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E3: Consoles & Core Gamers are Back

Electronic Entertainment Expo E3
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Electronic Entertainment Expo E3

It's day two of the annual video game convention and some new themes have emerged as the whole industry battles the rise of games on smartphones and tablets.

New Devices

For the first time in years we're seeing major device announcements out of E3, as hardware makers look to give gamers new reason to play games on gadgets other than their smartphones and iPads , Tuesday Nintendo unveiled a new console, the "Wii-U" with a motion sensor touch-screen controller, which has the feel of an iPad. It drew oohs and ahhs from the audience but the jury's still out on what it'll do for Nintendo: there's no price tag yet and it's not launching until next year.

Handheld players are upping their game against smatphones

Sony's making it pretty clear it wants its new "Vita" handheld player to hold its own against smartphones by including optional cell phone service. And Nintendo, with its living room console not launching until 2012 Nintendo is making a big push for its 3DS, introducing a slew of new games for its 3DS which launched in March.

But Wedbush Securities analyst Michael Pachter warns these device makers are chasing an ever-shrinking market. He predicts that 70 percent of people who now play on dedicated hand-held devices will switch to play games on smartphones.

Hard-Core Gamers in the spotlight

With social gamers increasingly shifting to mobile and social games, console and game makers are investing in luring the hard-core gamers. Microsoft is offering more shoot-em-up games with its Kinect motion-control system. And even Nintendo, known for its more casual fare, is introducing more hard-core games from Electronic Arts and Activision to go with its new Wii-U system.

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

Wedbush's Pachter says the shift back to the core gamer is natural and inevitable. He attributes the expansion of gaming beyond the core gamer to Nintendo's introduction of the Wii, which drew in a whole new audience across platform consoles, to franchises like Guitar Hero and Rock Band. Now that the casual audience has the option of Casual Birds on their iPhones, the game industry is just left with those original core fans.

Social is Everywhere

Making games social is no longer an option, it's standard, and considered key to engaging a gaming audience. Whether it's Activision's "Call of Duty Elite" enabling more social interaction or Electronic Arts bringing "The Sims" to Facebook, game makers know that the more socially engaged players are, the more they'll want to play. Electronic Arts announced it's enabling Fifa Soccer players to play against their friends across platforms - seamlessly moving from Facebook to the console.

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