E3 will stay in LA for at least 3 more years

E3 will remain in LA for at least another three years.

The Electronic Entertainment Expo isn't the largest trade show dedicated to video games and the people who make them in the world, but it has become, over its 18 year history, the face of the video game industry. E3 is where the promise of new consoles is unveiled and the potential of current technology is explored. And for most of its history, that spectacle of video games, gaming technology and artistry has been held in downtown Los Angeles, but the threat of a new football stadium and concerns over price gouging risked a move out of the city.

Today, though, the organizers of the annual trade show confirmed to Polygon that E3, its nearly 50,0000 attendees and the $40 million the show brings to the city each year, will remain in LA.

"We have our clear path forward for the next three years in Los Angeles," Michael Gallagher, president and CEO of the Entertainment Software Association, told Polygon. E3 2013 will take place in the Los Angeles Convention Center from June 11 through June 13 as part of a deal struck last last week with the city, convention center and Anschutz Entertainment Group.

We have our clear path forward for the next three years in Los Angeles

Los Angeles Mayor Antonio Villaraigosa said he was thrilled that the show is sticking around.

"My office was committed to doing whatever it took to keep the largest annual conference that the City hosts here for another three years," he said. "I personally joined in the negotiations, and we worked with all parties to ensure the needs of E3 would be met. The City is grateful the Entertainment Software Association continues to view LA, the entertainment capital of the world, as the ideal location for the world's premiere video game convention."

Timothy J. Leiweke, president & CEO of AEG, echoed the mayor's sentiment.

"ESA's commitment to remain in Los Angeles is a critical endorsement of Los Angeles as one of the nation's most important convention destinations."

The news of a three-year contract comes after nearly two years of mostly quiet, behind-the-scenes negotiations between the four groups. While LA has been home to E3 for all but three of its shows, the association began investigating other possible locations about two years ago when the city announced plans for a new football field in the heart of the city nestled among the convention center, the Staples Center and the LA Live entertainment complex.

While West Hall will still be around for next year's E3, plans for the AEG-backed Farmer's Field call for it to be torn down and rebuilt as an extension to the center's existing South Hall between the 2013 and 2014 shows, a construction project that threatened to impede the flow of convention-goers and the annual video game trade show. Once construction of the new extension is finished, the wall between it and South Hall will be removed, creating a single, massive hall.

"The concerns really came as you saw E3 begin to flex and show some strength within the past 24 months," Gallagher said.

The show, which suffered through a one-year move to Santa Monica in 2007 that saw a drop in attendance from a peak of 70,000 down to 10,000, has quickly recovered, stabilizing at a cap of 45,000 to 50,000 attendees a year. Having to deal with construction during a show, threatened to sideline that progress.

While Gallagher said the association hoped to reach an agreement with the city after their contract for the show ended with the 2012 E3, they had to plan for alternatives.

"It takes about 24 months to turn a show," he said. "They're like aircraft carriers. They can't turn on a dime."

So the association put the city and convention center on notice that they may not be returning and began to scout other locations. While Gallagher declined to say where else the association was looking, the LA Times reported last month that San Francisco, New York, Chicago and New Orleans were among the potential future sites for a displaced E3.

Gallagher did say that the talks outside of LA were "very serious."

"They had to be," he said. "The quality of the experience for E3 has to be very high, our industry has very high standards. We can't just meet those standards, we need to exceed them."

While the construction was chief among the issues discussed between the association and the Los Angeles Mayor, AEG and the convention center, the ESA also had other concerns, Gallagher said. The association had over recent years received complaints of what Gallagher described as "opportunism" at some of the venues around the convention center. Some of the hotels and restaurants in the area were hiking their prices for rooms or swapping out menus for high-priced meals, when the convention center rolled into town.

"If E3 is the highest return on investment trade show in LA we deserve better than that," Gallagher said.

So among the negotiating points with the three LA groups was a request for more hotel access for show attendees and a promise that restaurants wouldn't hike their prices for the week of the show, something the city, AEG and the convention center managed to guarantee.

"We worked through those issues on hotel access to ensure we would have access to more hotels at a higher quality and a fair price," Gallagher said. "And they agreed to avoid the gouging that we had received a few examples of."

The biggest concern, that looming construction, was also settled. The city, convention center and the backers of Farmers Field promised to put on hold any construction that would impact the show or the ability to access the convention center in the days surrounding E3.

"The mayor and EAG and the leadership of the Los Angeles Convention Center put our heads together and have come up with a three year contract we are signing," Gallagher said. "This is very, very beneficial for E3, exhibitors, for the ESA and consumers.

"Our show needs to have a runway for growth and LA is one of the few cities in the country that can project that pathway."

Good Game is an internationally syndicated weekly news and opinion column about the big stories of the week in the gaming industry and its bigger impact on things to come. Brian Crecente is a founding News Editor of Polygon.