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E3 2001 Shows Little Net Presence

By Brian C. Bock
(May 28, 2001)

E3 was held at the Los Angeles Convention Center.
Every year the video game industry gathers at the Electronic Entertainment Expo, also called E3. This year it was held at the Los Angeles Convention Center.

Perhaps most notable isn't the news that Nintendo and Microsoft both announced US ship dates and prices for their next generation consoles. More interesting was how the three remaining video game consoles are being positioned in the market place and on-line. First there's Sony and its PlayStation2, the wildly popular console that is already available, but was in short supply last Christmas. Sony showed its desire to go broadband. They say they weren't announcing any actual products and that these were just technology demonstrations.

Sony and Real Networks showed a technology demonstration of streaming video.
First up was Real Networks demonstrating its broadband streaming technology. Sure the demonstration was at the unrealistic speed of a local network, but the demo guy assured us that it would look "almost as good" over a cable modem.

Next up for the Sony PlayStation2 was... wait for it... Linux. Weird, huh? But there it was running the latest version of Netscape Navigator for Linux on a VGA monitor. No it won't work well on your TV because the browser isn't designed to display on TV.

Linux on PlayStation2? Weird, huh?
You've Got Mail... and AOL on PS2, but not on TV... yet.
Even more of a shock was seeing America Online on the PS2. We were expecting the battle cry "You've Got Linux!" as it booted up with the favorite non-Microsoft operating system that nine out of ten geeks ask for by name. This dynamic duo were not, however, being displayed on a television, and it closely resembled the PC version of AOL being displayed on a VGA monitor connected to the PS2.

What Sony DIDN'T show was a web browser for television. When asked if AOL intended to bring AOLTV to the PlayStation console, the demo guy just smiled and said simply that it was being discussed.

A third demo stand at the PS2 broadband booth showed a hi-definition 1080i movie that had been recorded onto the hard drive of the PS2.

Game Boy Advance will connect to GameCube, allowing gamers to set up secret moves.
Over in the Nintendo booth, we heard a different, more defensive story. Nintendo told us "Yeah, we could do broadband too. There a port in the bottom of the unit that can hold a broadband adapter and modem. But we don't want to do that right now."

Another thing that Nintendo won't do is DVD. "We're a videogame machine. We look at DVDs as... the competition. Why would we want to let people watch movies?"

Uhhh... because PlayStation2, XBox and even the dearly departed Dreamcast can play DVD movies. But Nintendo fans don't have to feel totally let down. Tucked away in a display was a version of the Nintendo GameCube decked out in brushed metal and able to play DVDs. What gives? Well, Nintendo licenses the GameCube out to consumer electronics manufacturers, including Panasonic, which built this one.

Panasonic is getting in on Nintendo's Game with a DVD GameCube combo unit.
Nintendo also announced that their Nintendo GameCube will be available November 5, 2001 in the U.S. and will carry a price tag of $199.95, well below Sony and Microsoft. Nintendo will also release six exclusive titles at launch, priced at $49.95. Nintendo's replacement for the venerable Game Boy, dubbed Game Boy Advance will have an much more powerful processor, 50 percent larger (2.9 inch) high resolution LCD screen, 15-hour battery life, ergonomic styling, backward compatibility with Game Boy and Game Boy Color. It will be released in the US on June 11, at a price tag of $99.95, and will be available in violet, blue, and white. Pink will be available in July. In the future, the Game Boy advance will be able to connect to the Game Cube and will serve as a private controller for setting up secret moves.

E3 was held at the Los Angeles Convention Center.
And last in the console wars, but certainly not least, was Microsoft and the much anticipated Xbox. We talked with the demo guy as he put it through its paces. Gone was the showy X-shaped metallic enclosure we saw at last year's E3. Now it sported a decidedly more mass manufacturable enclosure that carried the X in the top of the case along with a glowing green jewel emblazoned with an X. the Xbox will be released November 8, 2001 and will cost $299.

Halo left us feeling flat. It wasn't really any better than a PC.
To be honest, we were a bit disappointed in the game demos we saw. First was Bungie's HALO. Think DOOM for 2001. Yes, the graphics are clean, although frankly, we thought they looked a bit flat, although it did feature impressive game physics, lighting effects, and world continuity that enables the environment to reflect damage sustained during the battles. But even more bothersome was the onscreen action was not as natural as we had expected; it was a bit jerky or at times too fluid. Characters were also able to roll over in a jeep with a guy in the back remaining standing the entire time. What?! So much for real-world physics. But this is a game. We asked the demo guy about the performance of the unit that was being shown and he indicated that it was only about 50 percent of the speed of what the final version will be. We were relieved. Hopefully, by the time November rolls around, everything will be ironed out.

One game we didn't see, but looks more impressive on Xbox is Oddworld: Munch's Oddysee. Cooooool!
Totally absent from Microsoft's booth was the Internet. "It's a game machine," we heard several times. Microsoft says that it is not interested in bringing the Internet to the XBox in terms of surfing and e-mail. We suspect that is just their launch strategy and that over time, they will revise it. But until then, expect single player games at launch with multi-player games over a network (Internet?) in the future. Microsoft has stressed that every XBox is designed to be Internet capable, but that any Internet capabilities will be in terms of playing games, such as playing someone on the other side of the world and hearing their voice over a headset while they taunt you.

So there we had the three consoles and three companies: Sony embracing the Internet with broadband technologies, web surfing, streaming audio and video, and America Online; Nintendo who says they could add the Internet if it wanted, but it doesn't want to; and Microsoft who says every unit is Internet capable, but that it just wants to be a great game machine.

While Nintendo and Microsoft bristled at the idea of multi-functional game boxes, another contender prepped its offering for the US market. Sure, it's not a game console per se, but it could become the heart of your livingroom. And this box comes from an unlikely source: Nokia. I say unlikely because in the US, Nokia is best known for tiny cellular phones. But in Europe, they are known for settop boxes as well.

The Linux-based Nokia Media Terminal will be available for satellite subscribers in the US, and features Internet and Digital Video Recording.
The Nokia Media Terminal seamlessly combines digital video broadcast (DVB), gaming, streaming and downloadable digital media, full Internet access, and personal video recorder (PVR) technology. Essentially the terminal is a PC, complete with a 366 MHz Celeron processor, a 20-40 GB Hard Disc, 32-64 MB of SDRAM, a modem, an MPEG2 coder and decoder, support for ISDN, xDSL, and cable modem, accelerated 3D graphics, Universal Serial Bus (USB) ports, FireWire (IEE 1394) ports, a PCMCIA slot found in most laptops, and smart card slots.

The Media Terminal runs the Linux operating system and is an open source development platform, enabling it to take advantage of a huge community of software developers. The device incorporates open source technologies such as, Linux, Xfree86 and Mozilla, and will incorporate a Linux-based version of RealPlayer 8 with anticipated roll out of early Fall in Europe and by early next year in the United States. No price or specific release date have been announced, but Nokia is aiming the device straight at the satellite TV market, and in particular, Echostar.

This hefty cell phone plays videogames on its high-resolution color LCD screen. Expect that to hit you hard in the pocket book. We couldn't find a pricetag anywhere.
Nokia also demonstrated videogames on cell phones, but not your average cell phones. The Nokia 9210 Communicator features a high-resolution color LCD screen and runs on the Symbian operating platform.

Useless Factoids:

  • Sixty percent of all Americans age six and older, or about 145 million people, play computer and video games.
  • The average age of a game player is 28 years old.
  • Forty-three percent of game players are women.
  • The vast majority of people who play do so with friends and family. (Almost 60% of frequent game players play with friends, 33% play with siblings, and about one-quarter play with their spouse and/or parents.)
  • Computer and video games generated $6.02 billion in sales in 2000 and will continue to show strong growth over the next few years.
  • In 2000, over 219 million computer and video games were sold, or almost two games for every household in America.
  • All games are rated by the Entertainment Software Rating Board (ESRB), and over 70% of games are rated "E" for Everyone.
  • Ninety percent of all games are purchased by adults over the age of 18.
  • Nineteen of the top twenty best selling games in 2000 were read "E" for everyone or "T" for teen.
  • In 2000, for the third consecutive year, 35 percent of all Americans identified computer and video games as the most fun entertainment activity. A distant second was watching television (18 percent), then surfing the Internet (15 percent), reading books (13 percent), and going out to the movies (11 percent).
Source: Interactive Digital Software Association

Who Cares About Video Games?

How significant is the overall demand for computer and video games in the U.S. economy? In 2000, its economic impacts, including direct and indirect economic effects, were:
  • Employment for 219,600 people
  • Wages of $7.2 billion
  • Federal and state personal income tax revenues of $1.7 billion
  • A $10.5 billion market for game software publishing, wholesaling, and retailing
Demand for computer and video games directly affected the information, trade, and transportation sectors. In the information sector alone, which is where game software is produced, the economic impacts, including direct effects of demand for game software and the indirect effects of all industry spending initiated by the game software publishing industry, were:

  • 124,500 jobs
  • $4.9 billion in wages
  • $1.2 billion in taxes
  • A $9.3 billion market for game software publishing, wholesaling, and retailing

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