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E3: Game Makers Pull Out All the Stops

A line of people waiting to play Assassin's Creed from Unisoft.
CNBC
A line of people waiting to play Assassin's Creed from Unisoft.

Last night R & B superstar Usher shouted to the thousands packing the Staples Center: "Activision really knows how to do it big."

You'd never guess from game developers' E3 presentations that game software sales dropped 7 percent year-to-date through April.

This is game companies once-a-year opportunity to roll out their schedule and get fans excited, appealing directly to the bloggers and fan sites that chronicle every upcoming game.

This year Activision Blizzard, the world's largest game maker, went bigger than ever before. CEO Bobby Kotick told me yesterdayhe wanted to make the point that Activision isn't just another game company — it provides entertainment experiences. It certainly did last night: renting out the Staples arena for a star-studded extravaganza, replete with laser lights, backup dancers, gigantic video screens and all the bells and whistles you'd expect from a multi-million dollar concert tour.

Unveiling its new DJ Hero 2, star DJs z-trip and DeadMau5 (pronounced "dead mouse") brought up the base so it reverberated the stadium far more than the earthquake that shook Southern California yesterday. Tony Hawk even showed up on his skateboard to promote his new game. Activision's stock is underperforming the market—down over 10 percent over the past 12 months while the Dow is up about twice that much. But the company must expect the millions of dollars it spent on last night's spectacle to pay off with positive publicity and game sales.

THQ's UFC games on display
CNBC
THQ's UFC games on display

The other game makers didn't rival Activision's blow-out, but they didl deliver high-energy game demos and performances to packed theaters and even some standing ovations. And all the presentations in downtown Los Angeles' old theaters had some celebrity element.

Electronic Arts trotted out Joe Montana for Madden 2011. Ubisoft put TV actor and comedian Joel McHale up on stage, also bringing in Olympic athlete Sean White. The game maker unveiled its new Michael Jackson dance game with the backup dancers from Jackson's "This Is It."

On the heels of Microsoft, Sony and Nintendo unveiling new motion sensors, the game companies highlighted games that put those motion sensors to use. The fitness category seems to be exploding, with all the game makers featuring products that act as personal trainers. Electronic Arts' 3D game inspired oohs and ahhs from the audience.

E3 Electronic Entertainment Expo - A CNBC Special Report
E3 Electronic Entertainment Expo - A CNBC Special Report

And of course blood and guts and GUNS were front and center.

Electronic Arts brought 24 people on stage to test its new Afghanistan "Medal of Honor" game. Ubisoft's "Assassin's Creed: Brotherhood" earned a full standing ovation. For many of the violent game franchises the developers were the stars. It'll be many months before some of these games hit stores, and after this week's show gamers will be ready and waiting. We will see if these products can lead to an uptick in game sales.

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