Stories of Xbox Live users seeing their accounts hacked and used to make unauthorized purchases have continued to come in at a slow trickle since they were first widely reported last October. But one user has taken to the Internet with a highly personal account of her hacking experience, and what she says was, initially, an almost total lack of help from Microsoft on the matter.

(Msnbc.com is a joint venture of Microsoft and NBC.)

Susan Taylor's tale, as told on the HackOnXbox Tumblr account, describes how she logged on to her e-mail earlier this week to find over $200 worth of Xbox Live's virtual "Microsoft points" currency charged to her linked PayPal account, and then transferred to a separate dummy account.

On discovering the problem, Taylor contacted Microsoft support immediately and was told her account had been blocked to prevent further fraud while they investigated. So you can imagine Taylor's surprise when, as she tells it, over $100 more was taken from the supposedly blocked account for the same fraudulent purpose the very next day.

When Taylor called up Microsoft support yet again, she was told simply that the fraud department was "unable to block your account." She was also told that she should change her password, despite the fact that her password had been changed and she was unable to access her account through the Xbox.com web interface, she said.

"In short, I think [Microsoft's fraud handling process] is a shambles," Taylor told msnbc.com's In-Game in an online interview. It's an opinion borne out by her own experience, but also by those of dozens of people who've e-mailed her with similar tales since her story started gaining widespread attention around the Internet, she says.

"People are getting lost in the system, calls are being promised but never followed through, accounts that should've been blocked but are left open for attack, etc." she said. "The left hand doesn't know what the right hand is doing at Microsoft, basically."

For its part, Microsoft says that there "has been no breach to the security of our Xbox Live service" and says affected accounts merely  "appear to have been victims of malicious scams" that expose their login information to third parties.

But Taylor is adamant she hasn't done anything to make her password vulnerable, and that, in any case, Microsoft could be doing more to ensure the safety of account passwords in general.

"I believe that Microsoft should force people to change their passwords every six months," she said. "As much as that is a hassle, it may be the only way to ensure that if someone does get hold of your account that you may have a chance to avoid it being abused."

The company should also streamline the process for fraud reporting, Taylor suggested, rather than letting reports get lost in a mess of phone transfers.

"The amount of times I was told 'we'll be passing it on to [another department]' was unreal and ended up becoming a bit of a joke," she said. "If I want to report fraud I should go directly to someone in the fraud department. Not to a customer service rep who is unable to help me."

Microsoft says it's "aware that a handful of customers have experienced problems getting their accounts restored once they've reported an issue" and that its "working directly with those customers to restore their accounts as soon as possible and are reviewing our processes to ensure a positive customer support experience."

But until that process is complete, Taylor writes on her Tumblr that she won't be so quick to trust her financial information to an online service anytime soon.

"I think it’s fair to say that many people would look at Microsoft as a reliable company and absolutely trust them with their bank details," she wrote. "What makes them any different than Blizzard or Sony? If this level of trust makes me a fool, than so be it, brand me as one. Just know that you are branding a hell of a lot of people with that marker than you probably know and we are not the ones to blame here."

While Taylor and Microsoft both confirm that her Xbox Live account has been reinstated and her money refunded since her story was first posted online, Taylor says she worries she got special treatment solely because of her story's prominence.

"I certainly can't say I'm unhappy that a refund is on it's way and that my account should be back to normal soon. What I am unhappy about is the unfair treatment, albeit positive treatment, that I am receiving because I decided to set out and get their attention and make sure they heard me," she said.

Taylor also said she thinks Microsoft is underselling the severity of the problem, suggesting that "hundreds if not thousands" of accounts have become victims of similar hacks.

"Without a doubt Microsoft have been downplaying the problem. They are leaning on low percentages of users being affected as making it seem like less of an issue," she said. "I would love for more people to come forward and speak out. There is only so many gamers that Microsoft can ignore after all!"

Related stories:

• Steam game service hacked, credit card theft investigated
• Spanish police arrest 3 in PlayStation Network hacks
• Sony PSN password page shut down due to flaw

Kyle Orland has written hundreds of thousands of words about gaming since he started a Mario fan site at the age of 14. You can follow him on Twitter or at his personal website, KyleOrland.com.

Sony

Sony's PlayStation Vita portable isn't setting retailers on fire in its native Japan, as its second full week on store shelves continued a sales decline that started after a relatively successful opening weekend.

Sony sold an estimated 42,000 Vitas in Japan during the week ended January 1, according to tracking firm Media Create (as reported by Andriasang). That's down from 72,000 sales the week before and from a strong 320,000 units sold on its launch weekend in mid-December.

Of course, some drop of in sales should be expected after an initial wave of early adopters eager to scoop up the system as early as possible. And sales during the week following Christmas can hardly be expected to match those in the heavily trafficked run-up to the holiday.

Still, the absolute level of Vita sales might be a little worrisome to Sony, especially if it lasts more than a single week. While Nintendo's competing 3DS also saw a quick drop off in sales after its Japanese launch in March, it was still selling over 96,000 units at this point in its lifecycle, and that was during a traditionally quiet time for game sales.

While there's still plenty of time for Sony to turn its sales numbers around, it might take some drastic action to do so. The 3DS' moribund sales didn't really change until a massive price cut in July. Nintendo's system is now sitting pretty as the top selling console in Japan, pushing through nearly 200,000 units in the last week of 2011.

Sony probably shouldn't even consider a similar price drop unless the trend of dropping sales continues well past a couple of weeks, of course. But if things don't turn around at some point, Sony might find its system demoted to also-ran status in the public and industry mind before it can even fully get off the ground.

The Vita is set to launch in North America and Europe on Feb. 22, starting at $250 in the U.S.

Related stories:

• Vita sales drop sharply in Japan
• Vita beats 3DS in battery life test
  
• PlayStation Vita portable starts strong in Japan

Kyle Orland has written hundreds of thousands of words about gaming since he started a Mario fan site at the age of 14. You can follow him on Twitter or at his personal website, KyleOrland.com.

The controversial Stop Online Piracy Act (SOPA) currently being considered by the U.S. Congress continues to cause rifts among members of the video game industry, with two major game publishers publicly offering very different takes on the law.

"Gears of War" and "Infinity Blade" publisher Epic Games addressed the issue directly in a post on its official forums late last night, saying it couldn't support SOPA as currently written. While the company said it "supports efforts that would stop overseas websites profiting from pirating our games," it also stressed that such efforts must be undertaken "in a way that's compatible with freedom of speech and due process of law."

SOPA has come under fire from many corners for the sweeping abilities it would give copyright holders and the U.S. government to effectively shut down access to a large range of web sites immediately and without review. Under the law, affected site operators would then have the burden of proving they do not host pirated material before the block would be released.

Epic's public withdrawal of support for the bill is a bit thorny, though, because it's a member of the Entertainment Software Association, an industry trade group that has been vocal in its support for SOPA (though the group did recently acknowledge it was "mindful of concerns raised about a negative impact on innovation" by the bill).

Addressing this conflict, Epic only confirmed that "we are members of the Entertainment Software Association (ESA), a trade organization that is working with legislators to refine the bill."

Japanese "Resident Evil" and "Street Fighter" publisher Capcom, meanwhile, was willing to let the ESA take the lead on on the legislative issue, telling Digital Trends simply that "the ESA represents us on these matters."

Other game publishers have been cautious with regards to specific support for SOPA. Electronic Arts told msnbc.com's In-Game that despite its signature on a general letter of support for anti-piracy legislation in September, the company "hadn't planned on issuing an opinion either way" regarding SOPA specifically.

Nintendo and Sony Computer Entertainment, which also signed the September letter of support, have yet to publicly comment on their specific positions on SOPA, and neither have the dozens of other ESA members the group says it represents on the issue. That issue seems unlikely to last, however, as public scrutiny of SOPA and its supporters continues to grow among gamers and industry watchers.

• Gaming world conflicted on piracy act support
• 'Crysis 2' tops year's most pirated games
• 'Witcher 2' publisher threatens pirates while eschewing DRM
• Rapping hacker raises legal funds to fight Sony

Kyle Orland has written hundreds of thousands of words about gaming since he started a Mario fan site at the age of 14. You can follow him on Twitter or at his personal website, KyleOrland.com.

US Patent Office

An image from Microsoft's patent filing shows a mock-up of a DVR menu on a game console.

While Microsoft's Xbox 360 can now play live TV from the likes of Comcast and Verizon, and on-demand streaming video from a variety of partners, the system doesn't include include another function that's become a staple of TV viewing in recent years — digital video recording.

That might be set to change soon, though, as a new patent granted to Microsoft late last month by the U.S. Patent and Trademark Office details "an integrated gaming and media experience ... including recording of content on a gaming console."

(Msnbc.com is a joint venture of Microsoft and NBC Universal.)

The patent goes on to explain a "DVR application" integrated into the console menu that can record televised content while the user is playing games or even when the system is otherwise off. It might not be limited to TV shows either — the patent mentions the ability to potentially record "gaming experience (whether local or online), music, DVDs, and so on."

That last bit is kind of interesting, as recording commercial DVDs currently runs afoul of the Digital Millenium Copyright Act, since it breaks the DVD's digital rights management (copying personal videos to the hard drive should be legally OK, though).

To be clear, the existence of a patent doesn't necessarily mean Microsoft will be unleashing a DVR feature any time soon — the company filed the patent idea way back in 2007, after all. The Xbox 360 isn't mentioned specifically in the patent, either, so this DVR feature might be held in reserve for Microsoft's next console, which is still shrouded in mystery.

Still, a DVR function seems like a logical use for those massive hard drives included in some of the higher-end Xbox 360s. It also seems like a great way to differentiate Microsoft's console from other competitors in the ongoing battle to become the one default set-top box in living rooms around the world.

Related stories:

• Game consoles increasingly used for streaming video
• HBO, Bravo, Comcast: Tons of TV coming to Xbox 360
• Xbox wants to be the one player to rule them all

Kyle Orland has written hundreds of thousands of words about gaming since he started a Mario fan site at the age of 14. You can follow him on Twitter or at his personal website, KyleOrland.com.

Microsoft

A scene from the upcoming "Microsoft Flight" shows the game's gorgeous scenery.

Microsoft's long dormant "Flight Simulator" series comes back to the PC this spring as the simply titled "Flight," and players won't have to shell out a penny to fly the digital skies.

While Microsoft has been talking about "Flight" and showing the game off through impressive demo videos since August 2010, the company announced today that players would be able to fly around Hawaii's Big Island for free after downloading the game. Those that connect with a free Games for Windows Live account will also get additional free content including planes, missions, Achievements and an Online Pilot Profile, the company said.

Past that, players will be able to purchase additional aircraft, regions and customization options a la carte through an in-game marketplace, paying only for the parts of the game they're interested in.

Microsoft says it's "approaching the virtual flight genre from the ground up" with "Flight" and while the development team is promising to "retain the full fidelity simulation longtime fans have come to expect," the new title also promises a "simplicity" that will "focus on the universal appeal of the experience of Flight."

Microsoft's Flight Simulator series launched in 1982 and served as a powerful graphical demonstration for early IBM-compatible PCs. The series has since found a devoted following through a dozen total releases, most recently 2006's "Microsoft Flight Simulator X."

While the internal Microsoft team that developed those titles, ACES, was dissolved in 2009, many ex-ACES team members have reportedly come back to work on the new title.

Related stories:

• Right to bear arms? Xbox Live drops avatar guns
• Microsoft responds to Xbox profile problems
• Kinect gets a makeover for PCs

Kyle Orland has written hundreds of thousands of words about gaming since he started a Mario fan site at the age of 14. You can follow him on Twitter or at his personal website, KyleOrland.com.

There's been some confusion recently over the specific position taken by some game publishers in regards to the controversial, pending Stop Online Piracy Act (SOPA), which would give the U.S. government broad powers to prevent access to sites accused of hosting pirated content.

Publishers including Nintendo, Sony Computer Entertainment America and Electronic Arts were signatories to a September letter urging Congress to "enact legislation which targets those who abuse the Internet ecosystem and reap illegal profits by stealing the intellectual property (IP) of America's innovative and creative industries."

When the Stop Online Piracy Act was introduced in October, however, those publishers did not appear on a complete list of the bill's specific supporters. A number of news sites noted the discrepancy and wrote that the publishers had "pulled" their support of the bill. 

But that's not the case for Electronic Arts, spokesperson Jeff Brown clarified in an e-mail to msnbc.com's In-Game. While Brown admitted that EA joined 400 other companies in "urging consideration of legislative solutions" to the piracy problem, the company has "NEVER expressed support for any specific proposal, and, obviously, never withdrew support," he said.

"We care deeply what consumers think, however, in this case we hadn't planned on issuing an opinion either way," he added. "Going forward, we'll balance our concern for developer’s rights with the needs of our consumers."

That might be a smart move, considering the reaction SOPA has been getting among many gamers and heavy Internet users, who worry about the law's potential effects on access to some of their favorite websites. Those users haven't been afraid to exercise their power as consumers, either — domain registrar Go Daddy recently pulled its support for the bill after a wave of sites transferred their domains in protest.

Meanwhile, a member of hacking collective Anonymous has threatened to "destroy" Sony over the company's supposed SOPA support.

There's another wrinkle in the game industry's position on SOPA, however. The Entertainment Software Association, an umbrella group that represents most major publishers — including EA, Nintendo and Sony — does officially support SOPA as a way to hamper "Rogue websites — those singularly devoted to profiting from their blatant illegal piracy" from "restrict[ing] demand for legitimate video game products and services, thereby costing jobs," as the group put it in a prepared statement.

Still, the group says its aware of the backlash that SOPA has generated in many corners. "We are mindful of concerns raised about a negative impact on innovation," the group said. "We look forward to working with the House and Senate, and all interested parties, to find the right balance and define useful remedies to combat willful wrongdoers that do not impede lawful product and business model innovation."

Brown said that EA, like other ESA members, "considers [the group] the primary policy arm of the game industry," but didn't comment directly on the ESA's support for the bill.

Nintendo and SCEA have yet to respond to a request for clarification on their positions, but we will update if and when we hear back.

Related stories:

• 'Crysis 2' tops year's most pirated games
• 'Witcher 2' publisher threatens pirates while eschewing DRM
• Rapping hacker raises legal funds to fight Sony

Kyle Orland has written hundreds of thousands of words about gaming since he started a Mario fan site at the age of 14. You can follow him on Twitter or at his personal website, KyleOrland.com.

Sam Spratt

The mobile gaming phenomenon that is Angry Birds showed no signs of slowing down over the holidays, with Rovio’s Ville Heijari telling the Wall Street Journal's AllThingsD blog the series racked up 6.5 million downloads on Christmas Day alone.

The number, which includes paid and free downloads of the original "Angry Birds" as well as sequels "Angry Birds Rio" and "Angry Birds Seasons," is well above the 1 million download a day average Rovio reported in June, but just a drop in the bucket compared to over 500 million total downloads for the series since the first game was released just over two years ago.

Though Rovio made dozens of mobile games before "Angry Birds," the 55-person Finnish company is now supported almost wholly by the one franchise's massive success. Besides direct sales and in-game ads, Rovio rakes in cash via licensed products ranging from t-shirts and cookbooks to upcoming parks and movies — so much cash, in fact, that the company is reportedly eyeing a public stock offering in the near future.

AllThingsD notes the 6.5 million Christmas downloads matches almost exactly the number of smartphones activated that day, causing us to wonder how many of those downloaders are simply getting the game again for a newly upgraded phone. In any case, the series has become a success story practically unparalleled in the video game world, and one the company says it plans to follow up with new series releases in 2012.

Related stories:

• Angry Birds turns 2, players get the presents
• 400 billion Angry Birds shot ... at pigs
• 'Angry Birds' downloaded a million times a day

Kyle Orland has written hundreds of thousands of words about gaming since he started a Mario fan site at the age of 14. You can follow him on Twitter or at his personal website, KyleOrland.com. Sam Spratt — the guy who made the illustration above — on the other hand, is mostly all about Facebook.

EA

EA's ultra-detailed first-person shooter "Crysis 2" surpassed higher profile titles like "Call of Duty: Modern Warfare 3" and "Battlefield 3" to become the most pirated game of 2011, according to tracking data collected by piracy news site TorrentFreak.

An estimated 3.9 million people illegally downloaded the PC version of the "Crysis 2," according to the TorrentFreak's analysis of public BitTorrent trackers and other sources. While a full version of the game actually leaked onto pirate sites about a month ahead of its release, illegal downloads didn't really pick up until the game was released in March, the site said.

Behind "Modern Warfare 3" and "Battlefield 3," soccer simulation "FIFA 12" and perspective-bending first-person puzzler "Portal 2" also made the top 5 for PC BitTorrent downloads, each surpassing an estimated 3 million illegal downloads for the year by a good margin.

Nintendo's 3D platform game "Super Mario Galaxy 2" led TorrentFreak's list of most-pirated Wii games for the second year in a row, while Epic Games' "Gears of War 3" led for Xbox 360 piracy. Both titles ran well behind their pirated PC brethren in popularity, however, with around a million illegal downloads each, possibly owing to the additional difficulties associated with getting pirated games to run on game consoles.

TorrentFreak didn't publicize download numbers for PlayStation 3 games, but did say the well-locked-down system got "considerably less downloads."

While game publishers are quick to publicly cite each of these illegal downloads as a "lost sale," many file sharing advocates insist that pirates would not be in the market for legal versions of these games regardless of the price. Advocates also note that many pirates use illegal downloads to sample a title when no demo is available, or to get around onerous digital rights management requirements in legal versions of the games.

Related stories:

• 'Witcher 2' publisher threatens pirates while eschewing DRM
• Rapping hacker raises legal funds to fight Sony
• Pirates: Leave our PC game alone!

Kyle Orland has written hundreds of thousands of words about gaming since he started a Mario fan site at the age of 14. You can follow him on Twitter or at his personal website, KyleOrland.com.

Sen. Coburn

Sen. Tom Coburn (R-OK) singled out just over $100,000 in funding for a video game museum as part of his list of wasteful government spending.

While politicians routinely cite video games as a contributing cause for everything from childhood obesity and lower test scores to youth violence, Sen. Tom Coburn (R-OK) recently labeled a video game museum as something else — a waste of taxpayer funds.

At No. 9 on Sen. Coburn's "Wastebook 2011" list of 100 federal programs he sees as frivolous is over $113,000 in funding for the International Center for the History of Electronic Games (ICHEG), an outgrowth of the Strong Museum of Play in Rochester, N.Y.

The collection, started just last year, already contains over 35,000 items, including games as well as magazines, papers and artifacts outlining the history of the young but powerful medium. The Center has received donations of personal notes and mementos from important game makers such as SimCity creator Will Wright and Ralph Baer, creator of the first home game console, as well as companies like Microsoft.

Aside from offering exhibits for the public and researchers, ICHEG also makes efforts to preserve its unique items — including aging computer equipment and decaying magnetic storage — for future generations, an effort the cited federal grant is meant to aid.

Coburn doesn't lay out specifically why federal spending on such work is wasteful, aside from noting that the museum also receives funds from $13 in admission charged to for adults. The underlying assumption seems to be the video games are unimportant trifles that the government has no interest in helping preserve for history.

But video games are increasingly becoming an important part of our pop culture heritage, at least as much as Arthur Fonzarelli's jacket or Dorothy's ruby slippers, both of which enjoy prominent places at the federally funded Smithsonian Museum for American History. The Smithsonian itself, in fact, will be noting gaming's cultural impact next year with a Museum of American Art exhibit highlighting the medium's most striking visuals.

Another branch of the federal government, the U.S. Supreme Court, also noted the cultural legitimacy of video games in a 7-2 decision earlier this year, granting the medium the full protection of the First Amendment of the Constitution. As the Court wrote in that decision:

Like the protected books, plays, and movies that preceded them, video games communicate ideas — and even social messages — through many familiar literary devices (such as characters, dialogue, plot, and music) and through features distinctive to the medium (such as the player's interaction with the virtual world).

And as ICHEG argues in a recent press release:

Games charm, captivate and amaze us, from the awe-inspiring wonder of "Elder Scrolls V: Skyrim" to the whimsical fun of "Angry Birds" to the subtlety of "The Sims." Video games are influencing society just as much as novels did 200 years ago or movies did 100 years ago.

It's not as if the government is singling out video games for unique support, either. The Institute of Museum and Library Services which authorized ICHEG's grant provides roughly $32 million annually to help some of the country's 17,500 museums with needed support. It should be noted that the Institute's entire budget amounts to a cost of roughly 10 cents a year for every American citizen, while the ICHEG funding specifically demands less than a tenth of a penny.

While there are legitimate arguments to be made about spending priorities in this country, singling out a relatively small grant intended to preserve our gaming history as a key part of our national heritage seems a bit misguided.

Related stories:

• 1st Amendment beats ban in video game battle
• Fight over violent video games far from over
• Movie makers, comic book authors rally around video games as Supreme Court hearing looms

Kyle Orland has written hundreds of thousands of words about gaming since he started a Mario fan site at the age of 14. You can follow him on Twitter or at his personal website, KyleOrland.com.

Sony

After a Japanese launch weekend that saw nearly 325,000 people buy Sony's new PlayStation Vita portable game console, the system's sales dropped significantly in its first full week on store shelves.

Sony sold just over 72,000 Vita units to Japanese consumers in the week ending Dec. 25, according to tracking firm Media Create.

Such a drop in sales isn't unheard of for a newly launched system, as the initial crowd of eager early adopters often gives way to a smaller but steadier audience for day-to-day sales. But the extremely steep 78 percent drop is historically large for the period immediately following a Japanese system launch. The Nintendo 3DS, by contrast, fell off by only 44 percent in the week after its launch weekend peak of nearly 375,000 sales this March.

Nintendo's system, meanwhile, saw its strongest week of Japanese sales yet in the run up to Christmas, selling over 480,000 units to consumers in the country and contributing to over 4 million total Japanese sales since its debut.

The 3DS' sales fortunes began their turnaround after an abrupt July price drop lowered it to the equivalent of about $190 in Japan. But earlier this year, Sony said the Vita, which retails for the equivalent of $317 in Japan, didn't need to lower its price in light of the competition from the 3DS.

“We have a very good product at a very affordable price,” Sony Consumer & Products Services President Kaz Hirai told Bloomberg in August. “There’s no need to lower the price just because somebody else that happens to be in the video game industry decided they were going to.”

As Sony looks towards a February European and North American launch for the Vita, it can only hope consumers will begin to see the value of its higher-priced hardware in greater numbers.

Related stories:

• Vita beats 3DS in battery life test
  
• PlayStation Vita portable starts strong in Japan
• Sony will launch PlayStation Vita in Japan with 26 games

Kyle Orland has written hundreds of thousands of words about gaming since he started a Mario fan site at the age of 14. You can follow him on Twitter or at his personal website, KyleOrland.com.

GameStop

A GameStop ad highlight's the retailers acceptance of iOS device trade-ins, which the company says are doing better than expected.

Though its known primarily as a place to buy and sell new and used video games and consoles, major retailer GameStop says its been seeing better-than-expected results from a recent program accepting trade-ins for Apple's iOS devices.

While GameStop didn't disclose specific numbers for the trade-in program, which started in September, president Tony Bartel said in a statement that “the velocity of this trade program has exceeded our expectations," and that the company expected "strong post-holiday traffic as customers trade in older models that were replaced by gifts.”

GameStop offers up to $180 in cash or store credit for the most recent premium iPod Touch, $300 for similarly new iPhones and $400 for iPads turned in at over 6,000 locations in 17 countries. Before you get too excited about your unit's trade-in value, though, note that these top-of-the-line numbers drop quickly for older models or those with less storage capacity.

GameStop isn't the only option to get rid of your old iOS device, of course. Best Buy, Amazon and even Apple itself offer some kind of monetary exchange for your used products. You might be able to cash in even more if you're willing to brave the online jungles of Craigslist or eBay, as well.

Related stories:

• iPhone 4S gets dual-core gaming
• Apple doesn't want you to play this smartphone game
• 10 great games for your new (or old) iPad

Kyle Orland has written hundreds of thousands of words about gaming since he started a Mario fan site at the age of 14. You can follow him on Twitter or at his personal website, KyleOrland.com.

Wikipedia

The U.S. Supreme Court conferred both legal protections and artistic credibility on the growing game industry this year, marking our largest game-related story of the year.

The past year has offered plenty of major stories to keep gamers chattering. Here's what we thought were the most important stories to hit the industry over the past 12 months.

1. Supreme court gives games First Amendment protection
In the seemingly ceaseless battle over whether video games are "art" or merely "entertainment," the art side got a big boost this year from the federal government, of all places. In a landmark 7-2 decision handed down in June, the U.S. Supreme Court ruled that video games are protected speech deserving of full protection by the First Amendment of the Constitution. The ruling struck down a California law that would have limited sales of ultra-violent games to minors, and ensured that the self-enforcement regime of the Entertainment Software Ratings Board will remain the only retail protection for such sales. More than that, though, the decision helped legitimize a young-and-growing medium as a form of expression on par with literature, movies and music as far as the law of the land is concerned.

2. PSN suffers intrusion, extended outage
What started as a seemingly routine temporary outage for Sony's online gaming network was soon revealed to be a major breach of user data that potentially put millions of credit cards at risk. As the outage stretched out over weeks, Sony got hit with lawsuits and congressional subpoenas as it struggled to beef up its security and provide protection to its users. Sony offered a bevy of freebies to its users when the service finally came back after nearly a month, but the breach in trust is likely to make many Internet users reluctant to give their credit card information out online quite so readily.

3. 3DS fails to meet sales expectations, drops price quickly
While Nintendo's glasses-free, stereoscopic 3-D portable saw healthy first day sales, the new system's retail performance quickly bottomed out as the novelty of the 3-D gave way to a lackluster launch lineup. Worldwide sales continued to languish until Nintendo suddenly lowered the price from $250 to $170, just four months after the March launch. Not only was it the quickest and most drastic price cut in the company's history, the company simultaneously offered 20 free downloadable classic games to sweeten the deal. The move seems to have worked somewhat. Sales have slowly rebounded going into the holiday season, thank in part to high-profile titles like "Super Mario 3D Land" and "Mario Kart 7."

4. Nintendo unveils the Wii U
All eyes were on Nintendo at this year's E3 conference as the company prepared to unveil the follow-up to its best-selling Wii, and though vague details leaked out before the show, many gamers weren't prepared for the system's radical new design. Being built around a massive controller sporting a six-inch touch screen, as well as an array of buttons, joysticks and an accelerometer, the Wii U seems obviously influenced by Apple's iPad. Yet the handheld controller won't work when taken away from the TV-connected base console, making it less than useful as a true tablet computer. Despite the odd design, demos of hybrid, two-screen games like the "Metroid"-inspired "Battle Mii" and the rhythmic "Shield Pose" have convinced some skeptics of the system's potential.

5. PlayStation Vita goes from announcement to Japanese launch in under a year
The year had barely begun when Sony first showed off its long-expected PlayStation Portable follow-up, then code-named the Next Generation Portable, sporting an everything-and-the-kitchen-sink array of features. By E3, the system had a new name — PlayStation Vita — and a price point starting at $250 (without optional 3G functionality). Earlier this month, the new portable launched in Japan to respectable sales numbers, though associated software sales were surprisingly less robust. With European and North American launches set for February, the rest of the world will see Sony's next major console soon enough.

6. Japanese earthquake shakes game industry
Aside from being a humanitarian disaster, the massive earthquake and tsunami that hit Japan in March caused major disruption for the country's gigantic game industry. Companies scrambled to delay and cancel games that featured apocalyptic themes that could upset victims, while damaged facilities and electricity rationing led to further delays. But the disaster also gave game companies a chance to show off their civic responsibility by raising substantial sums for philanthropic aid to help those hurt the most by the disaster.

7. Nintendo faces financial hardship
After decades of consistent profits, Nintendo's announcement that this year would likely mark its first ever fiscal loss came as a bit of a shock to industry watchers. The news was especially shocking given that the company had been riding high on record sales and profit from the Wii just two years back. Whether the financial troubles are a small blip caused by an awkward transition between console generations or a permanent transition caused by the rise of mobile phone and tablet gaming remains to be seen, but either way, it was enough to get Nintendo executives to slash their salaries and offer profuse apologies to shareholders.

8. Microsoft unleashes new, video-fueled Xbox dashboard
Video services like Netflix and Hulu Plus have long played a key role in the success of modern home consoles, but Microsoft raised the prominence of its video on demand offerings this year, rolling out a new Xbox 360 dashboard featuring video options from partners ranging from Verizon and Comcast to YouTube, Bravo and Syfy. Microsoft's video options may not have many people throwing out their cable boxes just yet, but its yet another sign that video games are no longer the exclusive focus of home game consoles.

(Msnbc.com is a joint venture of Microsoft and NBC Universal.)

9. Zynga goes public
After years at the top of the hot social gaming market and months of speculation and planning, Zynga finally made its first public offering of stock earlier this month. While the initial offering price was well below what many market watchers had expected a few months before, and despite that price dipping even further as trading went on, Zynga still raised over $1 billion in cash during the sale, money it will likely use to help cement its position as a major player in the industry, whether traditional game publishers like it or not.

10. Miyamoto "retires" (but not really)
If you want to see how important a single man can be to the perceived prospects of a company, look no further that Nintendo and its creative head Shigeru Miyamoto. A Wired report quoted the long-serving Mario and Zelda creator as wanting to retire from his executive position in order to focus on more hands-on development work on smaller games. By the time Miyamoto clarified his meaning later in the week, stating emphatically that his role at the company was not changing, Nintendo's stock had already dipped 2 percent and the entire game industry contemplated seriously, perhaps for the first time, the prospect of a world without its most celebrated game creator. 

Kyle Orland has written hundreds of thousands of words about gaming since he started a Mario fan site at the age of 14. You can follow him on Twitter or at his personal website, KyleOrland.com.