Dec. 29, 2011 at 8:56 AM ET
The past year has offered plenty of major stories to keep gamers chattering. Here's what we thought were the most important stories to hit the industry over the past 12 months.
1. Supreme court gives games First Amendment protection
In the seemingly ceaseless battle over whether video games are "art" or merely "entertainment," the art side got a big boost this year from the federal government, of all places. In a landmark 7-2 decision handed down in June, the U.S. Supreme Court ruled that video games are protected speech deserving of full protection by the First Amendment of the Constitution. The ruling struck down a California law that would have limited sales of ultra-violent games to minors, and ensured that the self-enforcement regime of the Entertainment Software Ratings Board will remain the only retail protection for such sales. More than that, though, the decision helped legitimize a young-and-growing medium as a form of expression on par with literature, movies and music as far as the law of the land is concerned.
2. PSN suffers intrusion, extended outage
What started as a seemingly routine temporary outage for Sony's online gaming network was soon revealed to be a major breach of user data that potentially put millions of credit cards at risk. As the outage stretched out over weeks, Sony got hit with lawsuits and congressional subpoenas as it struggled to beef up its security and provide protection to its users. Sony offered a bevy of freebies to its users when the service finally came back after nearly a month, but the breach in trust is likely to make many Internet users reluctant to give their credit card information out online quite so readily.
3. 3DS fails to meet sales expectations, drops price quickly
While Nintendo's glasses-free, stereoscopic 3-D portable saw healthy first day sales, the new system's retail performance quickly bottomed out as the novelty of the 3-D gave way to a lackluster launch lineup. Worldwide sales continued to languish until Nintendo suddenly lowered the price from $250 to $170, just four months after the March launch. Not only was it the quickest and most drastic price cut in the company's history, the company simultaneously offered 20 free downloadable classic games to sweeten the deal. The move seems to have worked somewhat. Sales have slowly rebounded going into the holiday season, thank in part to high-profile titles like "Super Mario 3D Land" and "Mario Kart 7."
4. Nintendo unveils the Wii U
All eyes were on Nintendo at this year's E3 conference as the company prepared to unveil the follow-up to its best-selling Wii, and though vague details leaked out before the show, many gamers weren't prepared for the system's radical new design. Being built around a massive controller sporting a six-inch touch screen, as well as an array of buttons, joysticks and an accelerometer, the Wii U seems obviously influenced by Apple's iPad. Yet the handheld controller won't work when taken away from the TV-connected base console, making it less than useful as a true tablet computer. Despite the odd design, demos of hybrid, two-screen games like the "Metroid"-inspired "Battle Mii" and the rhythmic "Shield Pose" have convinced some skeptics of the system's potential.
5. PlayStation Vita goes from announcement to Japanese launch in under a year
The year had barely begun when Sony first showed off its long-expected PlayStation Portable follow-up, then code-named the Next Generation Portable, sporting an everything-and-the-kitchen-sink array of features. By E3, the system had a new name — PlayStation Vita — and a price point starting at $250 (without optional 3G functionality). Earlier this month, the new portable launched in Japan to respectable sales numbers, though associated software sales were surprisingly less robust. With European and North American launches set for February, the rest of the world will see Sony's next major console soon enough.
6. Japanese earthquake shakes game industry
Aside from being a humanitarian disaster, the massive earthquake and tsunami that hit Japan in March caused major disruption for the country's gigantic game industry. Companies scrambled to delay and cancel games that featured apocalyptic themes that could upset victims, while damaged facilities and electricity rationing led to further delays. But the disaster also gave game companies a chance to show off their civic responsibility by raising substantial sums for philanthropic aid to help those hurt the most by the disaster.
7. Nintendo faces financial hardship
After decades of consistent profits, Nintendo's announcement that this year would likely mark its first ever fiscal loss came as a bit of a shock to industry watchers. The news was especially shocking given that the company had been riding high on record sales and profit from the Wii just two years back. Whether the financial troubles are a small blip caused by an awkward transition between console generations or a permanent transition caused by the rise of mobile phone and tablet gaming remains to be seen, but either way, it was enough to get Nintendo executives to slash their salaries and offer profuse apologies to shareholders.
8. Microsoft unleashes new, video-fueled Xbox dashboard
Video services like Netflix and Hulu Plus have long played a key role in the success of modern home consoles, but Microsoft raised the prominence of its video on demand offerings this year, rolling out a new Xbox 360 dashboard featuring video options from partners ranging from Verizon and Comcast to YouTube, Bravo and Syfy. Microsoft's video options may not have many people throwing out their cable boxes just yet, but its yet another sign that video games are no longer the exclusive focus of home game consoles.
(Msnbc.com is a joint venture of Microsoft and NBC Universal.)
9. Zynga goes public
After years at the top of the hot social gaming market and months of speculation and planning, Zynga finally made its first public offering of stock earlier this month. While the initial offering price was well below what many market watchers had expected a few months before, and despite that price dipping even further as trading went on, Zynga still raised over $1 billion in cash during the sale, money it will likely use to help cement its position as a major player in the industry, whether traditional game publishers like it or not.
10. Miyamoto "retires" (but not really)
If you want to see how important a single man can be to the perceived prospects of a company, look no further that Nintendo and its creative head Shigeru Miyamoto. A Wired report quoted the long-serving Mario and Zelda creator as wanting to retire from his executive position in order to focus on more hands-on development work on smaller games. By the time Miyamoto clarified his meaning later in the week, stating emphatically that his role at the company was not changing, Nintendo's stock had already dipped 2 percent and the entire game industry contemplated seriously, perhaps for the first time, the prospect of a world without its most celebrated game creator.