Nintendo, Sony and Microsoft have showcased motion-sensing gadgets at the E3 Gaming Expo in LA, while UK retailer Game has announced it is facing difficult times.
Motion-detecting technology allows users to dance with their computers
Microsoft's Kinect new Xbox 360 motion-control system was among the gadgets on show.
It uses motion tracking, face and voice recognition and a depth detecting camera to enable gamers to play using their entire body.
Determined not to be left behind, Sony also unveiled a new motion-control devise, offering fans its new PlayStation Move controller system, to go on sale later this year.
Nintendo unveiled a 3D version of its handheld DS device, but said it was not replacing its Wii console in the near future, believing it can keep generating sales in the face of Sony and Microsoft's offerings.
Developers and publishers have been splashing cash to create a buzz around their products and set them out in a crowded marketplace.
The $60bn industry has been hit hard by the recession and believes that the slew of new products in the pipeline will enable it to get back on its feet.
"It's quite difficult," said Jason Subia, who helped plan the E3.
"You constantly have to come up with new ways and new ideas to grab their attention and get your message across."
Meanwhile, British computer entertainment retailer Gameannounced a new chief executive and warned it expected to make a first-half loss.
The company, which has 1,343 outlets in Europe and Australia, also said it expected to have to slash prices to compete, hurting profits further.
A collapse in the global PC and video game market along with intense competition from supermarkets and online retailers has hurt Game.
Its shares fell 6% on the news, having already halved over the past year and leaving the company worth around £287m.
Analysts said the retailer should start to revive when the new products showcased at the E3 go on sale from later this year.
BY Jonathan Robins,SNO
