At E3, video games shift their aim to casual players

— -- This year's downscaled E3 video game expo drew about 4,500 gamemakers, analysts, retailers and journalists to L.A. last week — less than a tenth of E3's size two years ago — even as the industry grew from $10.5 billion in 2005 to $18 billion in 2007.

And the inviting nature of Nintendo's Wii and games such as Guitar Hero have transformed the market.

"No longer is there a stereotypical gamer," says Michael Gallagher of the Entertainment Software Association, which runs E3.

Displays targeted new gamers as heavily as hard-core players. USA TODAY reviews the highlights of E3 2008.

Xbox 360: Singing (and acting) along

Several games unveiled by Microsoft cater to the casual crowd, including the karaoke game Lips, which comes with a wireless, motion-sensitive mike, and You're in the Movies, which uses the Xbox webcam to insert players into a modern spin on charades. (Both due later this year, no prices set for games unless mentioned.)

A refurbished Xbox 360 "dashboard," due this fall, will deliver a cleaner, Windows Vista look to the system's interface. And players can create realistic avatars (observers compare them to the "Miis" used on Wii) that will show up in new games such as the card game Uno Rush, out later this year. With that update, Xbox Live Gold level subscribers ($50 annually) who also belong to Netflix will be able to watch many of their Netflix requests — at least 10,000 of the service's catalog of 100,000 DVDs — over the Xbox 360 online service.

Also this fall, a new Primetime TV channel will let Xbox Live members compete in (and watch) live game shows for real prizes, the first being a version of NBC's 1 vs. 100. "A totally new Xbox experience will be delivered through the magic of software," said Microsoft's Don Mattrick.

And the entry-level price, for an Xbox 360 with a 20-gigabyte hard drive, dropped $50 to $299; a new model with a larger hard drive (60GB) will be out next month for $349.

Wii: Earning a resort vacation