The gameplay footage features tons of special effects in a new level. Once again, Cliffy B. demonstrated the arc to show how players can aim grenades. There were a few indications of slowdown but also there was a huge amount of action on the screen.

11:45am: After the Gears of War demo ends, Peter Moore arrives on stage. He joked about lost 360s in area 51. According to March NPD data 4.5 games and accessories per console were sold. According to these numbers this makes 360 the best selling console ever.

According to Mr. Moore this time next year there will be six million Xbox Live members. New Live games include:

Contra
Frogger
Pac-Man
Sonic
Time Pilot from Konomi
Ultimate Mortal Kombat
Rootbeer Tapper

12:00pm: Moore also announced that Lumines Live is coming to Xbox Live in a deal that includes Warner Brothers to bring live music videos behind the action. The example they showed was Madonna singing in the background.

Next-Gen games displayed included:

Lost Planet
Table Tennis
Mass Effect
NHL 2K7
F.E.A.R.
Too Human
Viva Pinata
Moto GP 06
Battle for Middle Earth 2
Sonic Next-Gen
Madden
World Series Poker
Saint's Row
Smackdown
Stanglehold
Enchanted Arms
Test Drive Unlimited
NCAA Football
Dead Rising
DDR Universe
Superman
Crackdown
N3: Ninety Nine Nights
Gears of War

12:10pm" Fable 2 was announced from Lionhead. Forza 2 was also announced and will be available this fall. It will support 12 people on Xbox Live as well as an Xbox Live Camera that attaches through USB. It works through a program called "Xbox Live Vision."

12:12pm: Sakaguchi is introduced and displays pre-rendered Blue Dragon footage. The game will be ready in Japan this holiday season with no mention of a US release.

After the Blue Dragon segment wraps up they moved on to Splinter Cell Double Agent. The footage mixes pre-rendered movies with in-game gameplay. The game will be available this September on Xbox 360.

12:15pm: Jim Veevaert from Microsoft Game Studios gave a demo of Viva Pinata showing the lives of Pinatas after the party is over.

12:20pm: After the Viva Pinata demo ends Marketplace talk starts. It provides users different ways to purchase games. The Fight Night demo helped to increase EA's game sales by 5 times. There will be downloadable TV content ready this week including a Gears of War docudrama that starts on Live and finishes on MTV.

The HD DVD player is shown and it is about 1/3 the size of an Xbox 360. It will be ready this holiday season.

On October 16th 2007 Grand Theft Auto 4 will be available on Xbox 360. There was no mention of an exclusive to 360.

The Crysis demo was shown for PC with real-time footage. It is basically the same footage that has been shown by EA.

12:30pm As part of a Windows Vista demo a PC flight simulator and Age of Conan was shown for the PC. The conference now switches gears to games for both the PC and 360. For example Elder Scrolls sold more than 1.7 million copies in three weeks. There will be more joint titles on PC and 360.

Moore announced Shadowrun on both PC and 360. Its an FPS developed by Fasa Studios. It will launch with Windows Vista in January 2007.

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