Video Gaming Blitz: What Launches Are in Store for the Holidays?

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tdp2664 InvestorPlace Retail video game sales in the United States totaled just above $707 million in July, the industry’s single-worst month of sales since October 2006. That’s a 26% year-on-year fall. Investors keen on the games industry should do some soul searching going into the back half of 2011. The business is in transition. Much like the movie industry, digital distribution and evolving technology are changing the games business, and old figureheads like game machine makers Microsoft ( NASDAQ : MSFT ), Sony (NYSE: SNE ) and Nintendo (PINK: NTDOY ) are jostling uncomfortably with new darlings in the social and mobile game space like Farmville creators Rovio. Those aforementioned industry veterans aren’t quite ready to introduce the next generation of major machines to compete with Facebook and Apple ‘s ( NASDAQ : AAPL ) iPad; There’s no PlayStation 4, Xbox 720, or even the announced WiiU ready to release in time for Christmas. So what are those companies preparing for the holiday season? And will they fare better during a prime-spending season than they have during the summer? Here’s what they’re offering: Microsoft The Xbox 360 continues to outperform its competitors in the U.S., thanks in no small part to the popularity of the Kinect — the hands-free, camera-based motion controller Microsoft released last fall. Of the 6 million Xbox 360 consoles the company sold between November 2010 and July 2011, 3 million were in the $399 and $299 packages bundled with Kinect. Outside a few promising titles due in September and beyond — Disney Kinect Adventures , Kinect Star Wars , Gears of War 3 and the Halo Anniversary remake — Microsoft doesn’t have a real attention-grabbing product lined up for the holiday. What it does have is a promising strategy to grow the Xbox brand beyond the living room. In a Tuesday post on the official Windows Phone blog, Microsoft announced the array of Xbox Live games and services coming to Windows Phones this fall. If anything can bolster Microsoft and Nokia ‘s (NYSE: NOK ) new smartphone business, it's a robust Xbox experience on the platform. It announced 14 new games for the service — not exactly an App Store-killing number, but a promising start and a reassurance to investors that Microsoft’s profitable entertainment division is evolving.