Microsoft on Monday launched a new set of games and entertainment services to use its Kinect sensing motion device.

Japan’s Sony Corporation named ‘PlayStation Vita’ as its next portable video-game player with 5-inch touch screen at the E3 gaming conference on Monday. Also Nintendo said it has plans to come out with a sequel to the Wii game console.

Microsoft of Redmond, Washington, launched “Star Wars game for its Xbox 360 system which uses the Kinect sensing motion device that will allow gamers to move objects with their arms, the WSJ reported.

The three major companies are facing stiff competition from smaller novel forms of gaming, like the ones on Facebook, to the cheap games which are designed for smart phones and tablets.

Around 10 million games designed for Kinect have been sold since its release in November.

According to Don Mattrick, president of Microsoft's interactive entertainment business, the Kinect will make players feel the real deal.

EA (Electronic Arts) has announced the launch of four sports games with the likes of Tiger Woods golf, Madden football, FIFA soccer and another game with an unannounced title which will use Kinect.

EA will launch, Mass Effect 3, in March 2012, which will use the Kinect technology and allow players to converse, affecting the overall behavior of the game.

EA displayed at an event on Monday, 'The Sims Social' where the characters can dance and do many 'virtual' things.

Microsoft has also announced the launch of a new version of its Xbox Live online entertainment service that will provide members with access to video from Youtube and a variety of other television events. The company said it will add a search function to the service to help users to look for videos, music and games using the voice commands.

Sony's PlayStation Vita, with a price tag of $249 and $299 respectively for the models that can access wi-fi and the 3G network, was the biggest surprise at E3 with its lower prices despite having features like a touch screen and rear touch pads, analysts said.