Engadget & Joystiq live from Microsoft's E3 2008 keynote

We're here! The line is already mad long, but we must admit, it feels great to have E3 back at the convention center.

9:47 am PT: Alright! We're waiting in line for the MS press conference! We're feigning excitement through gratuitous use of exclamation points!

9:49 am PT: An MS representative asks us if we have our "passports." We assume she means our press badges and isn't about to whisk us to another country. Mind you, we've always wanted to see the Swiss Alps. Oh, and the chocolate and... okay, we're getting sidetracked.

9:51 am PT: So, if you were trying to spot us in this line, we'd be the ones holding laptops in one hand and typing with the other. We keep bumping into the person in front when the line comes to a halt, what with our eyes glued to our screens. Also, person behind us. STOP READING OVER OUR SHOULDERS. ALSO, YOU SMELL BAD.

9:57 am PT: We've reached the front of the line! No, wait... it just loops back. Already this conference is a roller coaster of anticipation and disappointment.

10:03 am PT: We just saw Major Nelson shaking hands with QORE's Veronica Belmont. What lucky people, our attempts to touch either of them have failed miserably numerous times.

10:06 am PT: On our way through the door, we have our barcodes scanned. Then we have the barcodes on our badges scanned.

10:07 am PT: We enter a dark hall bathed in neon green light, and a sign beckons us to "jump in." Apparently, we're meant to jump into a pool of radioactive waste this time around. Everybody is green!

10:08 am PT: We enter a dark hall bathed in neon green light, and a sign beckons us to "jump in." Apparently, we're meant to jump into a pool of radioactive waste this time around. Everybody is green! We just saw a giant Joystiq Xbox 360 faceplate displayed on the central screen. What do we need to do to get one of those?

10:10 am PT: Nearby the entrance, a few cameras are aimed at some whiteboards, with attendees scribbling personalized messages to be transmitted to the central screen. "Wii sucks!" is the best some immature attendee could come up with.

10:12 am PT: We've taken our seats and are slowly drinking in the vibrant Ambience. Just to be sure, we order several more bottles of Ambience. We gotta loosen up a bit!

10:14 am PT: "Xbox 360 street talk" plays on the screen, a brief montage of people (on the street) talking up their Xbox 360 experiences.

10:15 am PT: The people are quizzed on gaming lingo -- "newb," "pwned" and "melee." That last one's a place in Asia, apparently. "RPG?" "Road performance System." Weep for America.

10:16 am PT: They're talking about sports games now. We're going to take a nap.

10:17 am PT: Alright, people playing Rock Band! We love them. We want to be them. A few women express their love for Harmonix's rhythm game, shortly before an Xbox 360 logo signals the end of the segment.

10:22 am PT: We've now entered the "consoles and controllers floating through white space" video segment of the conference. This is usually our favorite part.

10:29 am PT: The lights go up and things appear to be getting underway, with music blaring all around us. The masterful lyrics are somewhere along the lines of "Woah woah woah woah oh oh." We might have missed a "woah" in there.

10:32 am PT: Please welcome, Don Mattrick, senior vice president of the entertainment biz. He welcomes us to the home of "fun and entertainment for everyone" "Good morning everyone, it's my privilege to welcome all of you to E3. Welcome to Xbox 360 -- home to the biggest blockbusters... the biggest sellers on 360: GTA4, Halo 3, Assassin's Creed... we proved without a doubt that 360 delivers the biggest and best hits for gamers."

10:33 am PT: "Franchises like Rock Band, Guitar Hero... the success of these titles proves that Xbox can deliver to EVERYONE. The question we get every day is: can we deliver to our fiercely loyal fans while continuing to transform the industry? The answer is yes, and today we'll prove how."

10:34 am PT: "You're about to see some of the most anticipated games on the horizon, Fallout 3, RE5, GoW2... these represent over half a billion in projected sales. These are intense games, and many are not for the faint of heart... so fasten your seat belt." Adrenaline! Intriguing characters! Immersive stories! That's what's in their lineup this year, apparently. A strange, black-and-white clip plays, showing an old-fashioned family living the perfect suburban life. Where will you be when the atomic bombs fall? It's a vaultec ad, of course!

10: 35 am PT: Prepare for the future, the video tells us. Unfortunately, the future is a nuclear wasteland -- albeit a stunningly rendered one. We see Fallout 3 peering over the devastation and readying his weapon. Todd Howard, Game Director from Bethesda is up. Fallout 3 incorporates everything Bethesda has learned from Oblivion. A live demonstration begins.

10:37 am PT: "You just saw the first half of a trailer that will debut online in just a few hours and on Xbox Live... when we did Oblivion on the 360, we took a lot of risks and learned a lot. We've taken all that learning and applied it to Fallout 3...." Demoing the game, controller disconnected. "I'm good..." A ruined Washington DC is our first sight, with a third-person camera switching to first person as a floating robot whizzes by The PIPboy 3000 is shown (it's on your wrist!) and Todd examines his stats and his "ridiculously violent" weapons

10:39 am PT: You can play stealthily, aggressively and... oh, Todd has gone for the aggressive route. He pulls out a rifle, and targets the body parts of a nearby enemy. He fires a shot, with a slow-mo shaky cam shot showing limbs exploding violently. We're going to like this game. Some cute marching band music plays in the background, rendering a truly surreally violent encounter. Todd switches to a laser rifle and targets the torso of another enemy. Pow, splatter, smile.

10:40 am PT: The world's scale is enormous, with dilapidated structures and roads covering the entire field of view. Todd whips out a rocket launcher and wreaks havoc, followed by an EMP grenade which shuts down a robotic baddie.

10:41 am PT: "You can be a good person, a bad person and anyone in-between. A helicopter lands, kicking up dust. The "fatman," a mini nuclear bomb catapult is the response. The camera follows the warhead in slow-mo all the way to its destination. "It's a pretty effective weapon."

10:42 am PT: "I just wanted to say how much we love XBLM... we'll be doing substantial exclusive 360 and Games For Windows downloadable content. Thank you!" Jun Takeuchi, producer of RE5 is up. He's sporting an awesome Umbrella sweater. The world's first playable demo is about to be shown.

10:44 am PT: The game's director takes the controller, guiding Chris through a grimy abandoned building. He takes out a couple of enemies, with each shot sending them recoiling in a fairly believable way. The graphics are looking sharp -- and bright. Thanks, African sun.

10:45 am PT: The online co-op mode is confirmed, with another player taking control of Sheva, Chris' female companion. She collects some healing items, leaps down into a building and takes out those pesky not-zombies with a well-placed shot to -- of course -- an exploding barrel. While she has her hands full, Chris snipes from a distance, reducing enemy heads to clouds of red mush. Now that's teamwork!

10:46 am PT: (By the way, leaked news)

10:48 am PT: We're not seeing a major gameplay difference between this and RE4, but the teamwork and fantastic visuals should certainly keep things exciting. Chris kicks down a gate and meets up with Sheva. Bad news: They just ran into chainsaw-wielding bag-on-his-face guy. Will they survive? "We're out of time!" One more thing: Resident Evil 5 is out in North America and Europe, March 13th 2009. "Demo's over... "We do have one more thing we'd like to tell you today. RE5 will avail worldwide simultaneous, Fri. 13th, March, 2009. Please hang on just a bit longer, we'll have it to you shortly. Thank you very much!""

10:49 am PT: Peter Molyneux is up from Lionhead to talk Fable II. "Fable II is finished! All that innovation and drama has come together, and I'm going to share with you a few moments. ... we tried to put a lot of creativity and invention into the RPG." Demo video time.

10:51 am PT: His lugubrious voice confirms it: Fable 2 is finished. The opening moments begin to play. A bird soars through a winter-gripped forest, with castles looming in the distance. The bird flies across a sprawling town, with people walking about doing... well, fantasy world type things. The bird lands on a tower and promptly poops on a character down below. You're the little kid who just got an unpleasant surprise from the sky. We're shown the world of Albion. The hero and his doggy companion stand in a thick forest. Online co-op is here, with a new "twist."

10: 52 am PT: "I want to show you the ability to play in coop mode over Xbox live..." there are orbs that wander around the scenery, Fable II players in single-player mode, can invite them to the game. "Why? Your hero, your world is unique to you... we've got a dynamic landscape that changes, you want to invite people in!" Little orbs represent your friends playing their single-player games -- inviting them into the game is a matter of walking up to the orbs and pulling them into your game. Just like that, no lobbies.

10:53 am PT: Your world and character is unique to your game, so friends can hang out (or fight) in each other's worlds. Peter is taking his friend to his house to meet his wife and son. "It's the things that other games don't do... hang out in the bar and get drunk, chat people up, there' a whole wealth of things you can do. One of the things you can do is get married. ... I'm not a rich adventurer, but I've got a lovely family life, there's my son, and my coop buddy can interact with them. (My wife actually likes belching, by the way.)"

10:54 am PT: They stand in a quaint room, one soon filled with burping characters. The friend can even chat up Peter's wife, he notes. Oh, and one last bit of news: It's out in October (this year!)

10:55 am PT: A new clip plays. It's Gears of War 2, and we see Marcus and Dom in a bad place. Bad place referring to an underground cavern overrun with locust of all shapes and sizes. Marcus, with Locust shield in hand, runs straight into the madness.

10:56 am PT: Oh, it's Cliff Bleszinski. He's excited about the locust's return, and he's about to show off the 2-player co-op mode. Time to mow down some locust

10:57 am PT: Marcus walks towards an enormous (huge!) sinkhole, one that's swallowed chunks of an entire city. Yeah, these graphics are impressive. A great sense of scale and... uh oh. Marcus is fighting a gladiatorial, mace-swinging creep. Once he's gone, the hammer of dawn takes out a couple of reavers.

10:58 am PT: A locust attackes with a flamethrower, which Marcus promptly scoops up and uses to roast enemies to a crisp

11:00 am PT: More grappling hooks show up, and a stream of locusts launches an attack. Dust and rubble is everywhere. A Brumak shows up, with its shots from down below making the entire building break apart and shake.

11:01 am PT: Marcus and dom escape the collapsing building in a busted elevator. On the other side of the door is a brumak. The entire building is sideways, and Marcus and Dom make their way through several windows and doors, trying to get around the Brumak

11:02 am PT: "If they can ride them, so can we." Brumak riding? Sign us up. The demo ends. A new mode is called "Horde," a five-player co-op mode taking on waves and waves of locust. "Also, another announcement I have today -- a new mode. It's called horde, up to 5 players can take on wave after wave of increasingly difficult locust. It will be available November 7th worldwide exclusively on Xbox 360."

11:04 am PT: Don Mattrick's back. "Wow, how's that for 1030 on a Monday morning? ... we all share a common moment, where we were swept away due to interactive entertainment. We knew one day our industry would be bigger than all other forms of entertainment. That day has arrived."

11:05 am PT: "Today, our industry belongs to everyone. As the popularity of games spreads fast around the globe, we're registering our biggest year ever. According to a PWC forecast... games are now the leading driver of ALL entertainment spending. This is a breathtaking achievement, all of us are thriving. Especially those who love to play games... let's take a look at this growth, and how Xbox 360 is fueling it."

11:06 am PT: "When it comes to hardware, we're in fantastic shape. According to NPD, we're leading the market with the largest install base in the US, more than 5m ahead of PS3; in software, ahead as well, 2.7b in the last 12 months. In the last year 3rd party revenue outpaced the Wii and PS3 combined. I'm willing to declare here, today, that Xbox 360 will sell more consoles worldwide than PS3 and Wii. We'll offer an array of consoles with prices for everyone. ...A year ago, 6m people were connected to Xbox live, and it's doubled, a new member joining every 5 seconds."

11:07 am PT: Over 10,000 movies and TV shows can now be found on the marketplace, making MS the largest provider of HD content, notes Mattrick. "I'm proud to announce two a new content partner... NBC and Universal."

11:08 am PT: NBC Universal will now join the network, providing shows like Monk, The Office and Battlestar (according to the trailer clips). Universal also joins the service, with films like 12 Monkeys, The Bourne Supremacy, The Mummy, The Chronicles of Riddick.

11:09 am PT: It's available in the US as of today. There's also two new partners in Europe -- MGM and Constantin Film. "This content is available today starting in the US... we also have movies from MGM and Constantin available for download starting today. We've added 700 titles to our library... there you have it, that's how we're fueling our growth..." John Schappert, head of Live is up. "Thank you, I'm excited to be here today because I believe this gen of consoles will change the face of home entertainment more than any other generation before it."

11:11 am PT: John Schappert, head of Live services and software walks onto the stage, keen to show us how the Xbox 360 will change entertainment as we know it. The changes will happen online, he says, as more people connect and play.. Video chat, instant messaging and movies all play a part in it. We're shown the dashboard (complete with Lego Batman in the tray). A system update is downloaded, the screen fades and the 360 logo shows up.

11:12 am PT: A brand new interface for the dashboard, complete with 3D slides and.. yes, that's probably one of those Avatars. It's coming this Fall. "When people turn on their Xbox 360s this fall, they'll get an entirely new interface and dashboard, an entirely new Xbox through the magic of software."

11:13 am PT: "The new look and feel is more fun, more social, and simpler to use. You'll have a Gamercard, but there's also something new... it'll be more personal with avatars. Express your personality and style, share it with your community and friends. ... pants, shirts, hats... everything you need, it's all here." Demo time, Rare talking Avatars.

11:14 am PT: Time to hear about the "vision and history" of the avatars. The folks at Rare comment on its development, describing how it'll be a prevalent online representation of yourself. You know, a weirdly deformed representation of yourself

11:15 am PT: "Create, share, and have fun with all of your friends... but avatars are just the beginning. The new Xbox is tailored for the living room. Here we are at the community channel -- instead of a list of friends, you actually see them. You can chat with or send messages to your friends, but there's something new: create a Live party, private groups of up to 8 people, always connected and chatting as a party."

11:16 am PT: Avatars are just the beginning, he says. There's a new community channel, which shows your online friends loitering about and being up to no good. You can send messages or invite them to a "live party." Share your photos and generally push your own meaningless life on people who don't really care

11:17 am PT: A partnership with Endemol manifests in the "primetime" channel, which takes you and your pals into 1 vs. 100, a massively multiplayer game show coming to Xbox Live this Fall. You'll be able to win real prizes even, which we'd speculate include games, MS points and a sense of decency.

11:18 am PT: "XBL primetime combines the best of TV and of games to provide an entirely new gaming experience... and the best part, you'll all be able to win real prizes. This is opening the next frontier in entertainment. Developers are flocking to XBL Primetime asking how can we play? Instead of checking what's on TV this fall, you'll turn on Xbox and ask what's on Live. Now, let's go to the games channel..."

11:19 am PT: The Live party jumps from phot sharing into a new Uno game. The avatars are all represented on screen. A new Geometry Wars game is (finally) shown, depicting a frenzy of colors, explosions and all-around wrecking of 'tangles

11:20 am PT: A true sequel to the original Galaga is coming, Galaga Legion. It looks insanely colorful, bordering on the edge of seizure-inducing signals. We think we like it.

11:21 am PT: A special guest speaker arrives over audio. It's GLADOS from Portal -- she's announcing a "2008 exclusive" for Xbox 360, Portal: Still Alive. Portal: Still Alive, new levels and achievements coming this fall We'd never think we'd be so happy to hear her voice again, even though she's probably just going to try to kill us again. Finally, a South Park game is coming to Xbox 360. Because the previous South Park games were so unbelievably fun.

11:23 am PT: "We've already had more than 1m dwonloads of our free dev tools, and now we're getting ready for our first wave of community generated games on Xbox Live. The early returns look great. We'll launch community games in the fall as part of the new Xbox Live experience... as Don Mentioned, it's more than games."

11:24 am PT: Time to focus on Xbox Community games now -- it's launching this Fall, and Schappert tells us there's lots of good stuff in there already. Another media partner for video marketplace is coming too -- it's Netflix.

11:25 am PT: Head of strategy and business dev, Shane Kim, takes the stage. His avatar appears on screen and freaks us out. His eyes follow you around the room... "Xbox 360 will give you more entertainment than any other device connected to your TV. I'd like to welcome our head of strategy and bizdev, Shane Kim!" He's up. "Hello, and welcome to the party! We're inviting more people to 360 than ever before. Last year we featured an amazing lineup of games, and this year is no different."

11:26 am PT: Popular games are on the 360, he says. GTA IV's exclusive DLC will be a "huge event," and over 1000 games will be available on the system by the end of 2008. Rare's games (for everybody, remember) are to be shown next.

11:27 am PT: We see Banjo assembling a flying contraption and busting out of his house (that seems like an expensive way to leave your home every time.) It's their greatest adventure yet (it says), with the bear and bird piloting all manner of vehicles and crashing into huge dominoes (naturally.)

11:28 am PT: A Viva Pinata: Trouble in Paradise clip plays, playing on our "Awww, how cute" reactions with pinata piggies, birdies and other chocolate-filled creatures. We just want to eat them up.

11:28 am PT: Banjo -- the original classic -- will be released on Xbox Live Arcade this holiday

11:29 am PT: ""Xbox 360 brings everyone together for fun... this morning I have two new games that do that. Let's take a look..."Two new games are meant to ensnare the casual crowd. The first: a movie quiz game (which also supports the big button controller and avatars it seems), Scene It: Box Office Smash.

11:32 am PT: It'll be the first retail game to utilize the avatars. Codemasters and Zoe mode also provide an 360 exclusive: You're in the Movies.

11:33 am PT: Shane Kim assembles his posse, and walk onto a separate section of the stage. This game is about making campy B-movies via the Xbox Live Vision cam. Don Mattrick runs in front of the camera, and is placed in a cheesy CG animation of running clown pants. Yes, we just wrote that and yes, it's painful to watch.

11:34 am PT: John Schappert will be swatting bugs. A tacky voice-over encourages him, telling him he was "born to swat." We honestly can't tell if he's more embarrassed than us.

11:36 am PT: "Dance to the boogie! Strike a Pose!" You know what, no. This is just getting weird, watching Microsoft execs making fools of themselves. Do we laugh? Do we applaud? Do we quietly slink into our seats and pray for it to be over?

11:37 am PT: Now we're watching John Schappert fleeing a giant lizard capable of unleashing laser destruction. So, to sum up, you record yourself doing silly things, the game inserts you into pre-recorded clips and hilarity totally ensues.

11:38 am PT: "You can't shoot a movie without a camera, that's why You're in the Movies will ship with a Live Vision camera when it ships this holiday. Music games, of course, have taken the world by storm. Xbox 360 is the clear leader in this category, people can't get enough of this games. On average 3.5m songs are downloaded from Xbox Live every month. Xbox Live counts for 80% of all songs downloaded across all platforms. 80%!"

11:39 am PT: Shane Kim introduces Red Octane's Kai Huang to talk about Guitar Hero.

11:40 am PT: Kai Huang, prez/founder of Red Octane... "I'm excited to be here today to talk about Guitar Hero! ... even rock stars love to play this game. ... Guitar Hero World Tour is going to take our vision to new levels. On disc, we're shipping with the greatest number of master tracks ever, more than 85 total songs. While GH revolutionized the way people experience music, our studio is going to for the first time make and share music from around the world. It's going to revolutionize how people create, share, and discover music."

11:41 am PT: We're looking at the new peripherals (hi, touch-slide guitar) and are told that the World Tour will ship with 85 songs on the disc. You'll be able to make and share your music too, opening up Xbox Live to an unyielding torrent of tunes. Xbox Live subscribers will be able to grab a new REM track pack soon, and Metallica is "joining forces" soon too. Death Magnetic -- that's the entire album -- will be coming to Guitar Hero 3 and World Tour as DLC as soon as the CD launches

11:42 am PT: Stage Kim: "Xbox 360 is the world's greatest stage for music games..." time for the Lips demo, or whatever they're calling it.

11:43 am PT: A brand new music party experience is coming exclusive to Xbox 360 from Microsoft Game Studios. Ah, this must be Lips, complete with pulsing, wireless microphone. The interface seems very Singstar-esque, though we suppose there's only so many ways you can do in-game warbling.

11:45 am PT: And yes, it really is called Lips. Developed by Inis -- Keiichi Yano steps onto the stage, hoping that we're "ready to have some fun." Lips is the first game that lets you sing from your own songs. You'll be able to plug in your Zune! Also, your iPod. "Lips breaks new ground by being the first game to let you sing from your own music collection. Lips features wireless, motion sensitive mikes." Now Duffy is singing her own track.

11:47 am PT: We're introduced to somebody... Duffy. Honestly, we have no idea who she is. All we know is that she's assaulting us with a high-pitched aural burst as she makes her way through the song. She's doing "ok" .. on her own song. If updates cease at this point, it's because her singing has caused our bones to shatter

11:48 am PT: "Why won't you release me." These lyrics have somehow managed to perfectly capture our current state of mind. Reelllllleeeeassse yeah.

11:49 am PT: Oh, it's "Mercy" Duffy. We thought there was no mercy in this room. "Thank you for being a featured artist on Lips, Duffy..." "I don't think I've ever had as much fun singing that song!"

11:50 am PT: Shane: "Last holiday, we had another great experience: Rock Band. We're thrilled that Rock Band 2 will premiere exclusively on Xbox 360." "It's a real pleasure to be here to talk about Rock Band 2, which is debuting in September. The single most important aspect to the game: the music. The soundtrack includes 84 songs, every single one a master recording. It's the most compelling of all our games.

11:51 am PT: Shackler's Revenge -- from Chinese Democracy! Bob Dylan's "Tangled Up in Blue" ACDC appears exclusively in Rock Band 2, "the single most requested band" -- "Let there be Rock" is their contribution

11:53 am PT: Metallica, Pearl Jam, Devo, Jane's Addiction Modest Mouse, Interpol, they're all here. There will be 20 bonus tracks, available for free download this Fall. All downloaded tracks are forward compatible with Rock Band 2, and the original tracks from RB1 will be able to be imported into the game

11:54 am PT: Don Mattrick's back, welcoming one final guest. The president of Square Enix, Yoichi Wada appears (his avatar is adorable!)

11:55 am PT: Don Mattrick introducing Square Enix prez, Yoichi Wada: "Thank you very much for inviting me to such an exciting and inspiring media briefing. It's a great pleasure to be here. As I've watched the announcements today, I've seen with my own eyes how the 360 brings together players from around the world while constantly welcoming new friends into the gaming community.

11:56 am PT: He says it's a great pleasure to be here, and his announcement is prompted by how the 360 is bringing new players into the community. Square Enix has been building a partnership with Microsoft, the results of which will be seen in Japan, Europe and the US. Three major titles -- Infinite Undiscovery, Star Ocean: The Last Hope and The Last Remnant

11:57 am PT: Infinite Unidscovery will be released first as 360 exclusive on Sept 2 in US, sept. 5 in Europe and Sept. 11 in Japan and Asia. (this is old info)

11:58 am PT: Star Ocean is coming to 360 in Spring 2009 -- the last title alone sold over 1.3 million units, Wada notes. The Last Remnant is currently is out on Xbox 360 first, "this holiday season" He'd like to show us some "Exciting" new footage from the Last Remnant, and who are we to decline?

11:59 am PT: "The power of remnants" ... are awesome! They let you shoot fireballs and light up the sky, apparently. The Unreal-powered game looks sharp, with various saucer-eyed, pointy-haired protagonists staring into the sky dramatically. You know, it's a JRPG.

12:00 am PT: The LAst Remnant will also be heading to Games for Windows. Wada will let us know when the launch date has been decided. We'll hold you to that! (for the PC version) Don Mattrick has returned, giving us the quick summary. Blockbuster games, new interface for Xbox and entertainment for everyone. Oh, wait, Wada just interrupted him

12:01 am PT: Final Fantasy.... XIII? We're seeing winged creatures fling through the world of coccoon and pulse. Airships land in a huge, sprawling city, and robots emerge. Oh, Square CG, how we love watching you. It's Lighting! This is Final Fantasy XIII folks.

12:03 am PT: Explosions, futuristic trains, magical beings, machine guns, motorcycles... check, check, check, check and check. Was that enough checks?

12:06 am PT: "At long last, the day we have all been waiting for has arrived. It gives me great pleasure to unveil this to you today. An Xbox 360 version of FF13, the latest in the FF series, is planned for release! We believe that releasing a 360 version of FF13 will allow us to provide a game to even more fans in NA and across the world. ... "Last of all, I wanted to thank Don for giving me the opportunity to make this presentation, and of course, all of you for your kind attention and continued support of SqEnix."

12:07 am PT: Don: "Wow, that's incredible. FF13 is an astonishing addition to our growing away of RPG titles... it joins a long list of former PlayStation franchises finding a new home on Xbox 360. Enjoy the rest of E3!"

"Thank you all for coming." And thank you for reading! See you later!

Additional liveblogging by Ludwig Kieztmann.