"We've seen some research that says 60 percent of people who bought a Wii Fit play it once and don't play it again. So we have to get the balance right, because what we are doing is bringing new consumers into the market for the first time in their lives sometimes—and we have to treat them with respect," Gosen told attendees.

The executive later expanded on his comments, telling Develop that "what Nintendo have done with the Wii is truly fantastic—there is no question about it. But I think sometimes there is a thin line between gimmick and great gameplay."

The runaway success of Nintendo's motion-centric Wii console has prompted many software and hardware developers to look into motion-sensing control schemes. Earlier this year, rumors that Microsoft was planning a Wii Remote-like peripheral of its own were heavily circulated, though the device did not appear at following trade shows.

Gosen added in his keynote address that new user interfaces were important to the industry, but stressed that peripherals had to be designed with utility and longevity in mind.

"At the end of the day that comes back down to creativity... They are not good if they are gimmicks. There is a challenge for us to make sure that all new user interfaces are deep and are rewarding to the end user," he stated.

E3 2008 didn't pass without a new peripheral announcement from Microsoft, however. At the conference the company officially unveiled Lips, a karaoke-dancing hybrid title which comes packed with a pair of light-equipped, motion-sensitive wireless microphones. Gosen believes that the title fills a vacant niche.

"If you look a what people don't like about existing karaoke games it's that you've got wired microphones which look like they've come out of a toy shop and a fairly restricted song base," he said.

Developed in cooperation with Elite Beat Agents (NDS) developer iNiS, Lips is expected to hit retailers this coming holiday. Wii Fit, meanwhile, has sold more than five million copies worldwide since its debut earlier this year.