This year's E3 Expo is about the future of videogames, as always. But it's also about delaying the future for as long as possible: Instead of rolling out new gaming machines, the big players are adding flashy new tech to systems already on shelves in an attempt to extend existing consoles' life cycles and attract new players.

E3, aka the Electronic Entertainment Expo, opens Tuesday in Los Angeles.

Microsoft's E3 focus will be Project Natal, a camera-based device that lets Xbox 360 players control the onscreen action using body movements. (Microsoft introduced Natal at last year's E3.) Sony will highlight PlayStation Move, its version of the Wii motion controller, and make a big move into 3-D stereoscopic gaming.

It's arguable that Natal and Move will differentiate Microsoft's and Sony's aging consoles more than a faster CPU and better graphics would, anyway.

"What would an Xbox 720 even look like? We're beginning to hit the point of diminishing returns," said Wedbush Morgan Securities analyst Michael Pachter. He says Sony and Microsoft will treat the launches of the new controllers as if they were entirely new machines.

The only company unveiling a new game platform at the show will likely be Nintendo, which will show off its 3-D-enabled portable machine, the Nintendo 3DS. Although the company's current DS hardware remains a smash success, the portable device is positively geriatric, dating back to 2004. Facing renewed competition from Apple's game-friendly iPhone and iPod Touch, Nintendo needs to do something radically different.

E3 is back at full size after a few downsized years, and ready to once again serve as a portal into videogaming's near future. The industry's grandest trade show, expected to draw over 40,000 attendees, will lure every major publisher to the Los Angeles Convention Center. There, they will show off high-profile titles they plan to release in the next 12 months, and even give some early looks at what the next few years will bring.

It's great timing, says Electronic Entertainment Design and Research analyst Jesse Divnich, because the struggling game industry needs a show of force.

"The industry has performed poorly over the last 16 months, and E3 2010 is a time to show (that) bigger, better and more entertaining games are right around the corner," Divnich said in an e-mail to Wired.com.

It's been nearly five years since the launch of the Xbox 360, which in the past would have put Microsoft on schedule to show off a new console with flashier graphics and more memory at this year's E3. But the Xbox 720 and PlayStation 4 remain a long way off, in part because of the complexity of current consoles and in part because Microsoft and Sony are playing catch-up to Nintendo's casual-gaming innovations.

Gamers and game developers alike have faced higher costs with this generation of consoles. It costs tens of millions of dollars to produce big-budget high-definition games for Xbox 360 or PlayStation 3. A low-end PlayStation 3 console still costs $300, keeping it out of reach for many consumers who came in at the tail end of the PlayStation 2's life cycle. Neither Sony nor Microsoft stand to gain by introducing more-expensive, more-complicated hardware too soon. Instead, they'll layer features onto their current consoles through the judicious addition of peripherals.

The PlayStation Move controller.

Image courtesy Sony

Move, a two-piece controller that tracks users' hand motions and where they are pointing at the screen, is quite similar to Nintendo's Wii controller. But Wii's graphics aren't anywhere near the level of PlayStation 3's. So Sony is attempting to create an all-in-one system that will cut Nintendo off at the knees, Pachter argues.

"Sony is positioning Move as an upgrade to the Wii," he said. "Sony is hoping that they pre-empt Nintendo from upgrading the Wii, so that everybody who would buy [an HD version of Wii] buys a PS3 [instead]."

Microsoft's Project Natal is significantly different from both Move and Wii, because it eschews the traditional game controller altogether, letting users control the action by moving their hands and bodies.

"Natal will likely broaden the target market for the Xbox 360," said Divnich. "The Xbox 360 is the console of choice among the core gamer, but with the addition of Natal, Microsoft will finally position itself as a true living-room entertainment hub."

Natal, says Pachter, is less about giving gamers a cool new way to play games and more about getting more people in the household to use the Xbox 360. "Microsoft's goal is to capitalize on a very large install base of console and get others to use it. If you can bring in all those other people, it's a win for Microsoft, because they can sell you more stuff."

There is a serious disconnect at Microsoft.Thanks to services like Hulu and Netflix, Microsoft's game console is already loaded with opportunities to sell users something every time they turn on the box. The more users who log in to the Xbox 360, the more chance Microsoft can increase its revenue. That, says Pachter, is the goal of Natal. "You could sell a lot more stuff if you can get those other people to use the box, and the way to get them to use the box is make the control scheme more user-friendly," he said.

There's just one potential catch: It might not happen. "I think there is a really serious disconnect at Microsoft between what they want to achieve with Natal and what their audience wants," Pachter said.

Although Natal is geared toward the non-gamer, it's the gamer who's going to make the purchasing decision, according to Pachter. "Capturing the imagination of the guy who controls the console is hard," he said. "They're not putting Gears of War on Natal."

In short, the Trojan horse only works if the Trojans like horses.

Assailed on all sides by its competition, Nintendo will continue to produce wholly new devices. On Wii, its Vitality Sensor attachment will take a user's pulse and measure his or her heart rate. To what end? We won't know until the company's E3 press conference, but signs point to a game that's about relaxation.

3-D Pushes From Nintendo and Sony ———————————

But Vitality Sensor isn't the big news; Nintendo 3DS is. The company's next-generation portable hardware will be fully playable on the E3 show floor, featuring 3-D graphics that don't require glasses.

Electronic Entertainment Design and Research's Divnich says 3DS could be a bigger deal than either Move or Natal. "Of the developers and publishers that have seen all of the new technologies in advance, they seem to be more excited about what the 3DS has to offer," he said. "Nintendo is known for its originality, and even when faced against an emerging competitor in Apple, Nintendo is sticking to its guns by creating a device that no competitor will replicate."

Nintendo will create a device that no competitor will replicate.Though Nintendo will deny it up and down, Apple has changed the handheld gaming market dramatically with the ubiquitous, accessible iPhone and its thriving App Store. Jake Kazdal, a game artist formerly of Sega and Electronic Arts, said in an e-mail to Wired.com that he's interested to hear how Nintendo will sell 3DS games through direct downloads.

"While I hear the 3DS is actually really impressive, what I'm more interested in is their distribution model," said Kazdal, now a founder of indie developer Haunted Temple Studios. "I for one know I buy a lot more DS games now that I can easily purchase cheap, small, snack-sized fun games from home and never worry about bringing the cartridge around with me," he said.

3-D will also be a hot watchword for Sony's E3 presentation. The company has just rolled out the first batch of PlayStation 3 games that display in stereoscopic 3-D on new television sets. The company will surely spend a good deal of its energy trying to convince gamers that 3-D's time has finally come.

Kazdal says he's excited. "I think people just don't yet comprehend how much depth it's going to add to playing 3-D games, being able to judge distances for jumping, driving and throwing things in 3-D. I'm saving up for the biggest 3-D TV Sony is going to make!"

He'll have to. Sony's 3-D Bravia televisions start at a budget-busting $2,000 and skyrocket from there. Divnich doesn't think 3-D is going to catch on as fast as Sony thinks it does.

"3-D won't be considered a serious revenue driver for the gaming industry until 2012," he said. "Consumers are not going to shell out $2,000 just to play 3-D games. Instead, consumers will naturally adopt 3-D-enabled televisions over time, as they replace their current sets."

At E3, we'll see a variety of new, flashy technology. It remains to be seen which of these will hit the sweet spot and get people to buy more videogames, and which are just ahead of their time.

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