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On Monday, the first day of the 2009 Game Developers Conference in San Francisco, a conference attendee rides the escalator into the lower levels of Moscone Center North. This week, the world's largest professionals-only game industry event is attracting thousands of programmers, artists, producers, game designers, and developers.

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With the recession looming over even the resilient video games industry, this week's confab in San Francisco comes at an opportune time.

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Many game developers say the conference matters most because there is no other place on earth they can network with more of their peers, talk about jobs with more decision makers, or reunite with more of their friends.

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Nintendo President Satoru Iwata delivers the keynote address on Wednesday, discussing the company's design philosophy, but not announcing much in the way of news.

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Iwata unveils the Wii System Menu 4.0, an upgrade to the existing Wii Ware menu structure that also features the ability to save on and load games directly from high-capacity SD cards, which should be able to store up to 240 titles each.

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Iwata attributed Nintendo's design innovation largely to the company's famed chief executive, Shigeru Miyamoto.

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Iwata talked about a perception that Nintendo's deep pockets create an unfair playing field for third-party developers making games for the Wii or the DS. He said that while the company acknowledges the issue, he thinks that third parties have amply demonstrated their ability to succeed on the platforms.

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At the beginning of his address, Iwata said that worldwide Wii sales have now exceeded 50 million units, making the hit console the fastest-selling video game device in history. Further, the DS has now sold 100 million units worldwide.

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Palo Alto, Calif.-based OnLive has developed an online game distribution service that lets games be played from remote servers rather than on console hardware.

The system--seven years in the works--will digitally distribute first-run, AAA games from publishers like Electronic Arts, Take-Two, Ubisoft, Atari, and others, all at the same time that those titles are released into retail channels.

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Indie programmers and smaller game developers have their work on display at GDC. Competitions at GDC like the Independent Games Festival hand out awards for visual art, audio, design, innovation, and technical excellence.

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Vuzix has just launched its "augmented reality" using the CamAR and PhasAR, two devices that overlay computer-generated images on top of the real world. On the monitor, you can see the user holding a digital robot in his real palm.

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Many companies displayed motion caption hardware and software at GDC, like Arena, being demonstrated here.

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OptiTrack uses high-speed cameras and facial motion capture nodes to create facial expressions that can be overlayed onto game characters.

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Sumi, an Olympic mascot for the Vancouver 2010 games, struts on the show floor.

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FaceFX lets programmers create a library for a character's behavior, giving them custom actions that, when reused throughout a game, create a consistency for that character's movement.

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During the Nintendo keynote, the audience got a demo of Rhythm Heaven, an American version of a rhythm game for the Nintendo DS that Satoru Iwata said had already sold 1.7 million copies in Japan. The company got the capacity crowd excited by giving everyone in attendance a copy of the new title.

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Machinarium, a game from Amanita Design, is nominated in the Independent Games Festival's main competition for excellence in visual art.

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Cortex Command from Data Realms was nominated for technical excellence at the Independent Games Festival. In Cortex Command, you play as a prospector and explorer in a time when complete cybernetics and whole-body amputations are common practice. Your severed brain is able to control many different types of bodies remotely from its underground bunker: clones, robots, spaceships, defensive turrets, and so on.

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Blending the borders of the real world, shooters take aim at a digital target in a real world with Vuzix's augmented reality system.

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With Vuzix, digital targets are displayed against the backdrop of reality. The glasses display what's on the monitor in the lower left of this image.

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Isaac Epp, Tiffany Turrill, and Nino Navarra take a break from playing Flowers to snap a picture on the GDC expo floor.

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EyeBcom is a new scanning booth from Eyetronics designed to virtualize everybody. Current applications are personal video clips and a 3D interactive viewer that you can put on your Facebook profile.

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The booth takes three-dimensional images and can create avatars for many uses.

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