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Microsoft E3 2008 press conference wrap-up

Highlights from the video game conference include news that there will be exclusive downloadable content for Xbox Live.

The new Xbox 360 dashboard Daniel Terdiman/CNET News

The E3 conference opened Monday in Los Angeles with a press conference from Microsoft. Here are some highlights.

Microsoft showed off first-ever game play footage from the post-apocalyptic title Fallout 3 and announced that there will be downloadable content exclusive to Xbox Live. We saw real-time action from Resident Evil 5, shipping on March 13. We got a peek at the new co-op feature in the game, where players will be able to team up and make their way through together. Developer Square Enix also made announcements that included the release of four titles for Xbox 360 including Final Fantasy XIII.

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As for console exclusives, we saw in-game action from Fable 2, shipping in October. Players will be able to seamlessly invite other friends who are also playing the game. Finally, we were blown away by the impressive game demo of Gears of War 2 shipping November 7. The game actually looks better than the original and will feature a five-player online co-op mode.

Microsoft will be releasing a new dashboard interface this fall that incorporates an avatar system--the Xbox answer to Nintendo Mii characters. The new feature allows you to join up with other friends to form a "party," a group of up to eight people where you can share multimedia items or start a game. A new mode called Primetime will actually incorporate real-life TV shows like 1 vs. 100 and allow Xbox Live members to play and watch these game shows and possibly even win real prizes.

Microsoft also announced a slew of new downloadable games. These include: Geometry Wars 2, Galaga Legions, a South Park-themed game, and most exciting of all, Portal: Still Alive, a follow-up to The Orange Box smash hit. Look for Grand Theft Auto IV episodes in the fall as well. Xbox Live users will be able to start downloading and playing community-designed games around the release of the update. With the new dashboard also comes the exclusive Netflix plug-in that will allow you to watch movies directly on your Xbox 360.

Microsoft also showed off games that are geared toward a younger audience. We got to see first-look footage from Banjo and Kazooie: Nuts and Bolts and Viva Pinata: Trouble in Paradise. Also included in this segment was an update to the Scene It! game as well as You're in the Movies, which will ship with the Xbox Vision Camera. The game captures footage of you while you play and compiles it into a watchable movie at the end of a session.

Franchises like Rock Band and Guitar Hero will be back with sequels. Rock Band 2 will feature a set list of 84 songs including new material from Guns N' Roses and will premiere on Xbox 360 in September. Guitar Hero World Tour will introduce a drum kit to the series that adds cymbals. You'll also be able to create and share music in the game. Finally, an exclusive karaoke game called Lips will soon be available for Xbox 360 that allows you to sing along with any music on your Zune or iPod. The game will ship with two motion sensitive microphones that allow you to decorate the screen while you sing.

Check back Tuesday for wrap-ups of the Sony and Nintendo press conferences!