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Why a Smaller E3 Isn’t the End of the World (And Isn’t Actually That Much Smaller)

On the evening before E3 kicks off in Los Angeles with the EA and Bethesda Sunday press conferences, many are wondering how this year’s show will be affected by so many publishers pulling out of the event. With the likes of EA and Activision no longer occupying their traditional booth space in the South Hall of the L.A. Convention Center, what does this mean for the future of E3, and how will this affect gamers? The answer to the first question is complex, but without a doubt E3 will need to evolve in the next few years if it wants to remain relevant. More on that in a bit. You may be surprised to hear that the answer as to how this all affects gamers is, in fact, very little.

Everything Old Is New Again

Back in 2007 many publishers within the industry realized that the annual industry trade show that had been born out of the basement of the CES back in 1995 had grown a bit out of control. Budgets for booth exhibits were sky-high, and the attendee list to this once-exclusive industry event had grown so that anyone with even the most tenuous relationship to the industry could attend. That year, the show was downsized, and the venue changed from the L.A. Convention Center to a string of hotels and the Barker Hangar in Santa Monica.

I attended the show that year, and I can tell you, that was no E3. The meetings and demos at the hotels were quiet, almost formal affairs, reminiscent of the meeting rooms above the show floor at the convention center. And the exhibition floor in Barker Hangar was a shadow of the usual E3 show floor. The industry quickly realized it had overcorrected.

It is true that prior to 2007 the show had grown more extravagant year after year, with live bands, skateboarding exhibitions on an indoor halfpipe, and many other gimmicks meant to wow show goers, and all of this took attention away from the reason the people were there in the first place: the games. Yet the industry saw that year that the spectacle was what garnered the attention of the mainstream press. Having a reporter stand in front of a hotel in Santa Monica isn’t nearly as compelling as having them stand in front of a real-life Warthog with Master Chief sitting behind the wheel. It was crucial to have one large show where big mainstream press outlets knew they could send their reporters to learn about the biggest games every year to inform their viewers (many of them parents) what would be coming out that holiday season.

In many ways, this is still the case, which is why I don’t buy into all of the doomsday headlines saying E3 is on the way out and will be dead soon. There will always be the need for that one big event every year for both the enthusiast and mainstream press to come together in celebration of games. Whether or not E3 remains that event depends on how quickly they can adapt to the changing needs of publishers to help meet both their business goals of the show, as well as their marketing needs.

The Games Market Is Changing

When it comes to the business needs of publishers and first parties, these have changed dramatically over the years, and this is due to a variety of changes to the games business in general. E3 used to be one of the only opportunities each year for retail buyers from stores like Best Buy, GameStop, and Target to fly to one place and see what games they should stock on their store shelves that holiday season. However, the importance of E3 as a venue for this has diminished for a few different reasons.

An Increase in Digital Sales

Digital sales represent a larger share of the total games market. The owners of these digital storefronts (Microsoft, Sony and Nintendo on console, and mostly Valve on PC) are already familiar with the games coming to their platforms, and don’t need a show to educate them on what is coming later that year or next year. Also, with digital sales there is no need to order any games at all. You don’t stock anything. You just put a game up and people download the files. If anything, the only reason the owners of the digital storefronts need to see games is to know which ones to give priority to in their storefronts, and place their bets on the games they think will sell the most.

The Rise of Mobile and Indie PC Games

Mobile and independently published PC games on storefronts like Steam now represent a large share of the overall games business, yet neither mobile nor indie PC games have a huge presence at the show. You may see the occasional mobile game featured on the show floor or in a press conference (such as last year’s Fallout Shelter announcement), and there is an Indiecade section, but in its current state, E3 isn’t set up to feature these types of games.

Finally, for the traditional retailers that are still in business, there are many other opportunities outside of E3 to see games. Many publishers do roadshows to retail partner offices to demo their games in person. And no doubt many retail buyers are benefiting from a trend in the industry that has also been great for consumers: betas.

Betas and Early Access

Betas used to be a chance for developers to work out the kinks and bugs in their games with a limited, trusted audience in order to get it ready for a bug-free launch. Alphas used to be early tests hardly anyone except members of the development team and their friends and family got to play, because they knew that games in such an early state could be rough and leave a bad impression, as they were not great representations of the final product.

Nowadays, betas — and crazily enough even alphas — are increasingly being used more and more as marketing tools. Games now offer closed beta access as pre-order offers, and it seems like every week there is an announcement for a game that shattered records for the number of people that played in the open beta.

Similarly, programs such as Steam Early Access let consumers pay for the privilege of playing a game in its early — often broken or incomplete — state. Fans who think a game has potential get to play the game early and feel like they are part of the development process, and developers get instant feedback from consumers, and bug testers that actually pay them, instead of the other way around. It is a win-win.

… Except for shows like E3, which used to be the only places people could get their hands on a game early, or at least watch a member of the press play a game early. Why do that when you can just wait a few weeks to play the beta yourself? The days of E3 being the only place to see games in an early state are long gone, but remarkably this is a change that has benefitted consumers, as it has resulted in them being able to get their hands on games in an early state, and have a direct dialogue with the developers and publishers of these games to provide feedback.

Publishers Are Reaching Consumers Directly

Another industry trend is for publishers to create avenues to directly speak to consumers. We first saw hints of this with the big press conferences that take place before the E3 show proper begins each year. These events are nothing more than one long commercial for everything that publisher will be selling for the next few years, yet the press conferences are the most talked-about thing at every E3, even though they take place far away from the actual show floor.

Publishers have extended this direct-to-consumer approach to things like streams or YouTube promotional videos. Many publishers have in-house editorial staffs or community teams that create content to speak directly to consumers. This is content in which they can completely control the message, and ensure these hit the necessary talking points and remain on brand. The need to have people come to a booth on an E3 show floor is diminished when you can just tune into the publisher stream and learn everything about an upcoming game directly from the horse’s mouth.

Consumer Days and Events

While E3 has remained an industry-only event over the years, several consumer-focused events have grown in size to begin to rival E3. Shows like PAX East and West, Comicon, and Sony’s own PlayStation Experience are all geared toward the people buying the games, and are again opportunities for publishers to speak directly to consumers. Even Gamescom, the European equivalent to E3, has days open to the general public.

The fact that these consumer events are spaced throughout the year provides an additional incentive to developers: They no longer have to adapt their development schedules to deliver a new build or demo in time for E3. Now, they can simply look up the consumer event that aligns with their current development milestones, and deliver a build on time for that event.

The Future of E3

In order to adapt, I foresee that E3 will eventually take an approach similar to Gamescom, with a few consumer days, and a few days exclusive to industry members and the press. They are already toying with the idea with this year’s E3 Live consumer event taking place down the street from the convention center. That feels very much like a half measure on the way to eventually opening up the show floor to consumers for part of the week. Hopefully, that will be enough to bring back some of the big publishers like EA, who would then no longer need to hold consumer events such as EA Play on their own.

So what does all of this mean to gamers? Again, not much. Even if it is uncertain where these games will be showcased, one thing is certain: Great games will continue to be released every year, and if anything consumers will get them in their hands earlier than ever before through consumer events, betas and Early Access programs.


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Matthew Allen

Matthew Allen is Executive Editor, Games at Fandom. He's been working in the entertainment industry for longer than he cares to admit, at companies like 20th Century Fox, Activision, and Ubisoft. He's been playing video games since he could pick up a controller, and is Fandom's resident professional wrestling expert.

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