Integrating Facebook with Xbox 360 would let gamers leverage the power of community to seek out more compatible opponents (Image via Flickr).

Last week, my colleague Josh touched on the new social features Microsoft is adding to the Xbox 360 – Facebook Connect and Twitter functionality that will allow users to broadcast their gaming activities to their friends.

As one of Josh’s commenters noted, bringing Facebook onto Xbox is of limited utility. Without an easy-to-use keyboard, at least as easy as a mobile phone keyboard, for example, the main use for access to your Facebook account on Xbox Live will be to ping friends to come join you in-game, or to show off your gamer score.

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Almost a year ago, this column touched on a planned update for the superhero MMO “City of Heroes,” which would allow users to create and share their own custom missions for the game. Yesterday, the Mission Architect, as the feature is now called, officially launched after a beta period in which 5,000 missions were created in a 2-week period.If even half a percent of those missions end up being entertaining and popular among the “City of Heroes” fanbase, just two weeks of user access to mission creation tools has produced a fairly significant content update. “City of Heroes” is the first mainstream MMO to take this step, and although the COH fanbase is small compared to giants like “World of Warcraft,” this release is a major step for user-created gaming. One of the most significant challenges of upkeeping an MMO — and, with the prominence of downloadable content in the current game industry, all major titles — is providing fresh content to the user base to keep them engaged.

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I would be violating the rules of gaming journalism, it seems, if I didn’t write something about OnLive this week. The gaming-on-demand service was the belle of the ball at this year’s Game Developers Conference, and has yielded a crop of speculative articles about the future of console gaming as well as many, many bad headline puns (”OnLive is OnCrack,” and “OnLive is UnLikely” are some choice selections).The service is demoed here, but for those who don’t click through — OnLive is a small, 1MB plugin for your Mac or PC, or a small hardware box for your television, that promises to allow you to play top-end PC games on your entry-level computer, rather than dropping $2,500 on a gaming rig. It works by “cloud processing,” which essentially means that the heavy lifting of running the game is done server-side, and the video is streamed to your computer or TV through your broadband connection. In theory, the only limitation on what games your system can support is the speed of your connection. Read the full article

Much like many industries in today’s uncertain economy, video game software developers are taking a bit of a beating. Major publishers like Electronic Arts, Midway, Eidos, Microsoft Games Studios, THQ and others are making some hard budgetary choices, cutting projects, and laying off development staff.And part of the buzz currently around this trend is that with the loss of creative staff at these firms, creativity will start to suffer in the 2009 and 2010 release calendars. Read the full article

NPD numbers for January came out last night, and despite the daily doom and gloom in the economy, the overall console market continues to post sales growth — 148% year-over-year growth for the Wii, and 33% year-over-year growth in sales for the Xbox 360. Only the PS3 saw a decrease in year-over-year sales, losing 24.5% compared to last January’s numbers.Microsoft made special mention of the success of the Xbox Live service in its report this month — it was the “single biggest month ever for Xbox LIVE as record number of new members joined in January [and] exclusive game add-ons extend blockbuster experiences” — the latter referring largely to the Fallout 3 DLC content packs, exclusive to the Xbox version of the title. Microsoft’s new Netflix service, mentioned by my colleague Josh Lovison in an earlier column, has been a great success as well: More than 1 million Xbox LIVE members are now enjoying Netflix’s streaming video service, and each household has watched an average of 16 movies over the service, according to Microsoft. Read the full article