The press conference kicked off with a bang, as the light dimmed and we were immediately treated to a stunning new trailer for Epic's Gears of War. After the video ended, the lights came up and we were greeted by Cliffy B, Epic's resident wunderkind and the man behind Gears. Cliff explained that we'd be seeing a live demo of the game's first level, in which hero Marcus Fenix is broken out of prison by his buddy to combat the alien scourge. The demo was loud, violent, and gory, just the way we like it. There were actually quite a few sequences that made the whole crowd gasp, such as when Marcus used the saw blade on the end of his weapon to eviscerate an enemy. If this game wasn't already on everyone's "must-have" list, it certainly is now.

Once it was clear that Microsoft had gotten our attention (and there was no doubt that many people in attendance were completely transfixed by the screens), Peter Moore strode onto the stage to begin his now-yearly presentation. He kicked off his speech by talking about the upcoming "second generation of next-generation games," as well as the fact that Microsoft recently put their Xbox, Windows, and Casual games divisions under the same umbrella. According to Moore, this was testament to Microsoft's vision of the future of entertainment, one which is driven primarily by gaming. He also acknowledged the "bumps" that the 360 hit on the road to reach consumers, but did mention that there will be 5 million consoles in circulation by the end of next month, a growth rate faster than either PlayStation system or Apple's ubiquitous iPod. The system also sports an impressive attach rate, with consumers buying an average of 4.5 games and 3 accessories with each console.
There's no denying that Microsoft is placing a great deal of emphasis on Xbox Live, and Moore went into detail about what gamers can expect in the future. The service will have six million registered users by next year, and they're beginning to see it touch players that fall outside of the "hardcore gamer" category. One of the biggest ways to keep this momentum is to increase the number of titles available on the hugely popular Xbox Live Arcade service. We were treated to a video showcasing some of the upcoming titles, which ranged from Konami's Contra to Namco's Frogger to Capcom's Street Fighter II. Moore also likened Xbox Live Arcade to the Sundance Film Festival, as it allows independent developers to create games and instantly share them with millions of gamers around the world.