted.

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