12:15 am - We're all seated and situated. The theater is huge with three mezzanines and 3,400 seat capacity.

12:17 am - We're sitting in the Kodak theater waiting for the press corps, VIPs, and assorted industry folk to file in, ever so slowly. Pictochat sessions are starting to fill up as people take their seats and whip out their portables.  The announcer just told us to turn off all wireless and bluetooth devices before the presentation begins -- could that be so that our bluetooth doesn't interfere with the Wii's wireless capabilities? Sounds like a hint to us.
12:21 pm - So the crew is split into two levels of the theater -- we've got our writers up top and the photographers down below, right friggin' next to the stage. The folks in the nosebleed section seem ok with their lot. Many are sitting silently, pensively almost. Or it could just be that the coffee hasn't kicked in. On the speakers, hip clubby trance music. If Sony's pre-conference music was high school dance, this is college rave.



12:23 pm - We've been informed that the program will start promptly at 9.30 am PST, right on time.



12:28 pm - Here's the layout -- yellow and blue ticket holders were sent to the third and fourth floors of the theater. Green tickets are on the second level. On the ground floor, those with red tickets (Mushroom Kingdom) are holding court.



12:37 pm - And it has started: symphonic music : Miyamoto takes the stage and directs a puppet symphony with the Wii controller. He's looking dapper in a tux. As he waves his hands, the symphony adjusts its pace to keep up with him. The music swells when his arms wave wildly, the tempo adjusts with his tempo.



12:38 pm - The crowd goes wild -- that many symphony geeks? Who knew. First Guitar Hero, now Symphony Hero (not the actual title). We're being shown a driving game, a sword fighting game, and more conducting from Miyamoto. It's worth taking a pause right now to remark that these gamers are, in fact, waving their arms rather wildly. This system is going to be a workout, but we're cool with that.



12:41 pm - Reggie takes the stage: "You came to LA this week to peek into the future, but if all you want is next generation you're in the wrong place. What we're unveiling is the next leap in gaming. It's no longer confined to just a few, it's about everyone. It's not about what you see because what you see isn't always what you get. The next leap is about playing because playing is believing"



12:42 pm - Reggie's wearing the game executive's corporate uniform: suit and no tie. After a short intro, the Regginator steps off the stage and we're treated to a brand-spanking new trailer. Hipsters drumming, clean youth playing tennis, a middle-aged couple golfing, an  entire Japanese family conducting a symphony, an earringed, pony-tailed fellow steering an off-road vehicle. CONFIRMED: Speaker in the Wiimote.



12:44 pm - Now we're being shown a flight sim, then Metroid Prime 3. The Prime demo looks hot in terms of playstyle -- with the gamer ducking and rolling in order to dodge enironment obstacles. We're shown an updated Wario Ware with a variety of mini games that involve the controller. Depending on the game, the controller is held in a different fashion.



12:46 pm - A note on graphics: these graphics aren't all that impressive, but the gameplay looks super fun. Zelda demo demonstrates the Wii controller's use to shoot a grappling hook, shoot arrows, fish, sword fight. Reggie: "Two years ago we pulled the curtain back on DS and many said, 'huh?' Then nine months ago we revealed how Wii for Nintendo will change gaming forever, and a lot of people said, 'we'll see'"



12:47 pm - "Our purpose this week is not to feel your left brain with informationm but to jolt your left brain with inspiration." The Wii logo appears again, and the two little "i" characters take a deep bow. Very Japanese, but universally understood. After the trailer is over, there's genuine applause. The audience is certainly more into this conference than Sony's audience was into their conference yesterday. "Let me ask you ... 'do you know someone who's never played a videogame? I bet you do. How can this be? If we want to grow as an industry this has to change. And today, change begins today."



12:50 pm - "As many of you know, Nintendo's way is to challenge conventional thinking." Reggie spins a metaphor: "The graveyard of the industry is filled with the headstones of companies who tried to keep doing things the same way. Over the years our industry has come to gauge progress simply by what's displayed on screen ... In the same way that Super Mario 64 changed everything, we asked how do we make games that will entirely new. We will give you more fun for less money, and you will be playing we in Q4 in 2006."



12:51 pm - "Okay, the name ... we want to thank everyone that had good things to say about it ... both of you." Reggie's pronunciation of Wii is different. He says "Wii" in a clipped way, flattening the "i" a little bit, and driving it from the diaphram. "Every distincitive name sounds strange at first. Cahnge is good. [Wii is] a giant leap of gaming, for everyone around the world. It's the sound for the future."



12:54 pm - List of games: Metroid Prime 3, Dragon Quest Swords, Disaster: Day of Crisis, Fire Emblem, Sponge Bob Square Pants, Cars, Super Mario Galaxy, SD Gundamn G Breaker, Tony Hawk Downhill Jam, Sengoku Action, Excite Truck, Elebits, Red Steel, Rayman 4, Super Swing Gold Pangya, Sonic, Project H.A.M.M.E.R., Finalfurlong Revolution, Madden, Final Fantasy Crystal Chronicles, Twilight Princess



12:56 pm - "This is by far the best Zelda we have every made, and also the most beautiful game Nintendo has every made. But this is breaking precedent because this is the first time a Zelda game will be along side a Nintendo console on launch day." Nate & Bill of Nintendo to host world premiere of Zelda on Wii.



12:57 pm - Bill: Very basic control ... your movement is handles with the analogue stick. Zelda's targeting system with be handled using the Z button. The Wii control adds the presence of a fairy, which indicates where you will be pointing using the Wii controller. Forward swing is handled using the B button. Link's bow is aimed using the pointer on the Wii remote. The series of trailers went by quickly, but here's the impression we got from it: there's real variety in gameplay, and lots of variety in graphics. Some of the graphics look decidedly Xbox/GameCube/PS2, and some look incredible. It was unclear which were pre-rendered and which were footage of actual gameplay. The best-looking trailers were graphically impressive. Overall, sound was disappointing. We're hoping that's just an issue with the theater.



12:58 pm - "With the bow, the Wii remote adds depth of sound. Built-in to the Wii remote is a speaker. You'll hear the bowstring draw taught and you'll hear the bow sound draw to the screen as the arrow is shot. A quick jab with the Wii remote and shield shove. You'll feel the impact with the built-in rumble." Using pointer to launch boomerang. Classic Zelda chime heard on Wii remote speaker. You can pick up crates with the A button and then chuck them with a quick motion



1:01 pm - You have two different controllers and two different motion sensors. Link's iron boots also make a return. This time they lift you up [Link is hanging upside-down from the ceiling]. A quick rotation for spin attack, stab down with controller to do down thrust.



1:02 pm - The Zelda demo focuses almost exclusively on gameplay. Though the narrator tells that it's intuitive, the control scheme is actually fairly complex. It's certainly not dumbed down, but we wouldn't say that it's as intuitive that they're making it out to be either. Then again, few games these days are, and Zelda's one of those games that appeals to the core gamer audience. It won't be one of the titles that Nintendo uses to break into the mainstream market.



1:04 pm - Reggie: "This Zelda is the first ever to feature unique freehand control. Here in the America's Nintendo will launch two different versions: one for GameCube and one for Wii -- on the same day Wii launches ... Mario is  back too!" Game list again. Metroid Prime 3: Corruption is "most intuitive first-person shooter ever," says Reggie. Super Mario Galaxy: With freehand control Mario has new moves. Swing hand to grab objects ... swim threw space (and more).



1:06 pm - Excite Truck: "Now you're holding the steering wheel of a big damn truck! This feels like driving ... What happens if the bad guy is mother nature? Come feel the panic and bring the catastrophe uner your control"

1:08 pm - "Square Enix is offering exclusive iteration of Final Fantasy Chronicles." Excite Truck is one of 3 new franchises, the others being Project H.A.M.M.E.R. and Disaster: Day of Crisis. More third party titles:

1. Hyper Sonic.  "Finally the speedster is totally under your control."
2. Final Fantasy: Crystal Chronicles.
3. Madden 07
4. Activision's Tony Hawk's Downhill Jam
5.  Ubisoft's Rayman
6. THQ's Spongebob Squarepants


Reggie: "We are not gonna specify a launch number this morning, you'll be playing 27 titles on the show title tomorrow. That 27 does not include Virtual Console [games]."



1:10 pm - Now showing Red Steel demo: "Red Steel is a first-person action game set in US and Japan. Player must master both firearms and katana." Taking the stage,  Xavier Poix (studio director) and Roman Campos (lead game designer), both from Ubisoft Paris, where Ubisoft is developing the Wii-exclusive title Red Steel. Destuctible environments, soft bodies, realtime physics. Technical difficulties: The screen is blanked out with just a "Wii" logo, the Red Steel demo isn't being shown for the first minute of the presentation. When it comes back, there's a bit of applause.



1:12 pm - More still on Red Steel: enemies will care for themselves. They will hide, go for cover, and flank. Unique wepaons like the shotgun -- the shotgun is unique? AI uses 'clan system' where one enemy is the leader; if he is killed, the others become confused. Free shots mode: by holding button, player can freestyle, and target points on an enemy. You choose between killing or making them submit.



1:15 pm - Sword fight: the moves you make are intricate. You can block with left, and slash with right in any direction. That means there are dozens of combinations. This is easy to learn, but hard to master (sounds like the Tetris catchphrase). Playable tomorrow at E3 booth. Hate to inject a little bit of reality into the conversation, but Red Steel's visual quality lacks the sex and sparkle of the Sony demos yesterday -- take away the controller, and the game could run on an original Xbox or PlayStation 2. Nintendo would of course remind us that judging a game by what's displayed on screen is a mistake, but the game industry has tended to judge games visually for many years. Nintendo can't change the critical criteria overnight. They're going to have their work cut out for them on this front if gamers prove intractable in their lust for next-gen graphics.



1:16 pm - Reggie: "We want to switch gears now to what's hot right now: Nintendo DS." George Harrison enters: "What we've given you today is a promise: 'Wii' will make things better." The conference has moved on to talk about the Nintendo DS.  16 million Nintendo DSs have sold worldwide (that's sold, not shipped). "Wi-Fi service is easy and free. 1.3 million discreet wi-fi connection users totalling over 40 million gameplay sessions."



1:18 pm - Brain Age launched three weeks ago in North America. In Japan, 5 million purchasers. The first few weeks here have sold better than during the Japanese launch of Brain Age -- but does it have the same staying power?



1:19 pm - "Nintendo DS Lite is smaller, lighter, and brighter than the original. In only a week you'll be playing a new Mario game, which is the very picture of 'old school.' But this is a brand new Mario game, which will appeal to brand new players. Pokemon is coming too. You don't play with the Pokemon, you are the Pokemon."



1:22 pm - "Final Fantasy III ... be prepared to be fulfilled. The legendary title will have improved graphics." We're being taken on a tour through DS titles and sales. Tony Hawk Downhill Jam announced. Exlcusive Zelda ... The Legend of Zelda: Phantom Hourglass. Features sailing, sworday play, and the boomerang. All in all, 100 new games for DS from now until end of calendar year 2006, including Mario Hoops 3 on 3, Starfox DS, Diddy Kong Racing, Final Fantasy III, Yoshi 2, Elite Beat Agents (multiplayer multi-rhythm, Pokemon Myster Dungeon, Diddy Kong Racing, Big Brain Academy, Mario vs. DK: March of the Minis.



1:25 pm - Iwata takes the stage: "In order to [expand the total number of players who play games] we needed to target ... those who once played and who lost interest and those who never played before. How do we do this? The logical solution is to reinvent the relationship between player and game. The game controller interface. We believe this approach can appeal to a much broader audience. Our first implementation [of this imprvement] was Nintendo DS. At first it confused some people, but these people started to understand when they started to pet their puppies with their stylus."



1:27 pm - Iwata nonchalantly tucks the remote into his pocket. Why, hello sir, is that Wii in your pants, or are you just happy to be here? The Virtual Console will bring gamers together and act as the leading laboratory for simple games.



1:28 pm - "The startup time before gameplay begins is growing longer and longer. These days I am busier and busier and ever. Even if I have to wait 30 seconds or 40 seconds or more for a game to load, often I get frustrated. Sometimes I just cannot wait. And now that I know I can instantly stop or start playing my DS by just opening or closing the top, I think I am spoiled. Maybe this has happened to you too? If seriees gamers find the delays frustrating, how can we ever expect the mass market to show more patience than we do. Unless we change we can never increase the game population."



1:30 pm - Audience chuckles as disgruntled gamers are flashed on the screen. "The Wii console will also help solve this problem ... [it will be] almost as fast as the television or telephone. One more hardware feature -- we've designed our machine to provide owners with a variety of services when it is turned off. Wii Connect 24: the Wii console can be constantly connected to the internet. This means that developers can push a new weapon or vehicle to you even while you sleep. Anytime the console is in standby, players may return to find that their friends have left a message or a gift."



1:32 pm - Networking software is included in the hardware. In other words, developers don't have to write code to utilize this. "What we are aiming for is a system that is new everyday." WiiSports ... this is a combination which will include tennis, golf, and baseball in one package. It will be available on launch day.



1:33 pm - "Today, there are people who play and people who do not. Wii will help destroy that wall between them. Anyone can instantly understand Wii. Everyday there is something new for everyone, eveywhere. This is our answer." The "playing = believing" slide has been shown for the -- what -- sixth time now? In repeating this phrase, Nintendo's driving home the point that the typical version of this aphorism ("seeing is believing") no longer applies to their console. This is a key message for the audience here to believe, because without that belief, gamers will compare  Nintendo's console to the Xbox 360 and PlayStation 3 on a purely graphical level. This console simply cannot hold its own on a purely graphical level. Nintendo knows that, so the company *must* insist that playing is believing.



1:34 pm - Back to Reggie: "We'd like nothing better than to invite you all up on stage to play. While we can do that for everyone, we can do that for one person ... We have three grand prize finalists. Mr. Miyamoto has randomly selected the winner ...



1:37 pm - Miyamoto: "The winner is ... Scott Dyer. [To Scott] May I ask you to be my partner in the next game?" He agrees, of course. It's Iwata and Reggie vs. Miyamoto and Scott in tennis. Miyamoto demonstrates how the remote is used for a variety of shots in tennis, from serve to lob to to smash. It looks fun and responsive.



1:38 pm - Team Miyamoto wins! Huzzah! Scott aces Iwata on the serve! Team Miyamoto wins again!



1:41 pm - The game will clearly take some practice to master, which is as it should be. Most impressive is that a clumsy return will send the ball wide of the court. In many tennis-type games, it's far too easy to keep the ball in bounds. Reggie: "Bottom line of every E3 is what's hot and what's not. What's hot is the next step ... What's hot is if it's disruptive ... We know that the future is right here. Wii and the DS represent that same thing: risk. Change is good. We were the disrupter 20 years ago ... Wii will come next. Playing is believing. Thank you all, we look forward to seeing you on our show floor tomorrow."



1:45 pm - Reggie's talking a big game about how the company doesn't run from risk, but runs to it. An obvious counterpoint jumps quickly to mind: Nintendo is a very conservative company. Though the company has taken some risks with DS and Wii hardware, its also meticulous about controlling hardware costs, managing contracts and quality control, and in general ensuring that the margins are there to make a console profitable. Nintendo supporters routinely brag about the comapny's ability to make money, even on the GameCube. Their ability to do this is directly reliant upon keeping investment (in hardware, in marketing) low relative to sales projections. That is the very definition of risk averse. To put it another way, these aren't bet-the-farm risks. Touchscreen aside, the DS is still a solid gaming handheld supported by a very standard ecosystem of software developers and a solid portfolio of original IP. The Wii strategy takes a small risk on the HCI (human-computer interface), but everything else is rather similar to any other console's strategy, sans insane spending.

Sony's taking more risks this generation. Blu-Ray's success is critical to multiple lines of business that keep Sony afloat. It's huge investment in complex technology that will make or break the company in the decade to come. That's risk. Even if the Wii were to end up in third place again (as several analysts we talked to yesterday predicted it would), Nintendo will still survive. If Sony were to fail to capture dominant marketshare this generation, the results would be catastrophic. That's risk, and we just wanted to set the record straight on it.

That's it for the Nintendo press conferece! Thank you all for joining us, and be sure to check out the Microsoft press conference, which we will be covering shortly.

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Engadget & Joystiq's live coverage of Nintendo's Wii E3 event