It's finally Game Over for this year's E3, which has seen 50,000 games fans and 2000 exhibitors pack into LA's convention centre over three days to play the latest console and PC titles, meet the biggest developers and immerse themselves in the maelstrom of the modern games business.

E3 is not quite the swaggering force it once was. The industry has moved away from its focus on blockbusting boxed software, the arrival of smartphones and online distribution, bringing in new business models, companies and players. But this is still the easiest and best place to get a handle on where games are.

Here's everything you need to know about this year's E3.

The big publishers are getting the hang of PlayStation 4 and Xbox One

In their line ups for late-2014 and 2015, Microsoft, Sony, EA, Activision, Ubisoft, etc, showed that their developers are mastering the new console hardware. Wandering around the major stands at E3's two largest halls, the massive screens provided a spectacle of astonishing visuals. Far Cry 4, Assassin's Creed Unity, Metal Gear Solid: the Phantom Pain and fantasy adventure Witch 3, all combined intricate environmental detail with convincingly lifelike human characters and immersive physics and lighting effects.

But important too, were the titles that took a more subjective and offbeat approach to next-gen visual design. Sunset Overdive is a woozy, almost hallucinogenic thrill ride, all brash, bright colours, weird weapons and dizzying movement. And then the smaller titles, the surreal Hohokum, the maudlin Ori and the Blind Forest – these titles showed that "next-gen" aesthetics doesn't have to mean volumetric smoke effects and real-time dynamic lighting.

Favourite graphics boast of show: the gorgeous Forza Horizon 2 has its own simulated weather climate and when it rains, the water gathers into puddles, which reflect passing cars, and then dry out in real time.

The mainstream game genres are evolving

For the past five years, action adventures and first-person shooters have dominated the output of the major studios. We've seen dozens of taut military blasters and earnest science fiction and fantasy epics, all joining the familiar game design dots. This year, there were subtle signs of disruption and even innovation. Assymetrical multiplayer titles like Evolve and Fable Legends allowed one participant in a game to play as the baddie, bringing in interesting new strategies and mechanics. In Evolve, the lone protagonist is a monster that the others hunt, in Fable Legends, they're the Dungeon Master setting traps and controlling enemy monsters. This isn't a new idea, of course, but it's going to become more important as developers seek to engage a wider range of players in online gaming.

Elsewhere, sci-fi games are moving out of rigid action-RPG conventions and going truly intersteller in scope. Elite: Dangerous, the new space trading game from Frontier Developments boasts over 400bn star systems; No Man's Sky from Hello Games lets players discover planets that generate whole unique eco-systems; Destiny wants to combine FPS, role-playing, exploration, co-op and multiplayer into one vast experience; in Sunset Overdrive you can walk into any phone boother during the single-player campaign to kickstart a multiplayer match. These are baby steps toward new visions of epic, seamless game design.

Favourite example of shooter innovation: Apart from the mutating monster in Evolve? In Rainbow Six Siege, the co-op multiplayer campaigns can be tried in any order, and will be filled with dynamic destruction and smart AI enemies, moving away from scripted, linear events and choreographed "chokepoints", toward truly emergent showdowns. A close second is the "keys to Kyrat" drop-in co-op mode in Far Cry 4, which allows you to invite PSN pals into the experience even if they don't own the game.

Indie doesn't really exist anymore

Well, not in the way it used to – as an entirely seperate counter culture, indulged/tolerated by the big publishers. As with last year's show, games by smaller studios were front and centre during the Microsoft and Sony press conferences, and the likes of Ori and the Blind Forest, Hyper Light Drifter, No Man's Sky, Night in the Woods and Hotline Miami 2: Wrong Number were causing just as much excitement and buzz on the show floor as their multimillion dollar peers.

Importantly, too, we're seeing major innovations from the independent sector, as smaller teams of really bright, quirky individuals experiment with things like artifical intelligence, procedural content generation and device/web interconnectivity. Those unconvinced by, say, "second screen" concepts, should check out the beautiful and thoughtful adventure Night in the Woods; the PS4 version is looking to use the Vita as the lead character's journal, in a really cute interesting way.

Favourite innovaton by an indie developer: each time you start a match of the fast-paced eight-player jetpack sports game, #Idarb, it generates a unique Twitter hash tag. Spectators can then tweet that tag, together with a specific code, and it'll effect the game – for example, you can make it snow. Genius.

Nintendo is back

Of course, Nintendo never really went away, but for the last couple of years, E3 attendees have rather pushed the veteran publisher to one side, its Wii U console seen as a confusing failure. This year, we saw super cute titles like Yoshi's Woolly World, Kirby and the Rainbow Curse, and Captain Toad's Treasure Tracker, as well as the intriguing Mario Maker, that lets you create your own Super Mario platformer. Oh and Bayonetta 2 and 3DS adventure Persona Q are looking sharp, idiosyncratic and ridiculous. And later in 2014, Super Smash Bros should completely build upon the restorative wonders provided by Mario Kart 8.

People in this business always say two things: "never write off Nintendo" and "it's all about the games". These two cliches pretty much got married and had babies at E3 2014.

Favourite Nintendo thing: it has to be the return of Zelda, with a lovely new look – even if we know virtually nothing else about it.

The old issues are still around

Representation. It's a word that triggers huge arguments and bitter controversies in the game creation and fan communities – and it is still an issue in mainstream development. In the Microsoft E3 press conference, it was 50 minutes before a woman developer took to the stage. It was 20 minutes for Sony, but both events were absolutely dominated by white male executives, producers and creative directors. This of course represents the worringly skewed demographics in Western game development, but you feel the console giants could have tried a little harder to make other people feel included during their events which are watched online by millions of gamers across the world.

Meanwhile, Ubisoft bucked the trend again by employing Aisha Tyler as its E3 press conference presenter. However, it stumbled into a bitter social media controversy, when one of its developers explained that female characters had been left out of Assassin's Creed Unity co-op mode because the extra work involved in designing and animating them was considered too expensive. A Twitter storm raged and Ubisoft released a statement to clarify its position. Many gamers pointed to the dual gender options in titles like Mass Effect, and the custom character creation modes in the likes of Sunset Overdrive (which is being marketed with a male character but that allows free customisation in-game). It was easy to write this off as another insular new media bun fight, but inclusivity and diversity are vital in such a large creative industry – even if only on the business level of engaging with emerging markets.

Favourite contrast to the mainstream monoculture: Never Alone is a fascinating project by a team of ex-Activision execs . They worked with Native Alaskan storytellers to produce what looks to be a mythological adventure of real grace and understanding. The lead character is a young girl who sets out on a heroic mission to find the source of an endless blizzard threatening to destroy her village.

There might be something in this whole virtual reality idea

With Project Morpheus making a brief appareance at the Sony press conference and Oculus taking up a large stand in one of the main halls with its Rift device, it looks like the idea of a mainstream virtual reality headset is gainging momentum. There were some excellent demos at E3, too, especially CCP's Eve Valkyrie and Elite: Dangerous.

Some industry pundits are still worried that people won't sit in their living rooms with massive crash helmets on, staggring around and bumping into the furniture for five minutes before being sick. But that sentence shows a lot of the misconceptions about VR, and its history as a geeky sideline rather than a mainstream possibility. Now, Facebook owns Oculus and Sony is looking at making Morpheus a key part of its consumer electronics offering.

Best VR experience: Creative Assembly was showing off its terrifying Alien: Isolation adventure running on Rift, in a behind closed doors E3 demo. This was easily one of the most talked about experiences among games journalists with many of them discovering an unfortunate truth: in E3, everyone can hear you scream...

• E3 2014: new games unveiled for PlayStation 4 and Xbox One - video