Senior industry sources have revealed to Next-Gen.Biz that the E3 industry event, in its present form, has been cancelled for next year and the foreseeable future.

Image The Entertainment Software Association (ESA) shindig has been a staple of game industry life since the mid-1990s. However, we understand the larger exhibitors have jointly decided that the costs of the event do not justify the returns, generally measured in media exposure.

Publishers believe the multi-million dollar budgets would be better spent on more company-focused events that bring attention to their own product lines rather than the industry as a whole.

Well placed sources say the news that larger exhibitors were pulling out had prompted urgent meetings among publishing executives. They decided that, without the support of the larger software publishers and hardware manufacturers, there would be no point in continuing.

ESA president Doug Lowenstein will likely announce the news some time within the next 48 hours, possibly on Monday. It's likely that the ESA will seek to limit the damage by organizing some form of lesser event in May, possibly even with the E3 brand, but this will be no more than a fig-leaf. The days of an industry event attended by all the major publishers, spending big money, are gone.

Calls to ESA staff are not being returned at present.

July 31, 2006 - For twelve years now, gaming professionals and geeks alike have gathered for a week of electronic entertainment frenzy. The annual Electronic Entertainment Expo has hosted giants and small players alike as companies present their latest game titles and hardware to media, retailers, and colleagues. The event crammed the Los Angeles Convention Center with blazing lights, blaring speakers, bustling crowds, and endless activity -- before spilling into flashy press conferences and notoriously decadent after-hours parties.

Now, E3 as we've known it is a thing of the past.

The Entertainment Software Assocation, which hosts E3 each year, announced today that going forward the Expo will be an "intimate event" rather than a massive trade show, hosting press events and small meetings with media, retailers, and developers. According to Electronic Arts, the redesigned E3 will now take place in July.

The new E3 will still be hosted in Los Angeles, and will still offer game demonstrations. However, the significantly smaller format acknowledges that many companies -- especially larger outfits such as Sony, Nintendo, Electronic Arts, and Microsoft -- already host their own showcase events. Additionally, regional events such as the Tokyo Game Show and the Games Convention in Leipzig have lessened the need for what the ESA describes as a single "mega-show."

"The world of interactive entertainment has changed since E3Expo was created 12 years ago," commented ESA president Douglas Lowenstein. "At that time we were focused on establishing the industry and securing orders for the holiday season. Over the years, it has become clear that we need a more intimate program, including higher quality, more personal dialogue with the worldwide media, developers, retailers and other key industry audiences."

Prior to this morning's announcement, industry buzz suggested that larger companies had become frustrated with the high cost of E3 and decreasing benefits of marketing at the show. Additionally, preparing games for E3 often means taking development teams away from work on final versions while demonstration builds are polished -- a costly process.

Publishers such as Capcom and Electronic Arts have already announced their support for the new format. Electronic Arts told IGN that it is "very supportive" of the show's new approach, and plans to participate next July.

"When the show began 12 years ago, it was a great opportunity to meet with buyers, media and partners," an EA spokesperson explained. "Over time though, the timing has become disruptive to the studios and the costs have become expensive.

"The July event is less disruptive to our development schedule. We think that software shown in July will be a more accurate reflection of the games that will appear in stores later that year."

According to the ESA, the new E3 will take shape "over the next several months," as the trade organization finalizes what it hopes will be an event to better serve the industry.

"E3Expo remains an important event for the industry and we want to keep that sense of excitement and interest, ensuring that the human and financial resources crucial to its success can be deployed productively to create an exciting new format to meet the needs of the industry," said Lowenstein. "The new event ensures that there will be an effective and more efficient way for companies to get information to media, consumers, and others."

The first E3 was held in Los Angeles in 1995 by the Interactive Digital Software Association (now the ESA). At the time, a new generation of consoles was rising, as SEGA released the Saturn, Nintendo offered its Virtual Boy, SNK its Neo*Geo CD, and Sony entered the market with a little console called the PlayStation.

Last year's E3 admitted more than 60,000 attendees and hosted about 400 exhibiting companies, according to the ESA.

Editorial: Will the industry be the same without its biggest trade show? We examine the plusses and minuses.

July 31, 2006 - For the last 12 years, one event has provided a snapshot of the videogame industry in its various forms. In its infancy, the Electronic Entertainment Expo was an amateur affair, desperately aspiring to prove to outsiders looking in that it - like videogames -- was legitimate, and not merely a passing fad or worse, a frozen niche. Ten years later it was an epic undertaking filled with enough glitz, glamour and scantly-clad women to induce jaw-dropping double-takes from even the most discerning Hollywood groupie. Over the years, E3 has grown with and become representative of a fattening industry whose net worth is in the billions and not millions. In fact, for the last five years, E3 has effectively been the videogame industry's Academy Awards, as much a celebration of the greatest new games in development as it is a showcase for them. It is for this very reason that every publisher and developer, from Nintendo, Microsoft and Sony to Electronic Arts, Ubisoft and Eidos, has made E3 home for product launches and first hands-on gameplay demonstrations, not to mention a pedestal from which to shout design and production philosophies.


The result is a technological expo that borders on the anarchic, with laser shows and loud music drowning auditoriums even as thousands of people flood the walkways, line up for demos, and cheer in support of their developer of choice. The novelty of the show is admittedly impressive, as it houses all of the big games that companies don't talk about during any other point in the year. But few seasoned game developers, publishers or journalists will likely speak of E3's benefits prior to the event. The truth is, it's a scramble; it's also incredibly long, hard work, and at the end of the day those involved oftentimes wonder if all the hustle and bustle was really worth it.
Clearly, developers and publishers have finally said enough is enough. Early Monday morning, the Entertainment Software Association (or ESA) released statements that served to provide speedy damage control for what is the big news of the week, which is that most of the major publishers have aligned and decided not to participate in E3 as it has been. The ESA promises that E3 will go on -- it will merely be downsized to eliminate the spectacle of yesteryear. The reality is that the E3 the industry knew and supported has sailed away and isn't likely to return. In its place will be a series of press events and smaller meetings, all designed to keep the experience intimate, focused and inexpensive. In short, good-bye friend of a friend who works for GameStop and good-bye hobbyist fansite with 1,000 readers. Also, good-bye Convention Center auditorium, good-bye saturated geek body odor and good-bye wealth of playable games. Ladies and gentlemen, EA has left the building.

If you've already taken next May off just so you can browse IGN all day and every day, you might want to reevaluate your schedule. As readers and viewers - outside observers looking in on the window that is E3, in other words - this news probably doesn't make you want to stand up and salute. After all, you've undoubtedly come to expect great announcements and revelations from E3 over the years and it's all there for the cost of a point and a click. Why give all that that up? Maybe you won't have to. The venue itself may have shrunk, but the possibilities have not dwindled with it. The fact that publishers are still supporting a new and focused E3 means exactly that gamers can still look forward to big news and developments in the summer time frame. Perhaps not exactly in May - some publishers have already indicated that they'd rather show off their projects in July or later - but certainly in the general area. And as flashy as E3 may have become, we'd be willing to bet that you've always cared much more about the games themselves than you have the events or the booth babes.

What you might be surprised to learn is that the editors of IGN have in a single day received phone calls from dozens of developers and publishers celebrating the downsizing of E3. You might also be shocked to discover that many of our own editors happily took part in the celebration, which seems to have spread like wildfire throughout the industry. This might be hard to swallow, but it is nevertheless true for so many. The first time you go to E3, it's an amazing and daunting experience. The second time, it's work; and when you've gone as many times as we have, it can be unforgiving work.

As online editors, our scramble comes during E3, where we are required to update our various websites as quickly and as frequently as possible. But for the people involved in the game-making process, the road to the big event can actually interfere with the overall progress on their game, not nurture it. Over the years, the trade show has become so important that publishers have actually embedded it into their internal benchmark plans, meaning that developers who could and should be working to finish their games for the holiday oftentimes have to stop everything and instead create a polished demo for the show. "Crunch time," as it's called, is expected prior to the game's release, but E3 forces upon developers another set of unwanted 18-hour days and unrealistic benchmarks.

The thing is, all of this hard work does not guarantee developers or publishers an optimal environment to present their games. The E3 show floor is typically blasted by lighting and drowned out by an army of booming sounds from people and nearby booths. As a result, what should be a simple process of playing, seeing, and hearing games is made almost impossible. Can a game like Condemned be scary when the audio can't be heard and it's difficult to see what's happening on the screen? Try to imagine Hollywood taking the same approach. What would happen if Tinseltown's biggest studios gathered sneak peeks of their upcoming movies and showed snippets of each under laser light shows and blaring music? It'd likely do more harm than good.

Perhaps this is the very reason why major developers have in recent years only previewed their E3 games behind closed doors. The Xbox 360's Gears of War from Epic was one such title to be playable exclusively within a blocked off, guarded room at Microsoft's booth. Meanwhile, some studios who did have games on the show floor confided to IGN shortly after the event that they were severely disappointed with how their products were being demonstrated. There's no intimacy to the open floor and anybody can walk right up and play a game, even if they really have no business being there.

E3 is not open to the public. It is intended for videogame developers, publishers, press and retailers. The ESA has over the years cracked down on illegitimate attendees, but one mad rush through any E3 exhibition hall is proof enough that its attempts are only loosely successful. Fansites are able to send 50 writers, many of whom are only going for personal reasons. People print up fake business cards and show up with their friends. And depending upon who you are or who you know, you may not even need any affiliation whatsoever with the videogame industry to enter. There are people at E3 that won't have any impact on the videogame industry, and there are a lot of them. Meanwhile, people who are doing legitimate work may have to stand in line behind these guys in order to see or play a product. The system hasn't worked for years.

Is it really worth it for publishers to participate in the madness? The Convention Center requires that exhibitors use union labor, which isn't cheap. On top of that, a typical booth can run well into the hundreds of thousands of dollars and into the multi-millions for Nintendo, Sony and Microsoft. All of this money and personnel so that games can get lost in the shuffle of the show? A company like Nintendo could conceivably spend the millions of dollars it might have at for a booth at E3 to fly every major journalist in the country up to Seattle for a week-long game presentation. Bearing that in mind, what exactly is the real advantage of supporting the old venue?

Downplaying the role of E3 in favor of individual publisher events is key to this new process and it may have some healthy side effects for IGN readers. For one, the quiet periods before and after E3 are at best completely over and at worst dramatically redefined. Publishers who clung to the May time frame to talk about their games will under this new approach have less reason to remain tight-lipped. Big game announcements typically reserved for May could as a result come sooner or arrive throughout the year at a steady pace, which would be preferable.

Publishers will no longer have to rely on the ESA to determine who's legitimate and who isn't; they can simply invite the media they value to their respective events and they can likewise provide a controlled and optimal atmosphere in which they can present their software. More hands-on time and with proper audio/visual equipment will provide journalists with a better understanding and impression of the games, which they can then more effectively relate back to audiences.

E3 is not over. Publishers will always need one way or another to get their message to consumers. Whether it's in a big auditorium or a tiny, private room, the information will continue to flow and media like IGN will continue to report it. However, we might have lost the spectacle and the illegitimates, which is the best thing that could have happened to a games industry that has moved beyond imitating Hollywood and become an entertainment giant of its own.