At E3, Hopes That New Consoles Could Boost Sales

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But buzz does not always mean sales. In January, NPD Group reported 2009 sales of video games fell eight percent to $19.66 billion from $21.4 billion in 2008.

Whether 3-D gaming and the new motion sensor devices from Sony and Microsoft can duplicate the success of Nintendo's Wii will go a long way in determining the industry's fortunes.

Research firm Interpret recently revealed a survey on the potential popularity of 3-D video games. Conducted before Nintendo's announcement, the survey found 16 percent of gamers were aware of an impending 3-D gaming device. However, only 10 percent of men and five percent of women expressed "definite interest" in obtaining one.

On the plus side, 3-D consoles will be more affordable than the 3-D televisions that have been rolled out, said the study's author, and Interpret Vice President Michael Cai. The immersion of 3-D, he said, will appeal more to the hard-core game players. "It'll be more about enhancing game experience and creating sense of location around you when you are in a first person shooter," he said.

Nintendo's small handheld 3DS console will not require the usage of 3D glasses, which could boost its appeal to more casual customers. A lower price and the ability to play 3D movies make Frazier more optimistic about its chances.

For Sony and Microsoft, success for their motion sensor devices means repeating the widespread appeal of the Wii.

The Kinect is the most radical departure from traditional game controller mechanics, as it depends entirely on a high-tech camera, software and an infrared projector and sensor to track body movements.

Sony's Move is similar to the Wii controller. The company says it has better precision than either of its competitors.  

Despite the innovative technology, Cai said Microsoft's Xbox will have to fight it own reputation as a core-gamer machine. "Wii has an established social and family perception," he said. "You get gamers saying, it's my Xbox, I don't want to share it with family. With Kinect, that's the reason they called it Kinect, it's not only motion, but it's about connecting with others."

Both Cai and Frazier agree pricing will play a vital role in the potential success of the Kinect and Sony's Move.

The Move will be available separately for $50 or in a bundled package with a game for $100. Microsoft has yet to announce prices for Kinect.

"I believe Microsoft made a compelling case for the 360/Kinect unit's broader home entertainment functions, so we just have to wait and see how it plays out once launched. But again, no pricing has been announced for the Kinect and in this economy. That is a critical piece of the puzzle," Frazier said.

The Move will be out in September, the Kinect in November. Nintendo has given no details on 3DS' price or release date.