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Microsoft, Sony, Nintendo Need Big Season

Motion controllers and mega-budget games may be what separate the Wii, Xbox and PS3 this season
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NEW YORK (TheStreet) -- Fall's shaping up to be a great season for gamers, but the stakes of their games are rising for Microsoft (MSFT) - Get Free Report, Sonyundefined and Nintendo.

Heading into the holiday season, the three video game console makers will be on even ground with motion controllers and rely heavily on strong stables of new games to weather the increased competition. Before last week's release of the eagerly awaited

Halo: Reach

for the Xbox 360 and Playstation Move motion controller for the Playstation 3, the video game industry had five straight months of declining sales.

Year to date, game sales are down 8% and console sales have slumped 12%, according to figures from NPD Group. Even with the holiday season approaching, delays of major titles for each platform have dampened hopes for a dramatic recovery. Nintendo's

Legend of Zelda: Skyward Sword

, once pegged as its big holiday game of the year, has been pushed to next year. Microsoft's

Gears of War 3

also won't arrive until next year, along with Sony's

Killzone 3

or

Electronic Arts'

undefined

Dead Space 2

.

It's not all bad news, as

Activision

(ATVI) - Get Free Report

still plans to release

Call of Duty: Black Ops

for all three platforms in November after setting industry sales records with

Call of Duty: Modern Warfare 2

earlier this year. And

Viacom

(VIA) - Get Free Report

subsidiary Harmonix still has

Rock Band 3

ready for all consoles in October. Console makers looking for an advantage this holiday season, however, will need some strong homegrown product to make that happen. Here are the biggest power-ups each system has to offer:

MICROSOFT

It's been a very good year for the Xbox 360, with Microsoft wresting the console sales lead from the Wii for the past two months and this month's

Halo: Reach

release selling 3 million copies in two days. The folks in Redmond can thank the slimmer version of the console released in June for much of that success. Fraught with technical problems for much of its five-year existence -- including the dreaded "red ring of death" that signaled the demise of one's Xbox and the need for either lengthy repairs or another $300 investment -- the newer and cheaper (with a base model now $199) Xbox 360 offers buyers security that can't be understated.

"Microsoft has finally released a console that people feel safe buying," says Shane Satterfield, editor of GameTrailers.com. "I think a lot of people waited until they sorted out their hardware issues and are finally jumping in."

The continuation of Microsoft's popular Fable series with the release of

Fable III

on Oct. 26 should continue its winning streak, but the industry and gamers are focused on the release of its Kinect motion control device Nov. 4. A camera, depth sensor and microphone combo that detects a user's movements and voice commands, the Kinect costs $150 on its own or can be bought in a $300 to $400 bundle with the Xbox 360 Slim. Though only expo attendees and demo gamers have had a chance to use the device with games such as

Kinect Adventures

, the Harmonix-produced

Dance Central

and Electronic Arts'

EA Active

, response has been overwhelmingly positive. That's good news for Microsoft, which is hoping to shore up peripheral sales that dropped 6% last month and draw casual gamers who tend to prefer PC or Nintendo Wii games.

SONY

Sony jumped into the motion-controller game last week when it released the Playstation Move device, but the games were criticized as having all of the familiar elements of Nintendo's Wii Sports and Wii Sports Resort with none of the fun. The technology behind the device is strong, as were demos of it that featured

EA's Tiger Woods 2011

and Sony's own

Sorcery

, a Harry Potter knockoff, but initial offerings and buzz are somewhat weak.

Such is the story of the Playstation 3: Lots of potential, very little excitement. Since its price dropped to $299 last year, the PS3 has had 13 straight months of sales gains. Unfortunately, according to NPD figures from that span, its console sales throughout most of those 13 months have been dead last behind the Wii and Xbox 360. For Sony, figuring out how to steal casual gamers away from the Wii while getting the PS3 fanbase to pay $100 for the Move's starter bundle, $50 for an extra controller and $60 for a pair of nunchaku controllers is among the least of its challenges.

"The other issue Sony has now is that they don't have the install base they once had," Satterfield says. "For the last two generations, they completely dominated Nintendo and the first Xbox and had the casual audience -- that's not the case anymore."

Sony's salvation may rest with its old-school franchises. Its

LittleBigPlanet 2

, slated for a Nov. 16 release, promises gamers the ability to build minigames in minutes while working through 50 new levels of Rube Goldberg contraptions. The beast of Sony's fall lineup, however, is

Gran Turismo 5

-- the latest installment in its cornerstone driving franchise that not only cost a reported $60 million to develop, but could sway Sony's fortunes for the year.

"What that game does really well is get everybody's car in the game," Satterfield says. "Don't ask me why people are interested in getting into a Datsun B210 and putting around a track at 40 mph, but the first thing that people ask when they get that game: 'Is my car in it.'"

NINTENDO

Nintendo's Wii is coming off of one of the worst sales months in its history. The company's biggest titles of the year --

Super Mario Galaxy 2

and

Metroid: Other M

-- were already released. Its 3DS portable device isn't slated to arrive until next year.

If you think Mario's worried, you haven't been paying attention. Nearly four years into its shelf life, the Wii is still putting up big sales numbers and confounding critics. It's not an HD device, its motion controls are wonky, it has little third-party support, it doesn't have many challenging games, its game catalog is filled with fluffy casual fare ... blah, blah, blah. As fall approaches, Nintendo is confident its entire catalog of releases -- and not just its fall slate -- will be what separates it from the pack come holiday season.

"

New Super Mario Brothers

, which was released last holiday, was in the NPD report's Top 10 game sales just last month," Satterfield says. "Their games have legs."

As always, Nintendo plans to lean heavily on its past this fall by reviving fan favorite Kirby for a textile-based tale called

Kirby's Epic Yarn

. The game releases Oct. 17 and has already won high praise, taking home "Game of Show" honors at this year's E3 video game conference. Meanwhile, Nintendo is rebooting its

Goldeneye

, the first-person shooter that kept college gamers confined to their dorms 13 years ago -- releasing a new version Nov. 2 and putting Daniel Craig's James Bond image in place of Pierce Brosnan's.

Donkey Kong and side-scrolling games make a comeback when

Donkey Kong Country Returns

releases Nov. 21, but the biggest throwback potential may belong to Mickey Mouse. Disney's cartoon icon returns to his mischievous roots in

Epic Mickey

, which allows gamers to add or erase characters and elements as he sees fit as he makes his way through a Disneyland filled with Magic Kingdom castoffs. This slate seems a bit fluffy, but they're exactly the kind of games that gave the Wii its initial success.

"The casual folks are the ones that bought the Wii, and the casual folks don't buy more than one console, if they buy a console at all," Satterfield says. "Nintendo convinced a lot of people who never thought about buying a console this generation to buy one."

--Written by Jason Notte in Boston.

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Jason Notte is a reporter for TheStreet.com. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.