After riding high from the thrill of 
E3 last week, the video game industry got a harsh slap in the face Monday.
As reported by the NPD Group, sales of video games in the month of May were down 19 percent compared to a year ago — the worst performance for the industry in nearly five years.
After a surprisingly strong April, 
the video-game industry crashed and burned in May.
Software sales, the most closely tracked number by investors, were off 19 percent according to the NPD Group, the industry’s worst monthly performance since October 2006.
No one expected May to be a particularly 
stellar month for video game sales – but no one expected it to be a disaster either. Unfortunately, disaster doesn’t begin to describe the month.
Software sales nose dived 19 percent in May, the industry’s worst performance since Oct. 2006. Overall, brick and mortar sales were down 13 percent to $718.8 million. Year to date, the industry is 14 percent off of 2010’s retail sales pace, according to The NPD Group.
Microsoft is closer to 
turning Xbox into the everything box.
Sticking with a strategy to promote the Xbox 360 console as more than just a videogame player, Microsoft used its pre-E3 presser on Monday to reveal that the device will start offering live TV in the U.S. and integrate YouTube and search engine Bing as part of a relaunch this fall.
(Co-written with Marc Graser)
The launch of Kinect for Xbox 360 
was one of the big success stories of holiday 2010. With life -to-date sales of over 10 million units, the motion sensor controller caught the imagination of the casual audience, while boosting console and software sales at the same time.
But the months that have followed have been pretty barren. There have been no major Kinect releases since December and that has consumers getting antsy.
Microsoft is intensifying its
efforts to appeal to both core gamers and non-gamers, announcing two new titles in its blockbuster “Halo” franchise Monday and plans to integrate live television into the console.
Starting this fall, Xbox 360 owners will be able to watch live TV programming though a variety of partners, which have yet to be announced. In addition, the company has unveiled a new service that combines its Bing search service with video delivery providers.
Microsoft is covering its 
bases at this year’s E3.
The company, in its pre-show pres conference, announced a variety of new games and services, designed to appeal to everyone from core gamers to casual gamers to nongamers.
The videogame industry 
is at a crossroads of whether to reinvent itself or continue hyping what’s working.
While Nintendo and Sony are expected to unveil new hardware at this week’s Electronic Entertainment Expo, the videogame biz’s biggest tradeshow, which kicks off Monday from various venues around downtown Los Angeles, Microsoft is putting more promotional muscle behind its Xbox 360 console.
As the video game industry 
prepares for its annual trade show, known as E3, it’s carrying a lot of baggage.
Social networking and mobile games continue to eat away at the market share of traditional publishers. A crucial Supreme Court decision, which could fundamentally change the way the industry operates, looms over its head. And many companies find themselves at a critical juncture in their evolution.
Granted, E3 is a video game trade show, but in between all
the talk about Kinect and “Gears of War 3” at its pre-show press conference this year, expect Microsoft to have plenty to say about the non-gaming world.
The Xbox 360 has been a leader in general entertainment among the major consoles – but other devices, particularly Sony’s PlayStation 3, have been playing a good game of catch up. A recent statement by the company’s VP of corporate communications, however, indicates the company is hoping to ready to jump back out in front.
Chris Morris: Journalist 