E3 to prove whether motion controllers are "game changers or gimmicks"

This year's E3 will be the litmus test for Microsoft's Project Natal and Sony's Move motion controllers, as the industry gathers to judge the Xbox 360 and PlayStation 3 peripherals.

Wedbush Morgan's Michael Pachter said that the new technologies have the potential to boost hardware sales for both companies, as well as new software sales for third-party publishers, although he doubted pricing details would be set in stone.

"After a difficult year in the videogame industry, next week’s E3 Electronic Entertainment Expo has the potential to turn the tide of investor concerns and start a wave of positive momentum for the videogame industry for the rest of 2010," said Pachter in a preview of the event.

"The much-hyped Natal and Move motion controllers have the potential to drive meaningful incremental hardware and software sales upon their releases, and the entire videogame industry will be anxious to see whether the new devices are game changers or gimmicks."

Microsoft's Project Natal has the higher profile after a full-year of hype and media coverage, although the company has only shown a limited demo of the system - mainly consisting of the mini-game Ricochet - highlighting the family-friendly audience the company hopes to capture.

As well as the usual press conference, Microsoft is hosting an event dedicated to Natal, and last week Microsoft's Molly O'Donnell confirmed the system would get a rebranding in time for release. No price has been given for the device.

"At E3 Natal will have a real name, a real consumer-facing name, real games, real experiences," she said. "E3 is like our big Natal coming out party, we'll be unveiling the future of fun."

Although shown at an early stage at E3 last year, Sony's Move was only named back in February but the company did say that in the US it would retail for under $100.

Pachter said that Wedbush does not expect the pricing of the devices to be finalised at E3, and Microsoft is more concerned about attracting new customers than profits from sales of Natal.

"We do not expect pricing to be resolved at E3, and think that Microsoft continues to weigh the lifetime value of a new Natal customer against the profits that can be made by the initial hardware sale."

While Sony and Microsoft go head-to-head with motion controllers, Nintendo has said that it will reveal more solid details of its new 3D handheld, the 3DS. It's also expected that a price cut on DS hardware in the US will be announced, following the Japan and UK cuts last week.

Pachter added that he didn't expect share prices to be impacted by E3, with the upside of Natal and Move negated by uncertainty as to which publishers could be successful on the systems.