02-08-2006, 03:57 PM
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|  End Of E3
End Of E3 Next Generation - E3 Finished as Big Exhibs Pull Support Quote:
The ESA will today seek to salvage some good from the wreckage of E3; but the spectacle that has held the industry in thrall for 12 years is at an end.
Click here for ESA's confirmation of this story's content.
And here for our analysis of E3's collapse...
As Next-Gen exclusively reported Sunday, all major exhibitors have effectively pulled their support from the show, prompting the majority of game publishers to also cancel plans for high-cost booths. The ESA will make an announcement later today that will attempt to add some gloss to this catastrophe, with some form of media-focused boutique event - branded E3 - taking its place.
Some gullible journalists, evidently blinded by a desire to do-down a rival scoop, have taken this as evidence that E3 is alive and well and merely being 'downsized'. But this euphemism doesn't change the facts. The decision by big manufacturers and publishers to walk away has left ESA in damage-control mode. As we reported yesterday, E3, in its present form, is dead.
The Entertainment Software Association (ESA) shindig has been a staple of game industry life since the mid-1990s. However, 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.
Whatever is announced today 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.
| Next Generation - ANALYSIS: Ten Reasons for E3's Collapse Quote:
The picture accompanying this story sums up E3. It was about big-ness, most especially big crowds. We won't see scenes like this again. So why did the hardware manufacturers and big publishers decide E3 was no longer tenable? Why did the other publishers follow suit. Here are our ten reasons...
I was editor-in-chief of the Official E3 Show Daily in 2006, and a few of those produced in the late 1990s. I attended the first E3, and the last and most of the others in between.
I'm sorry that this event has gone, to be replaced by some new thing, much smaller in scale - more 'intimate' is the euphemism of the moment. It was a great way to meet and greet friends, allies and rivals in the business. It was exciting and fun and loud. It had its faults, but it acted as a focal point for the industry, before the summer's business of preparing for the Holidays really began.
It was an opportunity to take stock of the industry as a whole - the people, the products and the trends.
Many greeted the news that E3 had gone with shock. But, in reality, its days were numbered. Here's why...
1. The People Who Pay Weren't Happy
E3 was a great showpiece for the industry as a whole. But the industry as a whole does not pay for E3. Individual companies pay. They need to be able to demonstrate tangible benefits for that expense, just as they would for any other marketing cost. Those benefits were always difficult to justify, but had now become completely untenable. We understand some publishers still believe the show pays its way (for them individually). The trouble is, not enough companies took this view.
2. Four People Said 'Enough'
When I spoke to some people about E3's collapse, the general response was one of disbelief. How could something so big fall apart so quickly? Perhaps this is why so many news outlets simply refused to believe the news. The fact is that all it took were a very small number of company presidents to talk with each other, and figure out that if they all decided to pass, none of them would need to be there. Once Nintendo, Microsoft, SCEA and EA had stepped out, E3 was history. It was multilateral disarmament.
3. Media Irrelevance
There was a time when the game industry could enjoy its little May media window, as major news networks sent their reporters to the show to talk about the state of the industry. The fact that they usually filed stories on either videogame violence or new hardware launches that would have been reported anyway, seems to have been allowed to slide. These days, games are a major entertainment for people of most ages. News editors can't afford to just cover games during E3, or with a pre-Holidays buyers' guide. Games are always on the radar.
4. The 'E3 Winners' Farce
The 'who won E3?' contest beloved of we in the media had become a real problem. E3 is not a sporting contest, and yet it was increasingly seen as some form of championship. Every year we have one winner (2006: Nintendo; 2005: Sony etc.). Companies on this merry-go-round must sooner or later see that the value of winning one-in-three is not balanced by losing two in three.
5. Rise of Publisher Events
Media events held by companies to show off their own products offer publishers more control, lower costs and a more intimate atmosphere. They've been growing drastically in scale and importance. Without the burden of E3's expenses, this trend will continue, only more so. The downside of this is that, while larger companies can expect wide media coverage of their events. Smaller companies cannot make so much noise. The likely outcome will be more lavish events designed to attract jaded journalist. Or road-trips, in which companies make the effort to present their goods to the widest possible audience.
6. Common Sense
Then there's common sense. For example - Nintendo's aim at E3 was to get Wii into as many hands as possible. There must be better ways of doing this than spending $20 million making a bunch of developers and blog editors stand in a line for three hours.
7. The Internet
The Internet generally gets the blame for bringing old establishments to their knees, and this is no exception. Information is disseminated faster and at better resolution than ever. The need to go to Los Angeles to look at a game is somewhat negated when you can download a movie, or play a demo on Xbox Live. No, it's not the same, but it's close enough to make a difference.
8. The High Cost
Convention Centers the world over charge extortionate prices for mundane services and LACC is no exception. There is something extremely infuriating about being charged $20 for a sandwich, a soda and a packet of chips. E3 didn't die because of the price of sandwiches. But the fact that every single thing associated with the show cost a great deal of money was a contributing factor.
9. The Herculean Effort
E3 isn't just measured in terms of the cost of the booth, the floor-space, the party, the hotel, the flights etc. There's also the incredible amount of effort that goes into preparing for the show. Marketing teams are focused on E3 for a good six months of the year. Developers are whipped along as they try to get games ready for what is, essentially, an artificial deadline. It could be argued that this adds focus to development as projects near their conclusion, or it could be argued that it's an unnecessary diversion and a big pain in the ass. Publishers that focus on company-specific events are not under so much pressure to compete with the rest of the market for column inches, months before the real battle of competing for consumer dollars.
10. Big Shows are Passe
For all of the reasons above, massive pan-industry events are feeling the squeeze. In many industries, attendance figures are down, while companies seek to cut costs by camping outside these events, or by avoiding them altogether. Cities that hold these events are often criticized for ramping up hotel prices and gouging attendees. Ultimately, they are losing the cost / benefit analysis.
Whatever passes for E3 next May, Next-Gen will be there. It may be called E3. It may feature some people looking at games in a big room. There may even be some free drinks. But it ain't going to be E3.
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