Here’s a blog post from our colleague Ben Deighton in London:

Robotic drone planes and night vision sniper rifles take their aim at traditional media in the latest installment of the Call of Duty series — Modern Warfare 2.

The game made about $310 million North America and the UK in its first day, dwarfing the up to $60 million that blockbuster movies gross on their opening.

But it’s not just in cash terms that games like Modern Warfare 2 are challenging the medium of film. Played on a wide screen TV in dazzling high definition, graphics have become so detailed and carefully rendered that they almost give players the sensation of being in a film themselves.

Like the first installment, players occupy a range of different characters, including a British special forces fighter and a U.S. soldier.

This means that the scenes range from assaulting an oil rig by submarine and attacking a base in the middle of a blizzard and escaping James Bond style on a snowmobile, to fighting through the oval office.

However the game subverts the largely historical message of the Call of Duty series, and instead paints a bleak future where players find themselves retaking the White House from Russian invaders and fighting pitched battles through U.S. suburban houses.

Publisher Activision even ended up having to give players the chance to opt out of a particularly gruesome scene where they are asked to mow down civilians in an airport in order to infiltrate a terrorist group.

However some scenes take the gaming experience to a whole new level, like the one where players find themselves on a space station watching a nuclear missile being launched into the atmosphere.

With Modern Warfare 2, Activision really has thrown down the gauntlet to other game makers. Let’s see how they respond.

Fresh on the heels of its $43 million financing round, social gaming company Playdom announced a pair of acquisitions Thursday in a move to expand its portfolio of games. It acquired Facebook game developer Green Patch and Trippert Labs, which develops games on Apple’s iPhone. Terms of the deal were not released.

Playdom Chief Executive John Pleasants said in a phone interview that while the company’s main goal is to develop its own titles, it will make acquisitions opportunistically. “We have ample cash to do deals on our own,” he said.

Social gaming companies are suddenly on investor’s radar screens. Earlier this week, Electronic Arts said it would pay $275 million in cash for Playfish, a Playdom rival, along with other consideration that could eventually lift the company’s valuation to $400 million. Social gaming companies earn money by selling virtual goods to players.

Pleasants, the former COO of EA, said the Playfish deal was a validation of what his company is doing. “It certainly validates the credibility of the space,” he said. “The valuation also was another statement of the value we can create.”

Playdom’s financing by a group of venture capital firms valued it at $260 million. Industry watchers say Zynga, the largest of the social gaming companies, could raise $1 billion to $1.2 billion in an initial public offering next year, if it decided to go that route.

Playdom, which has more than 28 million monthly active users and says it’s profitable, will have around 200 employees following the acquisitions.

Electronic Arts is launching its most venerable video game franchise, “Madden Football,” onto the hottest new gaming platform going, Apple’s iPhone and iPod touch.

The game, whose origins date back 20 years, has been a cash cow for EA over the years, and the company is now seeking to extend that popularity into the fast-growing smartphone market. EA showed a demo of the game at Apple’s media event on Wednesday.

“We’re really happy with the quality of the game, making it fun and easy to pick up and play and we think we’ve created the most authentic and realistic football experience in the market today,” said Adam Sussman, vice president of worldwide publishing for EA Mobile.

“We were even able to get Brett Favre on the Vikings,” he added, showing that the video game giant is still nimble enough to stay current on the future Hall of Fame quarterback’s latest address.

Sussman said winnowing “Madden’s” considerable complexity and richness into a compelling smartphone game was something of a challenge. The game features 32 teams, 2,000 players and 300 different plays and has been under development for around 10 months. It utilizes the iPhone’s touchscreeen controls as well as its accelerometer (for example, you shake the device to run the hurry-up offense).

Additional goodies such as roster updates will be made available via in-app purchasing in a later update.

The game is launching Wednesday in the App Store at a special price of $7.99, before bumping up to $9.99 Thursday evening. EA says it is market share leader on the iPhone, as measured by revenue, with an average price of more than $4 for its games. It expects to launch 40 iPhone games this fiscal year.

The long-anticipated price cut on Sony’s PlayStation 3 video game console might have come just in the nick of time, as industry sales continue to wilt in the heat of summer. Both game hardware and software sales have been flagging, but console price cuts typically spur game sales.

Sony took the PS3’s price to $299 from $399, and the company sounded bullish on its prospects for the holiday selling season.

“With this price move, we’re extremely confident,” said Jack Tretton, CEO of Sony Computer Entertainment America, in a interview. “I don’t think there’s anything more that we could realistically ask for in terms of putting us in a position to be successful this holiday, I really feel like everything’s lined up for us.”

Sony’s PS3 has languished in third place in U.S. home console sales, trailing Nintendo’s Wii and Microsoft’s Xbox 360, both of which carry lower price tags. While many analysts say the PS3 is the most  technologically advanced and powerful of the three systems, the $400 price tag in the depths of a recession was a tough sell. U.S. video game equipment and software sales fell 29 percent in July. Activision’s CEO even threatened to stop making games for the PS3, due to high costs and poor sales.

But Tretton said the home console cycle lasts for 10 years, making for a long race. “We’ve kind of kept out guard up and kept our powder dry and now we’re coming out with both fists swinging. We feel like we’ve weathered some significant competitive blows and now we’re great position to land a knock-out punch.”

“I think our competitors have had success in the case of Wii with the innovation and social aspect of the game play, but that seems to be wearing a little bit thin right now, and Microsoft seemingly pulled out all the stops last year, stripping down their machine and hitting that $199 price point on their base device.”

“If you follow this industry and follow where retail sales are generated it’s much like the football season, everything before holiday is pre-season and the numbers really don’t count. But when your get into the fall that’s when the majority of the sales are done, and we really wanted to time this announcement to take advantage of the fall selling season.”

Watch Microsoft’s Robbie Bach getting out of breath playing a wall-demolition game using Xbox’s new Natal technology, which works entirely on body gestures rather than a hand-held controller. (Click on the video and scroll onto 23:30)

Bach, head of entertainment and devices, demoed the new system at Microsoft’s annual financial analyst meeting in Redmond, Washington. There is still no date set for its commercial release.

The company hopes the new technology will vault it past Nintendo’s all-conquering Wii and rival Sony’s PlayStation.

The E3 video games conference in Los Angeles is in full swing now, and the major console makers and software developers have rolled out the celebrities, teased about cutting edge technologies and pleased hardcore fans with news about Mario and Halo, etc. Now it’s about convincing consumers and retailers that the games on display are going to be must-haves this year.

So we thought you’d like to see what everyone here sees. Here are a few of the games being played on the show floor, each showing off amazing graphics and realism.

God of War III, by Sony, due in 2010:

UFC 2009 Undisputed, by THQ Inc, debuted in May

Red Faction: Guerilla, by THQ Inc, was just released this week.

Human nature is a funny thing.

Here in Los Angeles, at the E3 video game conference, the makers of the ubiquitous Tetris celebrated 25 years of letting us conjoin falling bricks in one terribly addictive game, a longevity enjoyed by few in any industry. It has sold more than 125 million copies. Nice.

So what is one of the first questions asked of Alexey Pajitnov, the game’s Russian creator, at an E3 press conference? DUDE! DID YOU GET PAID?

Funny thing is, I interviewed Pajitnov, and after he explained how the rights to the game changed hands several times over the years — hey, he created it while working as an engineer for the Soviet Union — the first question I asked was: Dude, did you get paid?

His answer was cryptic, but you can see the smile between the lines:

“In 1996 the rights came back to me, and I am pretty fine with it.”

Check out this video, where he answers a similar question in front of the E3 crowd.

This week marks the kick off the video game industry’s biggest event - Electronic Entertainment Expo, better known as E3, which opens on Tuesday in Los Angeles. Usually this is where the best new consoles and multi-level games make their debuts with all the attendant excitement and drama.

But this year the beaten-up economy might have more of a starring role as we note in our preview here.  As the economy splutters along, video game sales are doing okay; they’re up 13 percent in the fiscal year to $28.7 billion, according to Hudson Square Research. However, to keep that going in the year ahead analysts suggest that price cuts on some of game consoles might be in order. Actually that would be just one game console: Sony’s Playstation 3, currently priced around $400. As Billy Pidgeon, analyst at Game Changer Research said:

The thing that would really boost the industry in this traditionally slow period would be a Sony price cut, That would really help right now.

This year’s event also hopes to return to its glory days by throwing open its doors to the public again after two years experimenting with an insiders-only approach.  The show, which once drew crowds of nearly 80,000, downsized to 5,000. But insiders are not so sure that worked. According to Yves Guillemot, chief executive of France’s Ubisoft Entertainment :

In the last two or three years it was almost a nonevent. We think it will be a major event — the show has to be big. We want to attract more and more talent from all the other industries (so) they can see what is happening now.

Keep an eye on:

• From Tonight Conan O’Brien tries to fill Leno’s boots. (NYTimes)
• Sony’s catalog music now available on eMusic (NY Times)
• DoJ sides with Cablevision in network DVR case (Reuters)

(Photo of Playstation 3 controller/Reuters)

Wednesday’s announcement that celebrated game designer Will Wright is parting company with Electronic Arts is the latest piece of tough news in what has been a difficult year for EA. Wright, who masterminded the “Sims” franchise along with the newer  “Spore”, is a certifiable legend who has been called the the “Albert Einstein of the gaming business.”

“Sims” and its related spinoffs have sold more than 100 million units over the years.

In February, EA posted weaker-than-expected results, and delayed the release of several games — including “Sims 3″ — causing it to forecast a loss for the fiscal year. The company is cutting 1,100 jobs even as it goes mano-a-mano with larger rival Activision Blizzard.

Cowen analyst Doug Creutz said in a research note he doesn’t expect Wright’s departure to have a near-term impact on EA’s financials: “However, his departure is likely to be a long-term negative as Wright’s games have been some of EA’s most profitable franchises, and Wright has been the leader in game design at EA’s Maxis studio. Wright has also been the most visible and respected talent at EA for many years.”

Wright will turn his focus to a company he founded a few years back, the Stupid Fun Club. EA and Wright will hold an equal stake in the venture, an “entertainment think tank” developing a whole range of content.

“The venture with EA appears to give Wright a much more significant economic stake in his future game designs, as well as more creative control,” Creutz wrote.

(Photo: Reuters)

Forget the bells and whistles, realistic graphics, complex story lines and cinematic soundtracks. When it comes to video games, solitaire still rules.

According to Nielsen’s fourth-quarter “State of the Video Gamer” report, the most played PC video game in the United States is solitaire, the free, easily accessible and familiar time-waster adored by cubicle dwellers. The game, which is pre-installed on most Windows PCs, had more than 17 million players in December. Solitaire players aged 25 to 54 are apt to play it five times a week for about 30 minutes at a stretch

Females older than 25 made up the largest chunk of PC gamers in December, accounting for 46.2 percent of all players, Nielsen said.

On the console side, Sony’s PlayStation 2 — with the largest installed base — still leads other consoles in terms of total usage, although its numbers are trending downward. At the same time, more hardcore users, who favor Microsoft’s Xbox and Sony’s PlayStation 3, are apparently far more wrapped up in their game playing. They are less likely to watch television in prime time than users of Nintendo’s Wii or the PlayStation 2, Nielsen said.

(Photo: Reuters)