The first of Micrsoft's surprise announcements was their avatar system which is essentially a more complicated Mii system to be used with the Xbox 360. Games like Scene-It 2 will incorporate these avatars similar to how Nintendo has incorporated Miis into many games.
This announcement came alongside the announcement of an updated interface. The interface will look something like cover flow from Apple's iTunes application and the more recent iterations of the iPod itself. Each blade, as they were formerly known, is now known as a channel with an emphasis on making the interface more accessible and more like a TV. This concept is nothing new for any gamer out there who has used a Wii before. Nintendo pioneered the concept on the the Wii, making the console a living room staple due to its simplicity and familiarity.
Microsoft also announced a title which will involve players making B-movies by doing motions in front of the Vision Camera. The motions are built into a mini-game, and the video captured is recycled in the generated movie event. The mini-games are very reminiscent of things done by Sony and their EyeToy years ago on the PS2.
Despite Microsoft's overall "borrowing" vibe, they did unveil a number of new concepts and games. Many of the upcoming 360 titles will feature seamless online co-op experiences built right into the single-player experience. Essentially players will be able to add and drop friends right in the main campaign at any point in time. Resident Evil 5, Fable 2, and Gears of War 2 all demonstrated the concept.
Portal will also be making reappearance on the 360 with Portal: Still Alive. Nothing was shown of the title, but it is currently exclusive to the system. Microsoft also briefly mentioned Viva Pinata: Trouble in Paradise, along with Banjo-Kazooie: Nuts and Bolts. On release of B-K, Microsoft will be making the original Banjo-Kazooie title available on Live Arcade. No other details were mentioned, and it is still not certain whether it is a remake or a re-release.
An update to Galaga from Namco-Bandai was also shown, in the vein of Space Invaders Extreme. Galaga Legions will receive an "extreme" upgrade, nearly turning the title into a bullet-hell shooter. It looked stunning and should prove to be a great new addition to Xbox Live Arcade.
iNiS also made an appearance, debuting their newest Karaoke game, Lips. This title will allow players to hook up their iPod or Zune directly to their 360 and sing along with any song in their library. Lips will create a set of notes to sing along with and score the player at the end. A seemingly obvious idea is now finally implemented. Whether or not the game will be successful is currently unknown, but it will be interesting to see the result.
Finally, Yoichi Wada, president of Square-Enix, made an appearance at the show to hype Infinite Undiscovery, The Last Remnant, and the latest Star Ocean title, Star Ocean: The Last Hope. Wada left the stage after his presentation, only to later interrupt Robbie Bach and announce Final Fantasy 13 for the Xbox 360. This means that the huge title is no longer exclusive to Sony. Though this has been rumored for ages, to finally see it happen is truly something else. This seemingly simple announcement could spell serious problems for Sony this generation. Though they have picked up steam with Metal Gear Solid 4, their gas may have run out due to this announcement.
Overall, Microsoft's conference was fairly predictable due to floating rumors over the past several months, but will surely have some impact on the market. Whether or not their avatars will catch on like Miis is also unknown, but I'm sure Nintendo knows they are on to something when they see Microsoft shifting their focus to the same crowd that Nintendo is so aptly catering to.
I also wanted to mention that it was a lot of fun chatting with everyone on our IRC channel during the conference. If you are able to, hop on tomorrow at 9AM PST for Nintendo's press conference.