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You may have missed it, but the most important entertainment festival in the world was held this week. Nope, not the Toronto Film Festival, or Cannes, or Lollapalooza, but the E3 Media and Business Summit — the weeklong expo devoted to the US$57 billion a year in revenues video game industry.

Set in the middle of summer, E3 is the make-or-break chance for the big three (Nintendo, Microsoft and Sony) and game makers to promote their products for the uber-profitable Christmas season.

The theme this year appeared to be convergence as Sony made steps to bring its system more in line with some of the features of Microsoft’s Xbox 360, and Bill Gate’s old crew made a decided move towards gathering some of that “casual market” that the Nintendo Wii has made its name on.

As for Nintendo — well, they continued to make decidedly “out there” products that will no doubt sell a bagillion but are causing online fanboys to pull out their hair and scream for the olden days of “Mario” and “Metroid.”

As no one was selling a new console this year (we all thank them), the focus was all on the games (for once) and the hot, new “peripheral” market. Everyone wants you to swing something or bang on something in front of your living room TV, instead of actually swinging something or banging on a drum set.

So how did your favorite system do and what do you have to look forward to spending your hard-earned cash on this year?

Microsoft (Xbox 360)

Settling into the number two spot in popularity behind the Wii, Microsoft’s E3 presentation played to its two major strengths — the deepest game library on any system and its dominance in online console gaming.

Microsoft rattled off a long-list of highly-anticipated games for its console like Gears of War 2, Fables 2, Resident Evil 5, Fallout 3 and announced some very solid upgrades to its already solid online offerings and operating systems.

But it also took a decided step towards Nintendo’s massive casual audience with a number of family-friendly titles and even some Wii motion-control type games.

It also managed the biggest scoop of the show with the announcement that the long-awaited Final Fantasy XIII will be hitting the 360 at the same time as the PS3. This certainly caused a lot of soreness for Sony executives.

Nintendo (Wii, DS)

Nintendo really underwhelmed this year at E3, and lots of hardcore fans are a bit miffed. Sequels to their two biggest franchises, Mario and Zelda, were whispered about but not present. “Wii Sports Resort”, the sequel to their major breakthrough on the Wii, was announced but left some gamers confused about Nintendo’s choices of sports that the game will include (Frisbee? Really?)

But their new Motion Plus device, which makes the Wiimote more accurate, appears to be a real winner.

But if hardcore gamers seem a bit miffed, the company hardly needs to worry because of its massive market share of the previously unknown casual gamer. With 24 million consoles sold and rising every month, Nintendo’s new bread-and-butter is made up of seniors, kids under 10, baby boomers and (gasp!) women. A weak E3 performance won’t hurt Nintendo.

Sony (PS3, PS2, PSP)

Coming into E3, Sony’s main goal would be to avoid a disastrous presentation like its unveiling of the PS3 in 2006. It succeeded in doing so, by focusing on some new exclusive games (God of War 3, LittleBigPlanet, Resistance 2 and Killzone 2) and finally establishing some of the better features that Xbox 360 users have (like downloadable movies and TV.)

PS3 also confirmed it would bring “trophies” to its console, similar to the rewards system of the 360’s achievements. They also announced a much-need price cut to their system. A real solid showing, but Sony is going to have some real work ahead of itself to distinguish its system from the 360.

E3’s games to watch

Rock Band 2 (Xbox 360 in Sept., PS3 and Wii to follow later)

This ground-breaking series stole the thunder from its rival, Activison’s “Guitar Hero” series, with not one, but two major coups that were announced at E3.

That Rock Band 2 will feature the first ever AC/DC song in a music game (probably the most requested band from wannabee guitar heroes) was huge news. But that RB2 snared the first track (called “Shackler’s Revenge”) released off Guns N’ Roses’ decade-in-the-making “Chinese Democracy” is just the bananas. “Rock Band” developer Harmonix says there will be about 500 songs (via disc and download) available to play for the game by Christmas. Goodbye life!

Gears of War 2 (Xbox 360)

The first game sold over five million copies on the 360, and this one should sell even more. While the game play mechanics look fairly close as the first one, everything in the sequel screams, “Bigger! Badder! Better!” Think “Aliens” from “Alien” levels of upgraded awesomeness.

DC Universe Online (PS3 and PC)

This MMOPRG (that’s massively multiplayer online role playing game for newbies) could be a real system-seller for the PS3. Who wouldn’t want to create a comic book character and go on adventures with Batman, Superman or villains like The Joker or Catwoman with thousands of online friends? Best not answer that rhetorical question.

Grand Theft Auto: Chinatown Wars (Nintendo DS)

Probably the best-kept secret of E3 was the announcement of the GTA series moving to DS. Set in Liberty City, the game will follow Triad wars in the troubled metropolis. No word on whether GTA IV’s hookers will make the move to the kid-friendly DS.

LittleBigPlanet (PS3)

This unique game is a make-it-yourself platform puzzler and it looks to have stolen the Wii’s cute factor and put it on a real next-gen system. We’ve seen it before and E3 just confirmed Sony has a real winner here.

Spore (PC and Mac)

Wil Wright (the Steven Spielberg of video games) looks to have another winner in “Spore.” And by winner, I mean a reason to lock yourself in a room with your computer and some canned goods and come out sometime in 2010. “Spore” makes a player a God, starting life at the microscopic organism level all the way to creating a space-faring civilization. Millions of creature possibilities exist in the game and millions of hours will be wasted.

Wii Music (Wii)

Another music game — but Wii-ified. This game allows the Wiimote to be used to create the sound of 60 different types of instruments and players to create and orchestrate their own music. However, the early word on the game is that it may appeal to youngsters only, along the same way banging a piano does.

Story from: ctv.com

At Sony’s E3 presentation last week, PlayStation U.S. chief Jack Tretton promised that his company’s online service would become the premiere one on home consoles. How could Sony’s PlayStation Network trump Xbox Live? I asked them. Official Sony answers are in the video.

[UPDATE: Just to be clear, the interviewee here is not Tretton, who had made the Live/PSN remarks at the presentation. It's SCEA vp of marketing Peter Dille, who sat down with me after the Sony event. Jack was a few feet away doing interviews with other outlets]

(Video will not be accessible for users logging in from Canada or parts of Europe. Our apologies… SEE BELOW FOR A TRANSCRIPT)

Multiplayer: One of the things that [Sony Computer Entertainment of America president] Jack Tretton talked about in his speech today is .. that the goal for Sony is to make PlayStation Network the pre-eminent online service f or console gamers. Xbox Live has so many years of advantage on you guys. What do you think PSN needs to do or become to be that premiere online service for console gamers?

Peter Dille, v.p. of marketing, SCEA: Really, with PlayStation Network, I think we need to continue to work and iterate and make the platform better. I think if you look at what’s happened over the last year, there’s been tremendous strides, but we’re not going to stop today. We had a firmware upgrade a couple of weeks ago where we introduced the Trophy system. We have in-game XMB. These are things that our userbase was clamoring for and we were eager to make them happen. I think the introduction of the video download service is something that really enhances the entertainment value inherent in the PlayStation 3 and that’s something that I think is great to check that box.

But I think one of the things that differentiates the platform is that we’re doing things on our network that you can’t do on any other platform, including Live. And I come back to “Little Big Planet” as an example. … We’re putting the development tools into the hands of the consumers and then using the network to upload those back up to the network. That’s sort of the two way communication you can have on the network from the game design perspective that you can’t find anywhere else. I think “SingStar” is another great example where you can download content — and we’ve all seen downloadable content, whether it’s with “Guitar Hero” or “Rock Band” but with “SingStar” you can record your performance and put it back up to My SingStore. That all of a sudden changes the dynamics and creates more of a social networking site, which I think is a big win for PlayStation Network.

Multiplayer: And why are you saying those are things you wouldn’t be able to do, say, on Xbox Live. Because I know they have some video uploads and stuff like that. What’s inherently the difference that makes it more possible on PSN?

Dille: Well, I think if you look at the reaction of a game like “Little Big Planet” at Game Developer’s Conference where it got a standing ovation, it’s based on how special that product is and people recognizing the potential of it. So I’ll focus on what we have versus what the competition might have. I think what we’re doing is pretty cool. I also think it comes back to great value. There’s an awful lot of content you can get on the PlayStation Network. We’re not charging consumers a subscription fee to get online and play games head to head. So it’s no hidden fees and jump right in. We’re pretty excited about what that offering represents.

Story from: Multiplayerblog.mtv.com