E3 splash for area game studios

Lights may flicker on the West Coast this week as hundreds of video-game companies — including a massive contingent from the Seattle area — show their latest stuff at the reborn Electronic Entertainment Expo in Los Angeles.

Headliners include Microsoft's Xbox group, which starts the marketing extravaganza with a media event this morning, followed by Sony and Nintendo on Tuesday.

Seattle game studios are also expected to have a big presence, announcing major new games for the consoles and PCs.

The show is intended to build anticipation for games and hardware going on sale in the second half of the year.

But it's coming as the economic crisis appears to be catching up to the games industry, finally slowing its double-digit growth of recent years.

Video-game sales fell 17 percent in April and hardware sales dropped 8 percent, compared with the same period last year, according to the NPD Group.

Yet U.S. consumers still spent about $10 billion on video games and hardware in the first four months of 2009, and NPD surveys suggest they're not likely to cut game spending in the coming months.

Game companies new and old are also pushing forward.

"We see lots of opportunities," said Matthew Scott, co-founder of Loose Cannon Studios, a 32-person Kirkland game company making its debut at the show.

Loose Cannon, whose founders previously worked at Sucker Punch Studios in Bellevue and Universal Pictures, spent four years quietly building its first game and securing a distribution deal with Japanese game giant Konami.

They've chosen E3 to unveil "Zephyr: Rise of the Elementals," a wild, nature-themed game that looks like something pulled straight off the Cartoon Network.

You play as a typhoon — or "wind warrior," as co-founder Ricci Rukavina put it — swirling around to save the world.

The family-friendly game is coming to the Xbox 360, Wii and PlayStation 3 in the fall.

Here are some of the other announcements rumored, expected and likely to happen at E3:

Xbox: Microsoft was hush-hush about the Xbox announcements it plans to make this morning, although there have been reports that it's going to announce a 3-D camera device that can sense players' movements.

This would give the Xbox 360 similar capabilities to the Wii's motion-sensitive controllers, according to a May 13 report in The Wall Street Journal.

The story said the accessory may be released at E3 but won't go on sale until 2010.

It sounds like Xbox may be drawing on some technology from Microsoft's tabletop Surface computers, which use cameras to detect users' motions.

Microsoft is also likely to talk up the Xbox's capabilities as a video-entertainment device.

The company last week disclosed plans to overhaul the Xbox video-rental service using Zune software.

Even more intriguing was a deal reached last week with Britain's Sky TV to allow the Xbox to receive live-broadcast TV.

Nintendo's Wii: Nintendo is expected to announce a major new Wii title coming later this year. It's going to be a "key property," GameStop CEO Dan DeMatteo told CNBC in April.

The granddaddy gaming company is also likely to use E3 to play up the imminent release of MotionPlus, a $20 gadget that plugs into the Wiimote controller to increase its precision.

Next week, Electronic Arts is releasing the first MotionPlus game, "Tiger Woods PGA Tour 10," and Nintendo is releasing a MotionPlus bundle with the new "Sports Resort" game in the U.S. in July.

My guess is MotionPlus will also lead to more action and shooting games to increase the Wii's appeal to hard-core gamers.

Sony: If persistent rumors prove correct, the biggest headline of the show may be a Sony announcement of a slick new PlayStation Portable (PSP) handheld. The prediction is for a PSP with a sliding screen.

Handhelds are the brightest spot in the business right now, but Sony's current PSP is a laggard compared with Nintendo's DS platform. In April the DS accounted for 31 percent of game hardware sales — 1 million units sold versus the PSP's 116,000 units, according to NPD.

Sony is also expected to lower the price of its PlayStation 3 console — its $400 price tag has kept it in third place behind the Wii and Xbox 360.

GameStop's DeMatteo also provided some fodder for speculation of price cuts by Sony and others. During his company's May 21 earnings report, he said console makers have to cut prices to meet their sales forecasts.

Prices aside, sales of the PS3 could pick up now that it's finally getting a broader lineup of games, including a batch from Seattle-area studios.

Among the PS3 games being highlighted by Sony at the show will be "MAG," an online multiplayer military shooting game developed by Redmond's Zipper Interactive, and superhero action game "inFamous," which was recently released by Bellevue's Sucker Punch.

Sony Online Entertainment will also call out "The Agency," an online multiplayer spy game coming in 2010 from Sony's Bellevue studio.

Music: E3 will see the debut of several variations on the hit music-rhythm games "Guitar Hero" and "Rock Band."

MTV has already announced "The Beatles: Rock Band," which goes on sale Sept. 9 for the Wii, PS3 and Xbox. But it's likely to make a splash at E3 by providing the first look at the game.

Expanding the genre even further will be "Def Jam Rapstar," a hip-hop music game that will be unveiled at E3. The game is being developed by Def Jam Enterprises and 4mm Games, a new studio created by co-founders of Rockstar Games. It's scheduled to be released on multiple platforms in late 2009 or early 2010.

Locals: In addition to Loose Cannon and the Sony affiliates, the following studios are expected to make announcements at E3:

Redmond's Airtight Games may finally disclose the shipping date of "Dark Void," its upcoming vertical combat game. Publisher Capcom hasn't disclosed the schedule, but sites such as Costco.com are taking orders for delivery Sept. 30.

Bellevue's Valve Software is planning a big announcement today, but details weren't available last week.

Electronic Arts is also highlighting "Need for Speed: Shift," the next version of its driving franchise developed at its Vancouver, B.C., studios. It's coming in the fall to the Xbox, PS3 and PSP.

Seattle-based Runic Games will launch "Torchlight," an online action role-playing game, at the show.

"Torchlight" will be released as a single-player game, with plans for a multiplayer version to be released later.

It's published by China-based Perfect World, which offers free online games but charges for upgrades such as improved clothing and gear.

Brier Dudley's column appears Mondays. Reach him at 206-515-5687 or bdudley@seattletimes.com.