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E3 Trends: iPad, Augmented Reality Loom Over Video Game Trade Show

As consoles focus less on gaming and more on becoming connected digital media centers, smart peripherals are taking center stage.

There’s a 900-pound gorilla stalking the halls and suites of E3: Apple’s iPad. I lost count of how many times tablets were mentioned, and while few game companies specifically mentioned the top-selling tablet, iOS’s hold on gamers is being felt in the mainstream game business.

Microsoft is trying to move out of the living room with SmartGlass, which provides two-way communication between the Xbox 360 and software running on Windows 8 tablets and other Windows 8 devices.

Nintendo’s Wii U Game Pad offers strong similarities to tablets, but the device is more tightly coupled to the Nintendo ecosystem, and doesn’t look like it works as a standalone device.

Sony announced more games integrating the PS Vita with PlayStation 3 games, but Vita’s integration seems even more loosely coupled than SmartGlass. Hedging its bets, Sony also talked up PlayStation Mobile, an attempt to bring PlayStation-style gaming to Android tablets. PlayStation Mobile could become a credible competitor to iOS, but Sony’s track record in taking on Apple has been spotty, lest anyone forget how Apple took over the portable music player business.

Despite all the companies’ best effort, none of the gaming devices addressed key benefits delivered by the iPad and iPhone: games cost less. Major game companies try to eke out more revenue streams beyond the $60 boxed title. Phrases like EA’s Riccitiello’s “games have evolved from the disc that you buy to the place that you go” are heard more often, and efforts like Battlefield 3 Premium strive to generate revenue beyond the ship date of a title.

It’s true that iOS games often ship downloadable content and add-ons that add to the cost. But paying $1.99 for an expansion to an iOS game is much more palatable to an increasing number of gamers than a fixed monthly or annual fee. How many users will continue to pay subscription fees for better camouflage gear for the next Modern Warfare clone is an open question.

Another trend is the increasing use of augmented reality. Whether it’s Nintendo’s Wii U Game Pad being used to enhance games played on the larger screen with direct interaction or titles like Sony’s Wonderbook, augmented reality is another gee-whiz factor that the big console companies and game publishers hope will retain or expand audience.

Perhaps the greatest opportunity lies with that older gaming device used by hundreds of millions of users: the PC. With the exception of Nintendo, the current console cycle is waning, and even modestly priced PCs can offer better performance and eye candy than console titles. As Blizzard has shown with Starcraft II and Diablo III, PC exclusive games can still move millions of copies.

In the end, this year’s E3 is already shaping up to look like a holding pattern for the major companies, Nintendo excluded. Most of the innovation and wow factor may end up lying with the smaller companies vying for attention. Change is in the air, and no one seems to know which way the winds will shift moving forward.

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