Opinion: What We Want Microsoft to Announce Today

This year's E3 looks to be one of the most important for the video game industry since the show's inception in 1995, and all eyes will be on Microsoft and Xbox when they officially kick-off the pre-show festivities with their 10:25am press event in USC's Galen Center.

While the video game industry has seen some weakness during the recent global economic downturn, Xbox has reason to be pleased. Xbox hardware sales were down only 8% year-over-year (compared to -32% for Sony's PlayStation 3), according to April NPD figures, but Nintendo's dominance in the market has yet to be challenged. 

So today's Microsoft event takes on additional importance because we want to challenge Xbox to not only increase their userbase but also make a run at Nintendo. We take a stab at a few things we don't necessarily expect Microsoft to announce today, but, if they know what's good for them, they will.

1) Xbox 360 Slim (time to go all digital)

There's been quite a lot of talk surrounding the release of a slim version of the PlayStation 3, but we hope Microsoft beats them to the punch with a more consumer-friendly version of the Xbox 360.

On demand HD movies and TV shows, seamless Netflix integration, downloadable Xbox Live Arcade games, and mainstream "event" games like 1 vs. 100 just need an easier platform for the average consumer to dig into. We think this can be done by taking the current console, compacting it (Optical drive? Toss it, similar to how Sony is ditching UMD with the PSP Go), branding it in a lighter way and get it into stores for a small cost, all the while pushing those $50 annual Xbox Live subscriptions. Essentially, Microsoft can offer a family-friendly set-top box that also features Xbox Live Arcade and Community titles among other digital content.

2) IPTV

Microsoft has been talking about their home entertainment strategy, and if an Xbox 360 Slim were to be announced, there's no reason they shouldn't finally talk about IPTV getting into the console. Netflix and Xbox Live Video Marketplace have both been major successes, proving that consumers crave video content on the 360 and that Microsoft's console can control the living room. If you get an IPTV company to subsidize the Xbox 360 hardware (to benefit their viewership), consumers can theoretically get free Xbox 360 hardware while helping Microsoft increase their installed base and increasing their Xbox Live annual subscriptions.

3) More DLC, please

Grand Theft Auto: The Ballad of Gay Tony is instantly one of this year's hotly anticipated titles, and it could never be done without Microsoft making a significant push in getting exclusive DLC for their console. Original IPs are great, but sales-wise, they can be a crapshoot (Mirror's Edge, Dead Space, and the Xbox 360-exclusive Too Human, to name a few recent examples). However, if you have a great series, give the people more of what they want. Fallout 3 and Grand Theft Auto IV are examples of how this can work very well for Xbox, and we think it's the wave of the future.

These three things may very well be in our dreams, but we think they are three keys to Microsoft launching Xbox into another level of consumer penetration, and we hope that, whatever they announce today, we'll see them at least take a shot for the top spot in the industry.