E3 Notebook: Xbox 360

Staff Reporter Troy Wolverton is in Los Angeles to attend the Electronic Entertainment Exposition -- better known as E3 -- which is the video-game industry's giant annual gathering. He's filing occasional dispatches on news, rumors, sights and thoughts from the show.

Thursday

My last day at E3 began with a meeting with J. Allard, a vice president at Microsoft (MSFT Quote - Cramer on MSFT - Stock Picks), who heads up Xbox development. A more extensive question-and-answer article with Allard will run in the coming weeks. Meanwhile, here are some excerpts:

Allard and Microsoft believe that timing will be a key factor in the Xbox 360's success. Microsoft didn't release the Xbox until 19 months after Sony(SNE Quote - Cramer on SNE - Stock Picks) put out the PlayStation 2, he noted. And even then, the device was a kind of rush job, Allard suggested. The Xbox team hadn't yet jelled by the time the device launched, the company didn't have a big relationship with industry titan Electronic Arts (ERTS Quote - Cramer on ERTS - Stock Picks) at the time, and the company was essentially forced to go with off-the-shelf hardware, Allard said. All that combined to give Sony an insurmountable lead.

But this time, Microsoft has had years to develop its console and design it with custom parts, and it will have the first next-generation hardware on store shelves, Allard said. Along with relationships forged with most key game publishers, those factors will help Xbox 360 fare better in the marketplace, he said.

At Microsoft's press event on Monday, Allard boldly stated that 1 billion people would play Xbox 360 games in the coming years. Considering that Microsoft has sold fewer than 30 million units of its original Xbox, the comment raised more than a few eyebrows. In our interview, Allard backpedaled a bit from the prediction, saying it was more of a "challenge to the industry" than a specific company target.

Like a latter-day Paul Masson, Microsoft will sell no version of Halo before its time, Allard said. Microsoft-owned Bungie Studios, which developed the uberpopular, first-person shooter game, is cooking up "some interesting stuff," Allard said. But a new Halo has not been mentioned as one of the 25 to 40 Xbox 360 titles that Microsoft expects to have available at or near the launch of the console.

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I was able to take a look at some of the games in development for the 360. Microsoft, for instance, showed off a video that featured a number of upcoming games that highlighted some of the Xbox 360's features. Among the game clips aired were Quake 4, developed by Id and published by Activision (ATVI Quote - Cramer on ATVI - Stock Picks), and Dead or Alive 4 from Tecmo.

I also had in in-depth look at Gears of War, which will be an Xbox 360-only title developed by Epic Games. The game, a third-person shooter, uses Epic's Unreal Engine technology, which is behind such titles as the Tom Clancy's Splinter Cell series from Ubisoft.

Gears of War doesn't appear to break much new ground in terms of game play; you follow a series of missions that typically involves getting into firefights with denizens of evil. But the game did show off the high-definition resolution of the Xbox 360. And one cool feature: Players can interact with inanimate objects in the environment, shooting out windows or even using a bazooka-like weapon to blow through walls.

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One of the interesting things about the video-game industry is that having a game available "at launch" means different things to different people. Sometimes, companies truly mean that the games will be available on the same day that a particular console goes on sale.

Other times, companies use the more slippery "launch window." EA, for instance, is saying that many of its Xbox 360 games will be available within the device's "launch window," which their developers defined as within about six weeks after the Xbox 360's actual launch date.

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