Welcome to the 2012 OXM GOTY Awards! All this week we’ll be running down our picks from the best in games, concluding Friday with OXM’s 2012 Game of the Year. Check back here for the running list of winners.

Today's batch of awards single out the best games you can find in each of the Xbox's major categories (with one or two anti-awards to mix things up). If you're looking for the best retro game, download, or a reason to buy a Kinect, look no further.

BEST XBLIG GAME: Penny Arcade’s On the Rain-Slick Precipice of Darkness 3
Choosing just one game that stands out from the incredibly diverse pack of Xbox Live Indie Games is a daunting task. After diving past all the massage sims and Minecraft clones, we found that this year yielded some strange and lovely stuff — but ultimately, it was Zeboyd Games’ irreverent, 2D riff on old-school console RPGs that cemented Penny Arcade’s On the Rain-Slick Precipice of Darkness 3 as our favorite this year. Not only was the decision to release the third chapter in the former XBLA series on XBLIG a bold move, it turned out to be downright delightful to play. NOTE: OXM contributor Nathan Meunier served as a guest judge in this category along with the OXM staff.
(Runners-up: Retro Arcade Adventure, Sushi Castle, Ogre’s Phantasm Sword Quest, Uberzombie USA)

BIGGEST DISAPPOINTMENT: Kinect Star Wars
Our great Star Wars love aside, we were deeply bummed by how mediocre this no-brainer game — one that helped sell the Kinect concept in the first place — turned out to be. Lightsaber duels are slow, tedious affairs, and whether you’re playing as a Jedi, a rancor, or a podracer, imprecise controls torpedo the experience, even in co-op. Its surprisingly good (and goofy) dancinggame portion keeps Kinect Star Wars from being a total disaster, but it’s still the Phantom Menace of motion games.

BEST ADD-ON: Dark Souls: Artorias of the Abyss
Most campaign DLC goes the route of offering new items or extending the story via extra quests in order to snag newcomers or to lure vets back into the fold. For the much-beloved but blisteringly-difficult Dark Souls, developer From Software instead delivered a love letter to the game’s most devoted fans in the form of Artorias of the Abyss’ one-two gut punch. Unapologetically tough (and for experienced players only), Abyss doesn’t even bother laying out a welcome mat for the merely curious. And for its dogged devotion to giving its fanbase more of what it wanted, we salute it.
(Runners-up: Skyrim: Dawnguard, Mass Effect 3: Extended Cut, Borderlands 2: Captain Scarlett and Her Pirate’s Booty)

BEST KINECT GAME: Dance Central 3
Is it a shock that Harmonix’s top-tier dance game has now won this award three years running? Probably not, but Dance Central 3 didn't win the award by simply resting on its laurels. The story mode has an irresistibly goofy spin that keeps you dancing, gobs of new multiplayer modes keep parties going for hours (especially thanks to a tournament-style round-robin dance face-off), and the routines test even the most talented dancers among us. The game strikes an impeccable balance between being the ultimate party game and a true test for hardcore dancers' skills, making this one dance craze that isn't going away.

BEST RETRO REVIVAL: Jet Set Radio HD
We'll admit it: We were worried. We fretted that our gameplay skills had deteriorated over the 12 years that’ve passed since the original, tough-as-nails Jet Set released on Dreamcast as Jet Grind Radio. We feared that maybe it wouldn’t hold the same charm as we remembered it having. Then we booted up Sega’s visually upgraded Jet Set Radio HD, got smacked in the face by its brutal difficulty, picked ourselves up, and fell in love all over again. The things we’ll do to get that one last Graffiti Soul… (Runners-up: NiGHTS into Dreams HD, Zone of the Enders HD Collection)

WORST GAME OF THE YEAR: Men in Black: Alien Crisis
A veritable case study in how to suck the fun out of an entertaining license, this Men in Black game has you blasting one parade of generic alien thugs after another until you can stand no more. The occasional conversations and stealth sequences add not a whit of joy, nor does using an optional Top Shot Elite lightgun. Normally, we’d complain that a $60 retail game was only three hours, but in this case, brevity was a blessing.
(Runners-up: Amy, Deep Black: Episode 1, The Expendables 2)

BEST XBLA GAME: Fez
How do you even begin to explain a game like Polytron’s remarkable Fez? It may look like a 2D platformer, but there are no enemies and you can only really jump or rotate dimensions (like a left-to-right Rubik’s Cube, for lack of a better analogy). It’s stuffed with countless puzzles, but they aren’t “find the red key” or “shift a piece into place”–type brain teasers; these are bonafide stumpers broadcasted via cryptograms and tetronimoes. Fez dared us to break out pen and paper to solve its hyper-dense mysteries, while dazzling us with references to everything from gaming history to external logic (and be prepared to break out that smartphone camera for some QR codes!). Played out against a seemingly benign, Zen-like backdrop of its main character having his mind blown when he discovers the third dimension, there’s a playful intelligence at work throughout. But it’s the way Fez captures the joy of videogames while possessing deep mysteries that makes it worth celebrating.