The Electronic Entertainment Expo kicked off in Santa Monica, Calif. Tuesday night with the massive Microsoft event inside the outdoor amphitheater at Santa Monica High School. The splashy event kicked off with a group of die-hard Halo fans and high school rockers from Libertyville, Illinois, something of a cult favorite on the web called Corporeal. Hannah, the violinist, brought the house down with the Halo theme.
That quickly gave way to Microsoft's debut of the rock-band Xbox 360 game Rock Band, where corporate vice president Peter Moore grabbed a guitar and played the game live on stage with the group Harmonix. He had fun, didn't mind embarrassing himself (which he did, but it sure was fun to watch.)
But the real news came from my exclusive interview with Moore where he confirmed that Microsoft will not match the price cut launched bySony on Monday: "We're very comfortable with where we are with the pricing. We are heading into our third holiday with the price we came into at launch and that's almost unprecedented in this industry," Moore tells me. "We continue to add value with the games, with Xbox Live and be aware that we have the opportunity of course to be able to start that price waterfall, but that there is no announcement to be made right now."
Many insiders confided to me that with Halo 3 due out exactly 11 weeks from now, Microsoft would be foolish to cut the price of Xbox. With $28 billion in cash in the bank, the company doesn't need to. Sony might be on the ropes, but Microsoft can afford to go a few more rounds even as Nintendo continues to gain ground.
Moore tells me the company sees a perfect storm of sorts in the industry right now. A major platform shift driven by a crush of new titles, many exclusive to Xbox, including Madden 2008 (look for my post including my interview with New Orleans running back Reggie Bush later today. He was hysterical!), Grand Theft Auto 4 and of course Halo 3.
"This year, for the first time people will spend more money on games than on music," Moore says. "You've got a situation reminiscent of where we were in the holiday season 2004 in which those three titles occupied 30-odd percent of all game units sold. "You've got the same perfect storm brewing again this year."
The Halo 3 preview Tuesday night was key for Microsoft. But after so much build-up for the Sept. 25th launch, the reaction was a tad tepid. This is a billion-dollar franchise for the company and the lynchpin in Xbox's success. Peter Jackson (Lord of the Rings) will tell the latest Halo 3 story for Microsoft.
Moore compared Halo to "Star Wars," "an epic work of fiction," he called it. Halo has sold 15 million units; Xbox Live users have logged over 1 billion hours.
Moore also unveiled a special, new Halo 3 special edition Xbox 360 console. Strangely, there was no applause of any kind. But maybe we were all just tired since the event went 90 minutes. But the muted reaction to the new console was weird.
Other key announcements:
* A new controller called the Big Button Pod that works only with the game SeenIt now, but others soon. It looks suspiciously like the easy-to-use handheld from Nintendo'sWii, but without the cool capabilities.
* 7 million Xbox Live members now; 10 million by this time next year.
* A sweeping new partnership with Disney to bring the studio's library to Xbox Live; available immediately for download in HD.