I think it's good but sorta weak. The Natal looks only slightly better than a PSEye and devices like that tend to work better on a stage than with the common user. I think MS is wasting their time with it unless they can make some improvements to the implementation, bring the cost down dramatically, and pack it in with consoles.
As for the upcoming games, the two Halos will certainly make a splash but the rest won't be massive. Good, solid additions to the line-up, no doubt, but not game changers. However, Alan Wake has seemingly been "next year" every E3, and I'm having serious doubts. Also, Forza 3 looks nice but it's not going to stop the juggernaut that is GT5. If Prologue can sell over 3.5 million copies while Forza 2 can't do that with bundling (I know some copies of Prologue were bundled too) it is not going to stop Sony's one true powerhouse. Still, all of those exclusives look like million+ sellers easily except perhaps Crackdown 2, which does not have the benefit of having the Halo 3 demo added.
None of the DLC/Arcade stuff impresses me except Ballad of Gay Tony and from what I hear that'll be on disc (maybe PS3?) later.
All told, I'm underwhelmed. Too many of the games I would play are going to hit the PS3 or the PC, while Forza 3 still doesn't rate in my book as highly as GT5. MS needs to do more to impress me, though their competition could still put up bad presentations.
You do not have the right to never be offended.
