The graphics? Im sure the things we'll see at E3 will be very pretty, very crisp, lots of soft glowiness and lots of special effects, but I don't know if they will truly register in my mind as "next generation". By the end of the 360's life cycle, I may be saying that they do look in fact next generation, as it takes forever till they can squeeze every bit of power out of the hardware. Halo 2 is a great example. That game just defies what you thought was possible on a 733mhz Pentium 3 (also I do have to give props to Splinter Cell: Chaos Theory...also rather pretty). I'm assuming the graphics will feel like just a bit better than what we have now on the very latest xbox games, but 60fps-smoothness at high-definition, all nicely anti-aliased.
The games? Well there was the notorious omission of two key pieces of information.
1. Halo related property: Halo 2.5? Halo 3? I think we'll have to wait a
while for word on this unfortunately. This is a big deal. This is MS's system-seller.
2. Backwards Compatibility: Can I play all my original xbox game son this beast? I better be able to. I really don't want to have to cram another box under my TV shelf, and rewire it all..One box to rule them all.. The games I did see glimpses of looked pretty good, although there just wasn't much to see. All the Tom Clancy stuff will be amazing, Gears of War looked really good, I never really got into Perfect Dark on the N64, as it was right at the end of the cycle, and I kind of switched over to playing UT on my Mac. I think they will have a slow start without a Halo title. I can't even get psyched about it yet...

Overall master plan? Very good. I think Xbox Live is the iPod of the gaming world today. And it's just gonna get better. It's such a contrast to the whole Sony strategy of "we'll give you an ethernet port, you handle the rest". I love being able to send a game invite to my brother when he's online, if he were ever playing anything but Halo 2. So the 360 having very good Live support for free right out of the box is brilliant. I dunno if they will be able to spawn this mini-economy of people buying and selling customized game content, but we'll see. I think they do have a chance to knock Sony off the pedestal, but it will be a long, bloody battle. MS does have the momentum right now, and time to get some good titles out before the PS3 launches. The other thing I think that will keep MS chugging along is the ease of development. I remember during the lead-up to the PS2 launch, seeing these game conference announcements of translated Sony executives talking up the PS2's "Emotion Engine", and how it would allow for game characters to have lifelike emotions, among other abstract features. I don't remember encountering any of that in SSX or Grand Theft Auto. I do remember hearing about how hard it was for developers to tap these powerful vector processors that the PS2 had. MS is spending a TON on XNA, which seems to be a huge play to consolidate all the efforts of PC game developers to deploy across all platforms easily. Smart move, and I think it will keep the PS3's enigmatic IBM-designed processor known hilariously as "the Cell", on par with the 360's power, as that will be the baseline developers will write to. Sony will have a few knockout 1st party games, but the bulk will look about the same on both.

Wildcards? Nintendo. Still huge innovators in the game world, I totally respect their place in the field. I do hope they have a few tricks up their sleeve, as talk of 3D games (as in with a stereographic headset of some sort) sounds very cool.

I'll update this post-E3 to see where we're at.

POST-E3 UPDATE: Well Sony has show their cards, Nintendo didn't show much, and the stage is set for a huge multi-billion dollar war for the hearts, minds (and wallets) of the gamer. Sony's PS3 looks really amazing. The demos that I saw truly did feel like a jump to next-generation, where some of the Xbox 360's did not. Specifically, Killzone 2, Mobile Suit Gundam, Fight Night 3 and the strange yet incredible Andrew Molina technology demo where some of the PS3 highlights. There has been a lot of speculation that the most spectacular PS3 demo- Killzone 2, was pre-rendered. If this was the case, Sony will have a major bungle on their hands. I still stand by my earlier statement that the vast majority of games will look equally great on both consoles, and the difference will be if the games are actually fun to play, and what the online experience will be like. MS has a huge advantage online, and Sony didn't lay out any new plans in this area. Many unknown factors could affect the outcome of this whole abttle. Pricing, delays and features being dropped could deal a death-blow to either company. And of course the world will eventuially get a glimpse of Halo 3, which could change the balance quite a bit.

PS3 Video clips:
- Killzone 2
- Mobile Suit Gundam
- The Getaway (Tech demo)
- Fight Night 3
- Sony Tech Demos (includes Andrew Molina)

Xbox 360 Video clips:
- Ghost Recon 3
- Gears of War
- Xbox 360 Games Roundup