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Microsoft at E3: Kinect Unveiled

The annual Electronic Entertainment Expo, or E3, kicks off in Los Angeles Monday with Microsoft executives first in line to give a keynote speech.

(Story on Microsoft's presentation at the E3 video-game conference updated with more details on Kinect).NEW YORK (TheStreet) -- The annual Electronic Entertainment Expo video-game trade show, or E3, kicked off in Los Angeles Monday with Microsoft (MSFT) - Get Report first in line to give a keynote speech.

Microsoft introduced a slew of new offerings, including "Call of Duty," a game based on the Cold War, "Metal Gear," and "Gears of War 3, " an Xbox 360 exclusive.


staff reporters Rob Holmes and Jason Notte,

live-blogging the event

, say a demo of "Gears of War 3" induced a "huge ovation" from the audience.

The reporters also noted that Microsoft's so-called "Project Natal" motion control device has been renamed Kinect.

Footage of another Xbox 360 exclusive, "Fable 3," was also being shown, as was "Halo: Reach," the latest game in that lucrative franchise.

"'Halo 3' was one of the biggest launches ever," Holmes noted on the live blog. The "Reach" version "may not have that type of hysteria, but it'll do well. Already looks as pretty or prettier than Halo 3."

"You're going to love Reach. It looks like the real deal," Notte wrote.

Notte noticed that, with the device, gamers can evidently sign in by waving their hands. Kinect will support a host of applications, including Zune, Netflix, Facebook and LastFM; it also has voice activation.

"Movie without remote, game without controller, smarter living room... ambitious plans for a controller," Notte mused.

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Video-game stocks were mixed heading into the start of the E3 convention on Monday. As Holmes noted,



"is getting killed," due to slashed profit guidance.

Activision Blizzard

(ATVI) - Get Report


Electronic Arts


were, by contrast, holding up.

Rock Band 3

"Over the last 12 months, it hasn't really paid to be invested in video games," Holmes wrote.

Electronic Arts


stock, for example, has declined 25% from a year ago, while

Activision Blizzard

(ATVI) - Get Report

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has fallen 14%, and






ADR have gained 4% over the last year, and


(SNE) - Get Report


"The biggest surprise," Holmes wrote, has been

Take-Two Interactive Software

(TTWO) - Get Report

, whose stock has gained nearly 28% over the last year.

Also Monday, Microsoft demonstrated Video Kinect, a video chat program that doesn't require a headset. The camera that comes with the system tracks users as they move around the room. "Remember that video chat feature


(AAPL) - Get Report

showed off last week on the iPhone 4?" Notte asked, rhetorically. "Guess what Microsoft is demonstrating."

The company hasn't announced prices for Kinect yet, but Notte said he's heard that the price could range between $50 to $200.

Microsoft is slated to release Kinect on Nov. 4, while the new Xbox slim model with Wi-Fi should be available this week.

Holmes wrote that very little of what Microsoft presented Monday is really actionable for investors. "Kinect is cool, but until we know a price ... it's hard to say what the value is." The reporters noted hat Microsoft stock didn't react much to the presentation.

"Microsoft has a unique challenge," Holmes wrote. On the one hand, the company's gear must "please the hardcore gamers." But it also must lure the same casual gamers who "helped Nintendo sell so many Wii consoles."

-- Written by Andrea Tse in New York


>>E3 2010 Video Game Conference

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