Reports of E3’s death continue to be an exaggeration … at least for now.
"I would say that E3 has the ability to continue to lead for decades to come," said Mike Gallagher, head of the Entertainment Software Association, which runs the annual show. "It will take a very vigilant approach to continue that, and we’re pleased to have that role."
Taken at a glance, Electronic Arts' decision to leave the E3 convention center show floor and bump its press conference to the weekend before the show officially starts looks like a bad sign for E3. The same is true of news that Activision won’t be on the floor this year. Nor will Disney.
But dig a little deeper and you find not the death of a decades-long trade show centered on video games, but its evolution and changes in the industry itself.
Gallagher seems in a cheerful mood when he hops on the phone with me.
"It’s Christmas in June," he says before we can start the interview. "There’s a lot of adrenaline."
E3 officially kicks off on Tuesday, June 14, but the show’s greater impact continues to extend out. Now events are starting to bubble up on the Saturday before the show; two major press conferences are being held on Sunday.
One of them is EA’s.
Gallagher says that EA’s decision to move off the show floor and across the street from the convention center was born of a need to innovate and try new things — something, he said, the show itself is doing.
Both EA Play’s public event and E3 Live 2016, E3’s own new experiment with a public event, are located in the same building: The Novo, the venue formerly known as Club Nokia in L.A. Live.
Gallagher says that to survive, E3 has to evolve, something he believes it's been doing since the first one opened its doors in Los Angeles in 1995.
"If you look at it over the years, there have been innovations that have redefined the show," he said.
What started as a retail show slowly evolved to become a show for developers, retailers and the press. In 2006, the ESA decided E3 was getting too big, and downsized it. The organization moved the show to Santa Monica for two years before returning to L.A.
From 2009 to 2016, the show has slowly adapted to the changing media landscape and shifting importance of non-traditional gaming like titles on phones and virtual reality.
Last year, E3 opened its door to a number of "prosumers" and influencers, a collection of people who aren’t in traditional media outlets but do have a broad audience.
The constant tweaking of the show’s format, while not always outwardly obvious, has helped to maintain E3’s ability to get the message of games out, Gallagher said.
"We’ve had over 50 billion social media impressions off of E3 for the last few E3s," he said. "Those are consumers creating those impressions."
And, he argues, that despite some shifting of who is and isn’t displaying games on the show floor, E3 remains as relevant as ever.
Last year, the show had 1,600 different games, products and experiences, 100 of which were brand new, he said. This year there will be 2,000 different games, products and experiences, 130 of which will be completely new.
"When you look at those numbers you see that E3 is a magnet for what is coming next," he said.
"We are at E3."
Chris Bruzzo, EA’s chief marketing officer, is firm that the company hasn’t left E3.
He calls it a "big celebration of video games," a "special thing" and "something so cool."
But as EA reworks how it operates as a company and redefines its interactions with players, the publisher decided they wanted to have more direct access to the gamers, rather than just retailers and journalists.
What that meant for EA and E3, was the publisher leaving its massive spot on the show floor and moving across the street to the biggest venue in LA Live. There, the publisher has set up an area for a press conference that will become a live-streaming zone once the conference is over. Other floors are dedicated to an array of games that players will be able to come and check out for themselves.
EA sees this as an experiment driven by the changing landscape of both the game industry and the media that covers it.
"Over the course of three days we will be able to talk to multiple distinct groups: retailers, journalists and influencers," he said. "Being able to discretely manage those audiences and have those conversations."
The decision to break loose of the show floor came down to a combination of two things, Bruzzo said.
"We found ourselves in the third year of living what it means to be players first," he said. "And we talked about what it means to be pioneering."
The decision to do this started following last year’s E3 during the company’s debriefing. Following this year’s show, the studio will come together to see how well this approach worked.
Bruzzo added that he believes the concept of where E3 is actually located — traditionally seen as the LA convention center — is expanding. And not just because of EA; the people running E3 are helping to expand the show’s footprint too.
"We think this is good for everyone," he said.
The Entertainment Software Association has been toying with the idea of opening the show, in some way, to the public for years. Most recently, that has meant an increased presence of influencers and "prosumers."
Last year, Gallagher said, E3 invited 18 of the top 20 YouTubers to the show. This year E3 will have 75 of the top "voices in media" at the show. The ESA even constructed a lounge for them, as well as space on the show floor, to better help them with livestreams and such.
The group combined have an aggregate reach of 300 million people.
"We’ve been on this for a long time," Gallagher said.
The E3 Twitter managed by the ESA is the only Twitter handle in the world for a trade show with more than one million followers, he added.
"That’s bigger than CES," he said. "That’s bigger than Comic-Con. It stands alone with that degree of followers."
The addition of a space for social influencers isn’t the only change coming to the show floor. There are a lot more mobile games, and VR gaming, on the floor as well.
Last year, there were 70 mobile game publishers showing off their goods. This year there will be 90. Augmented reality, virtual reality and mixed reality gaming had just six companies at the show two years ago. Last year that number jumped up to 27. This year it’s at 53.
Gallagher balked at the idea that the show is swapping out bigger, better known publishers like EA for relatively small studios on the show floor.
He pointed out that 80 percent of consumer revenue on Apple’s iTunes comes from games. About 90 percent of Google’s Android software sales is games.
"We’re quite aware of the impact and reach of mobile," he said. "It’s part of the evolution of our industry."
Ultimately, he said, it’s up to the ESA to make sure that E3 isn’t homogenized and that there is a good mix of a variety of different sorts of games on show each year.
Finding the right balance is also part of the reason E3 doesn’t simply throw open its doors and go completely public.
Since returning to LA, E3 organizers have kept an eye on the cap they maintain for attendance at the show. Last year, they allowed it to float up to 52,000 people.
"That worked very well," Gallagher said. "I would expect to see 48,000 to 53,000 this year.
"We’re maximizing the buzz, but also making sure the show works."
Another reason E3 hasn’t been opened to the public is because the LA convention center simply doesn’t have the space for a huge number of people and exhibits.
"The LA convention center of today is not conducive to mass engagement," Gallagher said. "If you put another layer on this, you need space for consumers, walkways, safety precautions. If you do that, we have to cut 100 exhibitors."
Last year, the ESA signed a three-year deal with the convention center. Gallagher said the association plans to revisit things when that time runs up.
"One of the reasons it’s three years is because the LA convention center and the city have told us that the convention center will be reconfigured and remodeled by 2020," he said. "We need to have more hotel rooms too."
E3 brings in an estimated $40 million in revenue to the city of LA each year, Gallagher said.
"It’s the biggest trade show in the city, when it comes to economic impact," he said. "They are very aware of that impact. Other cities are too."
Among the cities that might have the space to host such a large convention are Orlando, Chicago, New York and New Orleans.
"Those are different options which we are constantly in conversations with," he said.
EA remains at the show, or at least very nearby. Disney isn’t attending because they recently left the game development business. This year, Activision is showing its games in publisher’s booths.
Gallagher says that E3 is alive and well, just evolving along with the industry.
If — and he never sees this happening — the show were to die, the ESA would live on, he said when pressed.
Michael Pachter, managing director of equity research for Wedbush Securities who watches the industry, said he’s more excited about this E3 than any of the last several.
"I am dismayed that big players like EA are moving offsite."
"We have likely hardware updates from Sony and Microsoft, hands-on VR from Oculus, Sony, HTC and Samsung, and we should have a lot of new games announced," he said in an email interview. "I think that the show is pretty healthy, but I am concerned that EA’s decision to do its own thing could hurt E3 over the long term."
The big annual show will remain relevant as long as the industry supports it, Pachter said.
"I think the industry needs a showcase, and I am dismayed that big players like EA are moving offsite," he said. "I think it’s important for all of the big players to support the industry; if EA wants to do a consumer show, they should do it in ADDITION to E3 instead of in lieu of E3."
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