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At this year’s Microsoft keynote, the focus was on establishing cred. John Schappert, Corporate Vice President of Microsoft’s game and Live group (Peter Moore’s replacement) spent most of his stage time reminding us he’d come from Tiburon, then EA Tiburon, where he’d developed Desert Strike and kick-started the venerable Madden franchise. One wonders if this note of insecurity was reflective of Microsoft’s mood or his. Or both.

“As the new guy there’s an expectation I’ll come out with a new tattoo,” said Schappert, referring to Peter Moore’s habit of showing off his guns on stage at Microsoft keynotes. “Sadly, I have no tats.”

Schappert got his start as a “hobbyist programmer,” hanging out in the computer lab, playing with Apple IIs and such. He said his proudest achievement was releasing Madden ’94, an achievement, he says jokingly, he relived “many times over.”

Tying into the major theme from this year’s DICE, Schappert said “For all of the hardware innovations, it’s the developers who are the true pioneers in this industry … the industry has continued to grow, thanks to you, the content creator, game developer. You guys drive this industry.” The applause was surprisingly forced. It was almost as if he hadn’t planned for any.

“What you might not know,” Schappert added, touching on the game industry’s $18 billion milestone in 2007, “according to Jupiter Research, the games industry is bigger than the music industry on a global basis.” Naturally, his thoughts then turned to Microsoft. “By every measure, 2007 was a blowout year [for Microsoft].”

Such a great year, according to Schappert, they struggled to keep 360s in stock. “More Xbox 360s are on the way,” he said, and that was the last anyone had to say on the subject.

“You, the developer,” Schappert said, “are developing first for the Xbox 360 … because you can do more on our platform.” He pointed to achievements, and Microsoft’s past excitement about having unlocked over a million achievements. “This morning,” he said, “I’m happy to announce the 360 community has unlocked over 1 billion achievements.”

And if that wasn’t enough of an indicator of Xbox Live’s success, Schappert pointed to Halo 3, and the innovative feature allowing users to upload gameplay movies to Xbox Live. According to Schappert, the Halo 3 community is uploading 100,000 pieces of content every day. “Every day,” he said, “the Halo community is uploading 30% more content than all of the daily uploads on YouTube. … A busy little community.”

Microsoft seemed intent on selling the 360 to the assembled crowd. From testimonials to usage statistics. The entire scene reminded me of sitting in the driver’s seat of the dealer’s second or third most selling car. They want you to want it. And if you ask to test drive the Ferrari, they’re going to tell you why the Camry is better.

This year, again, Microsoft’s focus was less on games and more on the console. In fact, Schappert’s opening remarks reminded us of the great selling games from last year. As if we’d already forgotten. Perhaps we had. But what we really want to know about is the games for next year. Or this year, even. We got a look at a few, but, naturally, the news came late in the program, and told us less than we wanted to hear.

James Silva's 'Dishwasher' recently won the XNA game design competition. A demo is currently available for download on Xbox Live.

James Silva's 'Dishwasher' recently won the XNA game design competition. A demo is currently available for download on Xbox Live.

Microsoft’s big news was XNA, the development platform introduced in 2004 which allows cross-platform development between Windows PCs and the Xbox 360.

“I can’t help but be nostalgic for the days when all you needed [to make a game] was your father’s computer and a modem.” Schappert says he intends to take Microsoft back to those days. The phrase “democratization” was a bit overused, but perhaps appropriate.

Schappert introduced Christopher Satchell, Chief XNA Architect, who tapped the democratization keg again. “Eighteen months ago we revolutionized the industry by democratizing game development,” he said, referring to the unleashing of XNA for Xbox 360. Since then they’ve had over 800,000 downloads of the toolset.

He went on to describe how XNA can allow anyone, from anywhere, to design a game. The silence in the room said more than Satchell could have in twenty more minutes. It was as if every single developer was thinking “if anyone can make games … what am I going to do?”

Hollywood knows how you feel. The good news is that in any user-created environment, very little – less than 10% – of what’s produced will be of any real quality. But that 10% could be created by the guy you count on down the hall, which could ultimately revolutionize not only the way games are created, but the way game companies are organized.

To prove his point, Satchell introduced the winner of the recent XNA game design competition, James Silva, whose game Dishwasher is available now on Xbox Live as a demo.

“I was at the point where I thought it was time to grow up,” says Silva, whose inspiration for the game, featuring a samurai dishwasher who battles cyborgs, came from his own days washing dishes at a local eatery. “But thanks to XNA, I can put that off for about five years now.”

Starting later this year, XNA community-developed games will be available directly over Xbox Live, making it possible for independent developers to make a game and get it to almost anyone, practically instantly. It goes without saying this could revolutionize the way games are made. The phrase “YouTube for videogames” has never been more apt.

The system uses creator profiles, similar to gamer profiles. The creators upload the game and develop a reputation based on what they’ve created and uploaded. The service will adopt Wikipedia-style community policing, putting the contributors themselves in the driver’s seat. After a game is uploaded to the community, the community members review it. When the game reaches critical mass of peer reviews, it’s released to Xbox Live.

It’s an interesting system, allowing the creators themselves to ultimately judge what gets released and what doesn’t. As Utopian ideals go, I’ve heard worse.

Free demos of the games featured in the keynote are available now on Xbox Live.

But just as with any good Billy Mays demonstration, Satchell gave us a good “But wait, there’s more.” You can also develop XNA games for the Zune. Still waiting for that iPod gaming device? Microsoft isn’t. This could be the push that puts the Zune back on the map. He showed a simple shooter game on Windows, Xbox 360 and Zune. It was impressive. One envisions a future when games are downloadable and programmed for multiple platforms, something Microsoft has been preaching about for years.

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And then it was Epic’s turn. Dr. Mike Capps, President of Epic Games, came on to say a few words, followed by CEO Tim Sweeny, who showed off some of the features of the new Unreal Engine, all of which look great, but really, it’s a subtle thing. As with all development tools, the tool itself matters much less than what it’s used to design.

For starters, a lot of things that were notably absent from Unreal 3-based games, like the original Gears of War (reactive water effects, destructible environments) are in, and, presumably, to be premiered for Gears 2. They also showed an impressive “soft body” system, responding to attacks and impacts like real soft tissue. Sweeny demonstrated soft body physics by shooting and hitting with a “cube of meat.” Never before has violence been so satisfying.

But the big news from Epic is that Microsoft is not buying Epic Games. Sorry. There also isn’t much to tell about Gears of War 2, aside from a release date: Holiday 2008, which Cliffy B, chainsaw gun in hand, came on stage to announce in one of the most ridiculous intros I’ve ever witnessed at a convention.

Then it was time for another game demo, this one from Team Ninja’s Tomonobu Itagaki, premiering a preview of Ninja Gaiden 2, sequel to the hardest game ever made.

“People have been telling the Japanese gaming industry has been losing a lot of its vitality,” he said, then attempted to prove that theory wrong.

The game itself look pretty, and fans of the series will be more than appeased. But the most amazing feature was the ability to record gameplay footage. Players can record their games and upload them, sharing tips, tricks and just plain awesome crazy moves with the rest of the world. YouTube of videogames strikes again.

Ninja Gaiden 2 ships in June 2008.

Cue Peter Molyneaux and Fable 2.

“Money,” said Molyneaux, “we all love it, we all like it.” In Fable 2, you get money for doing quests, doing jobs and for gambling. He demonstrated a pub game, which will be released on Xbox Live weeks before the actual game ships. You play the game, win money and transfer that money into your Fable 2 world.

“This is a dream of mine,” he said. “Games talking to each other.”

Then he demonstrated a bit of gameplay, starting out as a female character, making Fable 2 one of the few games to get that bit of crowd pleasing right. “Let me point out that I am a woman,” he said. “That’s not a confession, I’m playing as a woman.”

In Fable 2 you can get married and have children, which means you can also get pregnant. “There is no labor mini-game,” he said, “but I was tempted.”

Then they showed off the dynamic co-op play. You can invite anyone from anywhere into your game. They log in as their character, helping you in your quest, but saving their own experience points, which they can then take back with them to their own game.

Molyneaux invited a friend into his game, and then, together, they visited his in-game family, his son and husband, who both seemed miffed he’d been gone so long. And then … his guest shot his husband. It was one of those rare moments when the audience at a game convention, people who pride themselves on having seen everything and refusing to be moved by it, were almost moved. Like the death scene in Call of Duty 4, you just don’t do that to game characters. But Molyneaux did.

The idea is that anyone, at any time, can alter your home world irrevocably. “Just be careful who you invite into your world,” Molyneaux said.

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