Microsoft had a very blunt and uncharacteristic (Lips, You´re in the movies; looked like they were trying to hard to get the Playstation casual audience, something they never did before when Peter Moore was around nor need too) E3 last year, even with all those games on stage.
In fact, last year, imo, was saved from complete mediocrity by Fable 2, Gears 2, Left 4 Dead and the NXE (ok, and to some extent, Banjo: Nuts & Blots).
All the rest, as exclusives go, it was a mess, too many disappointments (the PS3 was the right opposite, it had an amazing year).
This year, in theory, the same is going to happen, but there is no "Gears or Fable" in sight, there is no announcements of anything besides the already released Halo Wars and Halo 3: ODST.
But Microsoft is extremely intelligent as a company, so, i believe they have something in the making, something big to announce (or several things).
For starters, there is something big from Molyneux to be announced, and, as much as he likes to hype his games (but, at the same time he is extremely humble, and always apolagies when he doesn´t delivers what he promises), the man is a genius.
Then, there is the rumored motion control, which Peter Moore indirectly confirmed in the last episode of GT TV (which means they are working on it since he was at the company).
And, lastly, there was the rumor of Microsoft buying an Israeli company (called 3DV System) that are making a "camera based control" more advanced than anything on the Wii, that maps your all body, even your fingers individualy.
Hell, even a Onlive kind of service is not that far-fetched, because Microsoft is talking about selling games online directly on the 360 since 2006.
That would be big, because it would be the next step on motion control evolution, and it would be xbox exclusive.
All in all, i believe in Microsoft´s intelligence, and the need for them to give a solid reason why the lack of announcements for this last 1 and a half years.
So, i believe they will deliver a gigantic E3...if not, i will start to have some doubts on Microsoft´s future.