E3: End of an Era?

Those of us who follow the games industry have reacted with various degrees of shock and surprise by the announcement a few weeks ago that E3, the Electronic Entertainment Expo, the major trade show of the games industry, will no longer be held. As Next Generation has reported, several of the major companies whose support was key for funding an event on this scale had pulled their support from the event:

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.

The Next Generation writer went on to identify a range of other factors that contributed to the collapse of this industry institution, including a sense that it had not achieved its goals in attracting media coverage to anything other than the violence issue or the release of new hardware as well as the degree to which other and better publicity mechanisms had emerged which made it possible for companies to maintain greater control over their messages and reach their intended audience at lower costs. The Next Generation coverage stressed the degree to which organizing for E3 had taken on a life of its own, often at the expense of other goals within the industry:

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.

In a public statement, Doug Lowenstein, the head of the Entertainment Software Association, explained:

E3Expo 2007 will not feature the large trade show environment of previous years. It is no longer necessary or efficient to have a single industry 'mega-show.' By refocusing on a highly-targeted event, we think we can do a better job serving our members and the industry as a whole, and our members are energized about creating this new E3.

They Cancelled What?

Something of the shock waves this announcement has sent through the games sector is suggested by this pithy comment from Tycho over at Penny Arcade:

There must have been a time before there was an E3, but that's not really a part of my experience. Hearing that it's cancelled, or at any rate will be altered in "format and scale" (read: cancelled) is like hearing that Australia has been cancelled, or that the weak gravitational force is being temporarily suspended.

Some have wondered how a thriving entertainment industry might survive without a high profile trade show. E3 is most often compared to ShowWest which is the place where film exhibitors learn about the new releases for the year or Comicon, which as we have been reporting, functions as the interface between the comics industry and its fans. But already to draw those comparisons in such terms suggests the difference between E3 and these other events. E3 was trying to be too many things for too many people -- a showcase for major publisher's releases, a marketplace for products hoping for distribution and for international games hoping to find a way into the American market, a press event to showcase the industry, a training ground and recruitment ground for future professionals. Other groups have started to use E3 as a base for their own work: we did two Education Arcade conferences in the LA Convention Center during E3 trying to build interest in games and education and UCLA piggybacked off E3 this year for its conference on gender and games. The one function E3 did not play was to provide an interface between the games industry and its fans.

There was always a tension, though, between the lavish spectacle and parties required to woo reps from the major retail outlets and the more sober face that the industry wanted to adopt for talking to the press (and through them, to the general public). In many ways, the collapse of E3 signals the growth of the games industry -- as something larger within our culture -- rather than its diminishment.

Why E3 Hurt Games

Some of you know that Kurt Squire and I co-author the "Applied Game Theory" column at Computer Games Magazine every month. Several years ago, we penned one describing why we thought that at least aspects of E3 culture might be bad for the games industry. I don't want to see reposting this text here now as piling onto Lowenstein and my other friends at the ESA. They do great work on behalf of the games industry and they don't get enough credit. I am sure that they are experiencing the end of E3 with profoundly mixed feelings. But I did think what we said then would help shed some light on the current issues and might help us think through together what the next incarnation of a games industry gathering might look like. (The specific titles referenced here will have dated but otherwise this would still have described the 2006 event.)

Perhaps you are at the convention now, reading this column over the thundering noise and flashing lights which turn that same showroom into something akin to the streets of Hong Kong at midnight. Scantly-clad floor babes beckon to you with promises of easy access and cheap loot. Dancers in leotards demonstrate the wonders of motion capture technology. Highly skilled game girls are challenging all comers. The noise you are hearing is the sound of a thousand computer games all being played at the same time. Most people stagger out after only a few minutes, so overwhelmed that they can no longer focus on any one screen. We've seen people passed out in the corner, their friends trying to coax them back to consciousness by upping their caffeine intake. Everyone should see E3 once to experience the adrenaline rush.

E3's economic function is well understood by anyone who has spent more than a few minutes thinking about the games industry. This is where buyers from Wal-Mart, Electronic Boutique, and the other chain stores first encounter the coming year's product. The major game companies are hyping their hottest new titles, smaller companies are trying to break into the market. Both are involved in a life and death struggle for the attention of the middlemen who

will determine how much shelf space a title will get and how long it remains there. In E3 2001 for example, the disappointing Xbox showing sent the Microsoft PR machine scrambling for months to convince retailers that

platform was ready to ship.

Yet, the consequences of E3 on the look and feel of contemporary games have been less often discussed. For starters, many game designers talk about the importance of designing memorable moments into their new releases -- features which leave vivid impressions after the bulk of what we saw on the floor has blurred together in our sleep-deprived, alcohol-addled, and sensorial-overloaded minds. Producers push designers to come up with a preview reel which grabs attention on the huge monitors which dot the display room and often, the result is an over-emphasis on cinematics over game play. The disparity between those massive screens, which would not seem out of place at your average multiplex, and the much smaller monitors on which most of us play games tells us why so many games look like bad action movies rather than exploring the interactive potentials of this medium or why game soundtracks so often emphasize noisy explosions rather than emotionally enhancing music. What would happen if every movie to be release next year got shown all at the same time in the same auditorium? Which films would stand out? Which films would get buried? For those of us who want to promote greater innovation and diversity in game design, the E3 floor may be the biggest obstacle in our path.

Smaller scale games get little or no floor space. The Sims, for example, got swallowed up by the chaos of the E3 showroom. Games like Rez or Majestic which really stretch the limits of our understanding of what the medium can do are more often displayed in private rooms off the main floor. Some of the most interesting games are literally relegated to the basement, the Kentia Hall, where foreign and independent game developers fight over the cheap space with discount distributors and peripheral manufacturers. You might find an interesting title squeezed between the new video game glove and an online Korean dating game, but these quirky titles have little chance at being heard above the marketing din upstairs.

After even a few minutes on the floor, all of the games start to look the same. Is it any wonder that distributors and retailers are drawn towards recognizable franchises in such an hyperbolic environment?

Is it any surprise that retailers make decisions based on eye candy and glitz?

There's nothing wrong with the industry throwing itself a party at an E3. Wouldn't it be great, though, if like film and music, we had other outlets as well: independent gatherings, grassroots festivals, a real awards show.

As the games industry matures, it may not be able to contain all of its economic and social functions within one or two gatherings. The Indie Games Jam at the Game Developer's Conference is one approach, we hope that other similar efforts will emerge in the upcoming years as well. Consider, by comparison, how important the Sundance Film Festival has been for creating visibility and providing economic opportunities for independent filmmakers.

Where Do We Go From Here?

One step is to separate out the various functions which E3 served and see whether they should be combined or remain separate. Clearly, the industry will need some ways to introduce its new products to retailers and there's some danger that the next step will be to fragment this process -- allowing the major companies to have their own shows (as Next Generation suggests) but leaving the smaller publishers out in the cold. I don't think that would be a very good thing for the games industry. A second key function would be to inform the public about the current state of the games industry. For example, the Penny Arcade Expo may function more like San Diego Comiccon in providing a space where industry figures communicate more directly with their fans, while there are moves underway to develop an independent games festival that functions more like Sundance does within the film industry, offering a place to showcase work by smaller publishers or games that fall further outside the commercial mainstream. We are seeing a growing number of gatherings with more specialized focuses, such as those centering on casual games, mobile games, serious games, even religious games, each of which serves a specific niche as compared to the general interest focus of E3. The Game Developers Conference may absorb more of the training and recruitment functions that were associated with E3. And so forth.

Here's the paradoxl: E3 was bad because the major developers dominated and they overwhelmed smaller producers, contributing to the loss of diversity within the games industry. But when E3 goes away, smaller publishers will have to struggle that much harder to get the attention of the marketplace and they may be the ones who have the most to lose during the transitions that are ahead.