Time to Buy an Xbox 360 + Kinect?

This week is E3, which stands for "Electronic Entertainment Expo" or aka the annual gaming convention. Companies worldwide flock together to demonstrates their upcoming hardware, software, and games. It's a pretty exciting time for any gadget enthusiasts, especially if you are also a gamer. To sweeten the deal, Apple likes to schedule its annual WDDC (Worldwide Developers Conference) in the same week. Definitely much more exciting stuff than the recent (failure) of a Computex 2011.

To start things off, Microsoft went ahead and demonstrated upcoming changes to its Kinect motion-sensing controller. And boy did they hit a home run. Aside from a host of new exclusive games such as Gears of War 3, Mass Effect 3, Star Wars (doesn't everyone dream of dueling like a Jedi?), Microsoft also dramatically expanded its games offerings to the other audiences. The latter includes Sesame Street: Once Upon a Time and a Fun Labs that allows innovative uses of Kinect equipment, as well as the usual sports titles (Kinect Sports Season Two). I am personally thrilled to see the multiplayer capability of Dance Central 2, which before could only track the moments of only one player at a time. Now it can do at least two. It's time to learn some contemporary dance moves!

[It would be redundant to breakdown all the new offerings by Microsoft. You can check the Engadget articles here and here if you'd like. They have good photographs too!]

What I will do is provide a brief analysis of what these announcements mean to Microsoft. Obviously Microsoft is riding a wave of positive image right now -- Sony Playstation's reputation is smashed after its shutdown of its Playstation Network. I might even go out and purchase an Xbox (with Kinect of course) to take advantage of these new changes. Let's return to using our trusty bulleted formatting system to present some thoughts:

• Nintendo better reveal a solid successor plan to its Wii system, lest they want Xbox to also dominate them in sales. The Wii's novelty has worn off, especially now that with Kinect one no longer needs any controller. More alarmingly, Microsoft is bent on targeting a rounder demographic -- which has always been Nintendo's stronghold. Let's hope Nintendo's rumored "Wii HD" is competitive.
• Cable television providers also better watch out. As this initial revelation suggests, Microsoft is looking to expand its lineup of television offerings through the Xbox. I have friends who have already ditched cable television subscriptions for plans offered by Netflix and Hulu. Heck, even Netflix should be cautious as this new ability of the Kinect may pose a challenge to its business model.
• The emphasis on Kinect in this year's Microsoft E3 presentation hints that the next iteration of the Xbox will not be released for another 2 or 3 years at least. Microsoft is simply betting (with its development wallet) too much on Kinect to just forsake it after a year. Anyone holding out for the next iteration should just go ahead and buy the current one.

What does this mean to Microsoft's stocks? I'd recommend holding on as blogged about earlier. The pessimism is too heavy on the stock market right now. However, it doesn't mean you can't wait out the summer by buying yourself an Xbox 360 + Kinect (as I very well might).