Sony's wishful thinking
So I'm reading incoming SCEE boss Andrew House's comments about Wii gamers eventually upgrading to the PS3 because of Blu-Ray and a greater wealth of network experiences and it seems to be pretty obvious (at least to me) that Sony still doesn't understand the new demographics that the Wii has so successfully targetted. It's the same lack of understanding that has been on display at E3 for the past few years, first with the introduction of the sixaxis controller and this year with the display of their motion-sensing technology.
Perception is half the battle
When the Wii was first introduced to the World it immediately began to grab headlines and enter the public consciousness, not just for what the technology was but also for what many people imagined the technology to be. People imagined the Wii remote to be a 1:1 device that perfectly captured a bowling or tennis swing and immediately showed the response onscreen. It didn't matter that this wasn't the reality. It still got people excited and the Wii delivered with games that were fun for a new audience as well as with many traditional gamers.
This year's E3 was interesting not only because both Microsoft and Sony showed off their motion-sensing technology but also because it has shown for the first time that one of Nintendo's competitors may have finally figured out the formula that helped to jumpstart the Wii phenomena. The differences in the presentations between the two unveilings couldn't have been any more stark. Microsoft had what is probably one of the most slick introductions of any new technology ever while Sony's presentation seemed to be unguided and unprepared.
Even if both technologies turn out to be similar or even if Sony's is superior it doesn't change the fact that Microsoft has scored a major victory in the battle of public perception. From newspaper headlines to television talk shows it's interesting to see how Microsoft's showing is being talked about and Sony's seems to have been all but forgotten. Some people seem to want to try to find fault with the controls but the same could be said about those that complained about the Wii's, they simply don't get it. It doesn't matter if the controls are prefect or not, if Microsoft is able to deliver with games and other software that is fun it's likely they'll meet with success.
Milo is the Teddy Ruxpin of videogames
Sony isn't the only one that doesn't get it, many videogame fans don't seem to get it as well and that couldn't have been more obvious than with the introduction of Milo. Milo is obviously not aimed at the hardcore gamer, but that didn't stop many from asking why Milo wasn't a hot woman or calling it creepy that he was a boy. What they fail to understand is that Milo is aimed at children and is meant to be like a Teddy Ruxpin for them. It doesn't matter if it's all smoke and mirrors because at the end of the day the audience it's being marketed to won't be discussing its AI or speech recognition, they'll simply be happy that it reacts to them. The software's ability to pick out some words will be more than enough to keep them enthralled with their digital playmate.
Malstrom doesn't get it as well
From what I've read it appears that Malstrom may not understand what Microsoft is trying to do. Project Natal is simply not a response to Sony. Not once during the presentation was Sony even mentioned and Microsoft made it very obvious that they are targetting the Wii's new demographics. As for the "whimper of the hardcore dreams", while it's very obvious that Microsoft is aiming this at the new audience they are not going to stop making Halo or Forza games and have indicated they will give the option of using motion-sensing with them. This also goes for traditional multi-platform games so the hardcore will see HD games that use motion-sensing controls.
On the issue of porting, Microsoft is aiming to create experiences that differentiates its console from the competition. This is much like the DS has done, so porting is likely the last thing they want. As for third-parties making motion-sensing HD games from the ground up, if some are willing to make games for the PS3 with it's current installed base and made exclusives for the 360 during its first year, it's hard to imagine some not wanting to jump in and become the 360's "Wii Sports" if Microsoft's motion-sensing offering takes off. It's also likely that Microsoft will offer incentives (advertising, free licensing, etc) to get the support they need since they'll have so much riding on the technology.
The End
