By Barbara Ortutay, AP Technology Writer

NEW YORK: With a little help from the Beatles, Super Mario and price cuts from Sony and Microsoft, the slumping video game industry is hoping for a sales resurrection this fall.

The season gets a late-summer start Tuesday, with the release of "Guitar Hero 5," a game featuring music from the Rolling Stones, Nirvana and other popular bands. Then on Sept. 9 comes the launch of "The Beatles: Rock Band," which marks the rock icons' debut in a video game.

Plagued by the recession and a lackluster game release schedule for much of this year, the video game industry — which is bigger than the music business by some estimates — has fallen into a slump. It has been the first once since the latest game consoles — the Xbox 360, the Wii and the PlayStation 3 — were launched in 2005 and 2006.

The music genre — the second-most popular category behind action games — has suffered in particular, though that's partly because it's been so popular in the past couple of years that it needs exceptional sales just to stay even. According to the NPD Group, U.S. retail sales in the music and dance game genre were nearly $390 million less at the end of July than at the same time last year.

Music games invite you to play and sing along to real tunes, offering on-screen cues about when to finger guitar-like plastic controllers or hit touch-sensitive drums. When the game is played well, the songs sound pretty good.

"You just get into it — it feels like you're in a real band. It's like you're really on stage," said Marquez Alexander, 14, who bought two sports games Monday at a GameStop store near San Francisco's Union Square. He said he plans to pester his mother to buy him the new Beatles game — even though he barely knows the band.

"I never heard of them until I was like 7. It's just another game, another challenge," he said.

While John Lennon may have once boasted the Beatles were more popular than Jesus, time will tell whether today's video game fans feel that way. The "Rock Band" game will cost $60, which is typical for a big release, but there also will be a $250 version that comes with "limited edition" instruments resembling the ones the Fab Four used.

Video game industry analysts are cautiously optimistic that 2009 will end on a higher note than it began, not just because of the music games but blockbusters like Nintendo's upcoming remake of the classic "Super Mario Bros." for the Wii and Activision Blizzard Inc.'s "Call of Duty: Modern Warfare 2."

It doesn't hurt that two of the three console makers announced hefty price cuts in recent days. Last Thursday, Microsoft Corp. said it is slashing the price of the high-end Xbox 360, the Elite, by $100 to $299. A few days earlier, Sony Corp. rolled back the price of the PlayStation 3 by $100. That just leaves Nintendo Co., whose Wii has cost $250 since its launch. Analysts expect the company to bring down the price of the Wii, though it might do that by keeping the base price level and including more free games with it.

One hurdle for the industry: Several game publishers have delayed big launches meant for the holidays. "BioShock 2" from Take-Two Interactive Software Inc., "Splinter Cell: Conviction" from Ubisoft and "StarCraft II" from Activision have been pushed out to 2010.

It could also turn out that the biggest profits from the latest "Rock Band" game flow to the Beatles — and not Electronic Arts Inc., which is distributing the game, or Viacom Inc. the parent company of the game's creator, Harmonix Music Systems Inc. Though it's not clear just how much money it cost Viacom to license 45 Beatles hits used in the game — along with the band members' likenesses — that "doesn't happen for a little bit of money," noted BroadPoint Amtech analyst Benjamin Schachter.

As popular as the Beatles are, in many ways Activision is taking fewer chances and appealing to a much broader audience with its upcoming music games than EA and Viacom are with "Rock Band."

In addition to "Guitar Hero 5," Activision is also launching "DJ Hero" and "Band Hero," each targeted at distinct gaming audiences.

Following the success of "Guitar Hero," Activision CEO Bobby Kotick said the company realized there were still unsatisfied audiences — fans of hip hop, dance music and more family friendly tunes. He expects good demand for the Beatles game, but, he added, "It's a single category, it's a certain type of music."

With the latest "Guitar Hero," Activision is appealing to fans of Bob Dylan, Tom Petty and John Mellencamp. With "Band Hero," it aims to lure younger gamers who are fans of acts like Taylor Swift and Maroon 5 singer Adam Levine. With "DJ Hero," Activision seeks listeners of 50 Cent, LL Cool J and the Gorillaz.

"They are doing a smart job of really addressing every user base out there," said Signal Hill analyst Todd Greenwald. As for the Beatles game, "it's a big risk," he said. "It could be huge, it could be very disappointing."

Henrique Santos, a 22-year-old student from Brazil, tried a demo of the Beatles game at GameStop on Monday and said it was challenging but probably will be a hit.

"They're definitely not my favorite band," he said after banging away for a few minutes on an electronic drum set that's part of the game. "But for a game, the Beatles are the best party band, because everybody likes them."

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AP Technology Writer Jordan Robertson contributed to this report from San Francisco.

From AP

NEW YORK: After months of rumors and anticipation, Sony says it’s slashing the price of the PlayStation 3 by $100 to $299.

Sony Corp. said today it will cut the price of the currently available 80 gigabyte PlayStation 3 effective immediately. It is also launching a slimmer, lighter model in early September that will also cost $299.

Sales of the PlayStation 3, which launched in 2006, have fallen behind its rivals. Video game software makers hope Sony’s price cut will boost game sales ahead of the holidays. So far this year, the industry has seen as slump because of the recession and weak game release schedules.

Jack Tretton, president and CEO of Sony Computer Entertainment of America, says there is no question the consumer reaction to the cuts will be “phenomenal.”

I'm a little busy this week and likely won't have time for much gaming (outside of the random iPhone gaming).

I did get the chance to play one of the levels of the Resident Evil 5 demo. Pretty fun, but to me the player movements are a little clunky. I'm also a little unsure on the shooting mechanics. One head shot blows a guy's brains out while another zombie needs three shots to the skull to die.

Anyway, the following AP article is the real reason for today's post. Enjoy!

By DERRIK J. LANG
AP Entertainment Writer

LOS ANGELES (AP) — Don't hit that pause button just yet. Despite the tanking economy and an increasing number of video game-industry layoffs, many believe 2009 will be a year of evolution for games. The combination of innovative new titles, long-awaited franchise follow-ups and desire for escapism could spawn a gaming renaissance.

"While game makers providing traditional retail product will continue to concentrate on high-profile sequels and licensed properties in an effort to mitigate risk, many of the field's most exciting developments will actually be happening outside of your local GameStop," said DigitalTrends.com publisher Scott Steinberg.

By focusing on surefire $60 sequels that are appearing on next-generation consoles for the first time — like "Resident Evil 5," "Street Fighter IV" and "God of War III" — gaming publishers are expected to avoid economic pitfalls while independent developers are poised to provide cheaper, quicker and quirkier alternatives, such as $20-or-less downloadable games like "Flower" for the PlayStation 3 or "Darwinia Plus" for the Xbox 360.

"Why pay $60 for a game you don't have time to play anyway when dozens of bite-sized, instantly intuitive and schedule friendly alternatives are available for $5 to $15 right from your couch?" muses Steinberg.

Steinberg also anticipates even more developers will extend their games' out-of-the-box life with downloadable content. Rockstar Games is set to release "The Lost and Damned" exclusively on Xbox Live on Feb. 17. The "Grand Theft Auto IV" expansion will add new content and hours of gameplay to last year's top-selling action game.

Several grander gaming innovations were teased at last week's Consumer Electronics Show in Las Vegas. Sony showcased 3-D editions of such games as "MotorStorm: Pacific Rift" and "Wipeout HD" while Microsoft introduced "Kodu," a downloadable Windows PC and Xbox 360 program that allows amateurs — from children to adults — to create their own games.

"Video games are poised to eclipse all other forms of entertainment in the decade ahead," Activision president and CEO Mike Griffith proclaimed during his CES keynote speech. He cited market statistics which stated that between 2003 and 2007, the cumulative number of movie ticket sales and hours of television watched fell by 6 percent, music sales slumped 12 percent and DVD purchases remained flat. Over the same four-year period, Griffith said the gaming business grew by 40 percent.

With long-awaited exclusive PC sequels like "Diablo III," "The Sims 3" and "StarCraft II" also expected in 2009, this could be the year when gamers pay attention to something other than "World of Warcraft" on their computers. According to Nielsen Media Research, gamers spent 24 fewer hours a week playing PC games in 2008 than they did the previous year.

Rob Talbert, gaming manager and host of Arcade on ManiaTV.com, longs for PC gaming to prosper in 2009.

"I think I speak for a good portion of the gaming community when I say that it's very possible that 2009 will be the year that PC gaming makes a comeback in a big way," said Talbert. "I can't remember the last time I have seen this much excitement over PC titles, and I hope these games can live up to the hype and the gaming community's expectations."

Wedbush Morgan video game analyst Michael Pachter describes his outlook for the gaming industry in 2009 with one word: discovery. He believes the increasing number of diverse console owners, especially those with Nintendo Wiis, will demand new software — and publishers will figure out how to directly market their wares to such folks in exciting new ways.

"They must discover how to reach those audiences," said Pachter. "It's not like they won't want new games."