Can you tell what game this mother, pictured below, sitting next to us at my son’s track meet is playing? My wife smiled, knowing instantly what picture I was taking.

Not a word find, or crossword puzzle but Sudoku. Casual gaming has gone mainstream when you see sports moms playing it — on paper — during a track meet. Not playing it via Brain Age on the DS, although I’ve heard that title mentioned a couple times recently in unexpected places offline.

This week at E3 the talk seems to have been how underwhelming the Sony PS3 at $499/$599. The strange spinning of the PS3 prices by Sony execs (”it’s too cheap?”) and how Microsoft and Nintendo could be the one-two punch in the next round of game systems. I think what the Xbox 360 has going with its Live Marketplace is a huge advantage, especially if they make their Live service free when the PS3 comes out. That was the one part of Sony’s similar marketplace/Live connection where they have an edge against Microsoft in adoption. You have to make the Live part of the games free. People spend $60 on a game it’s too much to ask them to spend another $50 a year to be able to enjoy the online part of the games.

Nintendo isn’t going to play the ‘we have better hardware than you check out the cool HD stuff on our Wii’ games, they are going to do what they’ve always done better than both Microsoft and Sony: create fun games. That tennis game that was demoed looks seriously fun as well as a decent workout. Sort of reminded me of what the Xavix promised to deliver, but never really got any of that critical third party support. No game system can go it alone.

Speaking of games, I noticed in the brochure for the Toshiba HD player that they mentioned HD games. Has anybody signed up to make games to run on these HD players? That could be a whole other platform, bust or not, to consider going forward.

Speculation abounds that Nintendo will release the Wii for around $200, roughly half the price of the real Xbox 360 package (the premium bundle, forget about the core) and one third the price of the real Sony PS3 package ($599 USD).

I think Sony is going to have to rethink the pricing and get their machine priced much lower when it is released, or very soon thereafter. As I pointed out in a previous entry, the price won’t matter at launch to the hardcore early adopter gamers. Remember, people were paying over $1,000 on eBay for Xbox 360 when it launched.

However, if history is any guide, the second, third and beyond generations of non fanatical gamers won’t pay more than $500 for a game system. 3DO and Neo Geo proved that 10 years ago. The economics haven’t really changed. Get the system under $250 at least for mass market appeal.

Even the 360 — which is fast becoming my favorite gaming console thanks to Xbox Live Arcade — is too expensive but they could land a serious body blow to Sony by reducing the price in November. The core system should be $199 anyway, if it’s even sold at all. $299 for the premium with a game packed in would be a great price, or $249 without a game, thus getting them to the $250 price point.

This has been an exciting week for video games and I’m still not done pouring through the massive amount of E3 coverage. In year’s past I would have had to wait for the next issue of a gaming magazine to get the coverage, but online has changed all that, including videos, interviews and much more. I’m looking more excitedly to the Wii then I was before E3. As for PS3? Given a choice think I’d rather spend the money on a UMPC. If we ever see one around $599, that is.

Update 12:13pm PST: Check out this cool Super Mario Galaxies video from E3:

• XBox sweetens the hardware deal for the holidays
• PS2 outsells Xbox 360, Wii and PS3 in March 2007
• Gametrailers ranks the top 10 videogame systems of all time
• Will Xbox Live Gold ever be free? Should it? I don’t think so, here’s why
• PS3 $499 with 20GB HD and no HDMI, $599 with 60GB HD, both available 11/17
• Nintendo DS price reduction to $129.99