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Ubisoft booth at the Electronic Entertainment Expo (E3), in Los Angeles, California, on June 9, 2011. (VALERIE MACON/VALERIE MACON/AFP/Getty Images)
Ubisoft booth at the Electronic Entertainment Expo (E3), in Los Angeles, California, on June 9, 2011. (VALERIE MACON/VALERIE MACON/AFP/Getty Images)

E3

Media, entertainment industries take note: The game industry has figured it out Add to ...

"The days of going to stores to buy games are over," says Mr. Minn, as he showcases once more the gastrointestinal faculties of his game's various protagonists. "Nintendo doesn't want to hear that, Sony and Microsoft don't want to hear that, Wal-Mart doesn't want to hear that, but it's true."

But the thing is, Wal-Mart might be the only one of those companies for which that statement is correct. The three major console-makers in the business right now all run on-line stores, where users can download everything from $60 games to HD movies to free demos. A significant portion of Microsoft's 90-minute press conference is spent showing various ways Xbox users can take advantage of this functionality. Steam, an online computer-game shop, regularly makes some of the biggest titles in the world available for purchase on the same day they hit retail store shelves.

Many of the new business ideas coming out of the gaming industry are going to fall flat, or at least annoy a lot of people (many gamers protested, for example, after Ubisoft tried an anti-piracy measure that forced players to remain on-line any time they played a game, and would not allow the game to run otherwise), but nonetheless, the industry keeps experimenting.

Walk to the back of one of the showrooms and you'll find a neat little side-effect of this experimentation. This row of PCs is the staging ground for the show's small, indie games. Some of this stuff looks like it was coded on a drunken dare. On one machine, you play a vector that must navigate through a tunnel without hitting the edges. That's it - it's cheap-looking and simple and, for some inexplicable reason, maddeningly addictive.

The rise of those on-line stores on most major game consoles has been a boon to the indie game world. Apple's app store and similar outlets have given small-time game developers a way to easily distribute and make money off their creations. It's not a completely telling statement, because each download costs so little, but the best-selling game of all time is probably Angry Birds.

And once users buy those games - be they big-budget or indie titles - the industry is getting better at keeping them hooked. On-line leader-boards, "100 per cent completion" bonuses, achievement points, virtual trophies, all of that stuff matters. Because those consoles are all hooked to the Internet, and because just about every big-name title released today is inevitably followed by various new add-ons and other downloadable content for purchase a few weeks or months later, there's a lot of money to be made in keeping a gamer's attention.

You can see the potential everywhere: the billboard space on all the virtual tracks in those car-racing games, it's up for sale. The Microsoft Kinect hardware that lets a user control games simply through movement and voice, how long before it's programmed to recognize that Canucks jersey you're wearing and send you ads for playoff tickets? And how long before the other major media industries start trying the same business models?

The Galen Centre 10 a.m.

A lot of this looks familiar. The Microsoft press event, packed with journalists and industry types, kicks off with a preview of the new Call of Duty game and ends with a sneak peak at the new Halo game. In between, the vast majority of new titles announced here will be sequels, prequels and other entries in well-known, best-selling franchises. The following day, Nintendo will do the same thing, offering a presentation full of Mario, Zelda and similar beloved characters. Game developer Bethesda's big title at E3 is the fifth instalment of the Elder Scrolls series. All over the hallway walls are ads for the third Saints Row game.

(As an aside, the folks responsible for marketing Saints Row will make a serious run for the title of Most Crass Advertising at E3. In addition to the bikini car wash mentioned earlier, they will proudly announce they've pimped out a lucky contestant's 1998 Honda Civic to the tune of $30,000, explaining that it's all a part of the Saints Row "win a rim job" contest).

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