I think it is clear that Sony has the most to prove (and therefore the most to lose) at E3 this year. They already showed off two of their biggest 2009 titles (God of War 3 and MAG) at LAST year's E3, meaning they not only need to blow us away with more footage of those titles, but they have too surprise us with something new as well. On the other hand, it is clear that GT5 will be shown off this E3 (whether it makes it this year or not is another question), which is a huge game that will be great to show off. A price cut announcement is unlikely, but it would certainly help. Right now Sony is well behind in total sales and slipping further and further away. I do think it is important for Sony that MGS4 does not go to the Xbox 360. It is the only third party exclusive of any consequence that the PS3 has, and with a lower price in the future, the PS3 could have secured more sales based on that game. But if it comes to the far cheaper Xbox 360, that wont happen.
Microsoft isn't in Sony's rather dire situation. They'll want to maintain their momentum of late, but I do believe doing that will have to involve announcing at least two new games of consequence. To date, the best driving simulator available on consoles is Forza Motorsport 2, but GT5 will blow it out of the water. That means that Forza Motorsport 3, which we all know is coming at this E3, has too match the Sony exclusive. It cannot look like a poor man's GT5 or it will be rendered irrelevant. Beyond that, a game from Rare is needed and expected. I predict Killer Instinct 3 or Perfect Dark 2. Perfect Dark 2 may not happen because this year sees Halo 3:ODST, but then next year will see Gears 3 and possibly Halo 4, so it's not like it'd be a better time. Some more JRPG's would be nice, from a gamer's perspective. But from the perspective of sales, all that will matter in terms of JRPG's is what happens with Versus, and possibly what happens with Kingdom Hearts 3. I cannot imagine the Xbox 360 getting a price cut at E3, but if Sony makes one it's possible Microsoft will respond prior to the holidays.
Whilst I fully expect motion control additions on the parts of both Sony and Microsoft, I don't expect either of them to add much to the sales of these consoles.
Nintendo is kicking ass from a sales perspective, but you'd be hard-pressed to make that argument from a games perspective. Last year's E3 was attrocious for Nintendo, an absolute flop. Does Nintendo need to have a stellar E3 to ensure that they win the latter half of this year in console sales? Of course not. But at the same time, signs are beginning to show that the Wii will stop getting a free ride games-wise. Nintendo still has colours, price drops, and a whole bunch of bundling options open to them to generate sales, but what is really needed is some genuinely awesome video games. Wii Sports Resort will be shown, but that won't do much to boost the Wii's library. The sad and unfortunate fact of the matter is that in the very generation Nintendo has done the right thing by third parties, third parties have let Nintendo down. The Conduit looks good but it's hard to imagine it will be up to par with the HD console's shooters, which leaves it too Nintendo to create some magic. The time has really come for the announcement of a massive, MASSIVE first party title. I'm talking a sequel to Super Mario Galaxy, or a true Wii Zelda. I would have though Wii Zelda almost certain were it not for the announcement of Spirit tracks for DS.
Let me know what you think of my thoughts, and who you think will win E3 and why. Please keep the discussion to home consoles only, if someone wished to make a handhelds thread feel free.
starcraft - Playing Games = FUN, Talking about Games = SERIOUS
Next Gen 
