Microsoft knew that this year it was all about software for the Xbox 360. Before anyone even jumped on stage to begin, we were being assaulted by Gears of War in all of its glory. It's obvious they're banking on this title, but it's dumb to think this was all they had.

While a few moments brought the crowd alive, this was a surprisingly subdued conference for Microsoft. Peter Moore led it the whole way through until the end when Bill Gates made an appearance. There was no excessive music; no showing off new pieces of hardware, and not very many surprises either. What Microsoft showed us was, for the most part, exactly what we expected.

We knew Halo 3 would show up, and it did. Bill Gates and Peter Moore's little false finish to their keynote was a nice cap leading into the teaser trailer premiere, and the revisiting of the tattoo (along with a cheap shot at Sony) to reveal Grand Theft Auto IV was great.

The rest of the show pushed online play. They're numbers are undoubtedly impressive, though Microsoft seemed to be preaching to a choir. They don't seem to have any strategy to pull new people in. There's no question their support for their current customers has been unbelievable (especially for E3). This focus doesn't speak to those consumers who may have been on the fence about the system, or those disappointed with Sony's showing that may be taking a hard look at the 360.

Aside from the surprising announcement of some nice Xbox Live Arcade games, the biggest innovation comes from Xbox Live Anywhere. This incredible technology makes sure you're always thinking Xbox, which is amazing from a marketing point. While it doesn't make the games any better or "next-gen" if you prefer, this ensures that Microsoft has a customer base involved in every aspect of their day-to-day technology use.

They also spent a staggering amount of time on Windows Vista, pushing how well it will handle games. It's nice to see PC gamers not left out in the big announcements from the show. Vista's integration with Xbox Live made it fit into the program schedule.

Finally, new accessories, including an unpriced HD-DVD drive, wireless steering wheel, and a camera sound like great additions to the hardware. Moore's claims of HD-DVD players selling out seemed exaggerated (low stock numbers would be the cause for that), as did the movie selection, which he also claims was sold out (likely because there are only three movies to choose from). The camera is the most interesting of the lot.

Like Sony's EyeToy, this will allow people to video chat, make their Gamertag what they want, or create a character with their face on the model. It's a great concept, but the control here needs to be tight. It only takes one idiot to ruin it, and left unguarded, half of Xbox Live will be littered with penises for Gamertags in less than a day. That's the last thing the industry needs at this point in time.

Aside from a rather dry presentation and lack of any major surprises, Microsoft firmly planted themselves in the middle. They failed to break past Nintendo's energy, but completely conquered Sony's frustrating and lackluster Playstation 3 showcase. If you're part of the Xbox 360 community, Microsoft loves you. This year's keynote proved it.