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Industry Insiders Discuss ESA, E3's Future
Posted by Kotaku US Edition at 7:40 AM on May 3, 2008
What's the fate of E3, and of the Entertainment Software Association? It's worth examining in light of recent events. This morning we broke the news that two major publishers, Activision and Vivendi, have decided to take a pass on the event and exit the trade association, while other companies have withdrawn their E3 attendance as well. At the same time, the ESA appears to be facing stirrings of industry discontent with the ESA's leadership, namely its current president, Mike Gallagher.
E3 is not the boon to publishers that it once was, says Penny Arcade's director of business development Robert Khoo, who as the organiser of the PAX fan expo clearly has an interest, to say the least, in how things turn out.
"The reason that E3 imploded in recent years was because the publishers felt that it turned into this sort of pissing contest between them... where they were trying to figure out who could one-up each other," Khoo said. "They all thought to themselves that it just wasn't worth it."
The controversial decision to re-format last year's E3 into a smaller, more toned-down event was what Khoo calls "a self-correcting measure by the members of the ESA," in an effort to address its constituency better.
"I would imagine that that show is still trying to look out for what the publishers want - that's the whole goal of that trade association, which is to deliver the needs and try to figure out what their members actually want."
Neither Khoo nor Penny Arcade are ESA members, so he couldn't speak to whether the association is acting optimally to assure its members' best interests. "The real question is whether a show like E3 is something publishers want," Khoo said. "I guess Activision, Sierra, Blizzard, Vivendi feel that is not the case."
Earlier today we reported that several companies skipping E3 blamed their departure on "business issues," which analyst Michael Pachter pinned on poor timing for the July event, inconvenient to those companies' fiscal calendars and overlapping with times during which they must observe a "quiet period" and avoid communicating with investors.
"That blackout period is definitely interesting," Khoo said. "We don't really deal with that at all, just given the timing of our show, because its smack dab in the middle of the quarter. I'm sure that is a genuine concern, but since the third quarter ends at the end of September, it doesn't affect us at all."
According to Khoo, the years where publishers knew what to expect from E3 appear to be over, and that's hurting the event and potentially the ESA by association. After last year's "transitional period," quite a bit looks still to be up in the air, he said.
"It's in flux, and since publishers have that level of uncertainty, that is an unattractive trait to have going into a fairly large investment not knowing what you're going to get out of it."
Several industry sources expressed the same opinion as analyst Pachter: that Gallagher's lack of involvement in the industry not only results in poor planning and poor communication regarding E3, but may weaken the ESA's power to serve the video game industry in the long run.
When prior president Doug Lowenstein gave his final, impassioned speech at DICE 07, he vented his frustration at developers and publishers who refuse to defend their creative work when it's controversial, saying, "Don't duck and cover when the shit hits the fan."
But that's largely what Gallagher did when the association failed to publicly defend Mass Effect during the infamous Fox News "SeXbox" controversy. In an interview with GameDaily, he promised to "support the thrust of the industry activities and the reaction of the video gaming community," but refrained from taking any public position on behalf of the ESA.
However, plenty of the major publishers, including Capcom, Take-Two and EA, continue to support both E3 and the ESA. "It seems that at least four very large members are on the floor and doing press conferences, and it seems like a fifth unaligned company is doing a large event contiguous to that," said EA's Jeff Brown, VP of corporate communications. "That means that there's going to be no problem getting a crowd into LA for E3 this summer."
For the first time in several weeks, Take-Two is in agreement with EA on something: "As a member company, Take-Two Interactive supports the Entertainment Software Association, its leadership and its efforts on behalf of the industry," said CEO Ben Feder. "Mike Gallagher has done an outstanding job as president of the ESA and we look forward to participating in the E3 Media and Business Summit this July."
"No plans to drop out, no issue with Mike, no comment," Capcom said, when asked for their thoughts on the usefulness of the ESA and the fate of the event.
Atlus USA is one of the companies declining to participate in this year's E3, but spokesman Aram Jabbari stopped short of placing the blame on the ESA. "The nature of the show changed when they changed it from a consumer show to an invite-only press show," he said. "A lot of things have changed, but our participation doesn't have to do so much with the changes... we just chose not to exhibit this year and we do wish the ESA and all the exhibiting companies the best of luck."
NCsoft said its refusal to attend E3 was related to a timing issue with their internal development schedule and not with any conflicts about E3, but PR manager Mike Crouch declined to comment on potential issues concerning the state of the ESA. "One of the primary functions of the ESA is to manage E3," Crouch said. "And we still believe in E3, and we would have gone this year had the timing worked out for us. In that regard, we don't have anything negative to say about the usefulness of ESA."
"We would have definitely found E3 useful had it fit into our schedule this year. The judgment would be the ESA serves its purpose as far as we're concerned, as far as E3."
Comments (AU Comments · US Comments)
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Sporty23
Posted 8:37 AM 3/5/08
@RRRansom:
Pretty much. The merger isn't complete yet but Vivendi pulled out and currently they are the parent of Blizzard.
Doesn't meant we wont hear anything 'around' E3. Just not at E3.
Sporty23
RRRansom
Posted 8:26 AM 3/5/08
I haven't been able to catch the other topics early enough, so I'll ask here: Does Activison mean that Blizzard, and therefore Starcraft 2/Diablo 3, won't feature at E3?
RRRansom
SilentPredator
Posted 8:21 AM 3/5/08
So E3 is in July now? Does anyone know the reason(s) behind the move? That just seems like a stupid mistake to me. If a bunch of companies are in such a blackout period, how hard is it to find that out and not schedule the conference around that?
SilentPredator
Sporty23
Posted 8:14 AM 3/5/08
I agree that the pissing contest is a vital part of the industry.
If a developer wants to achieve greatness they need to know what the competition is doing right and wrong. To avoid making the same mistakes and being just another one of the crowd. If they only try to do cookie cutter clones of best sellers a genre will stagnate.
I think some developers just got pissed they were always overlooked due to hundreds of games on the floor and only a handful would stand out. Setting up their own shows helps resolve that but the industry needs a major trade show.
If Gallagher is the problem then they need to get a new head. Closing the branch that handles litigation is dangerous in todays "Save the children" political mentality. It's not smart to leave defending the industry to just a few journalists.
Sporty23
Grey Gecko
Posted 8:13 AM 3/5/08
im trying to figure out what started all this...was the E3 2006 crappy press conferencess-es? Miyamoto's master sword? Jacko Thompson? =/
either way, i want the old E3 back
Grey Gecko
Jonax
Posted 8:10 AM 3/5/08
I feel bad. Watching this all go down is like lying on a deckchair on a nearby ship, watching the Titanic hit an iceberg and sink. While eating popcorn.
That I only knew today about Lowenstein retiring as ESA president should say how much of an impact Mike Gallagher seems to have currently, but I'm not sure whether he can be considered responsible for the way E3 seems to be going.
E3, as most of us old-timers remember it, seems to be dead. Long live the continental conventions.
Jonax
dead_red_eyes
Posted 8:04 AM 3/5/08
I used to see quotes and press releases by Doug Lowenstein all the time when he was prez. It seems that Mike Gallagher can't even fill half of one of Doug's shoes when it comes to speaking out and defending the game industry. That's just sad. It's even more sad that he didn't do anything about the Mass Effect controversy.
This also makes me think about our current Surgeon General. When I was younger, there used to be tons of reports and press releases by the Surgeon General, and I hardly see any more of it these days.
dead_red_eyes
karasu is my homeboy
Posted 7:57 AM 3/5/08
I loved the loudness and competitive spirit of E3.
I hate that all the developers and publishers are deciding it's not worth it anymore. It was a lot of fun and exciting. Sure, we'll get great games no matter what, but E3 was a blast and something to look forward to when you knew big announcements would be coming.
The death of this seems selfish to me. So they can save some money, not having to decorate booths and hire staff? Oh well. Bring it back and keep it going, please.
karasu is my homeboy
Cunder
Posted 7:07 AM 3/5/08
@Fareo: The Industry (specially for gaming) should always be about a pissing contest. If someone comes up with a genre of a good test. You better dang know another person gonna go out and try to up the other game it's against.
This industry and E3 should be about a pissing contest cause it's not about the developers watching these things it's the dam consumer looking for the next best game.
Cunder
Fareo
Posted 6:56 AM 3/5/08
E3 was for the fans, its was an even to look forward too, sure it was a pissing contest, it always was the industy is a pissing contest. taking alway the glam and glitz of E3 takes away E3 peiod, untill we get the old E3 back nobodys gonna give a damn about it anymore.
Fareo
krln99
Posted 9:01 AM 3/5/08
E3 needs to die. It's long outlived its usefulness. I'd rather game companies spend money on the games themselves rather than the hype surrounding the games. Resurrecting in a half ass form was a bad idea. Hopefully, the big company boycott kills it once and for all.
krln99
jambe
Posted 10:03 AM 3/5/08
Why are game developers pulling out? Didn't they want a smaller E3 in the first place?
jambe
Robotube
Posted 10:02 AM 3/5/08
Imagine if there really was a pissing contest at E3. That would be just epic to see Kaz Hirai and Satoru Iwata standing next to each other, arms akimbo, firing a stream across the LA Convention center floor.
Robotube
D00mM4r1n3
Posted 9:51 AM 3/5/08
I preferred "booth-babe" E3 with insane Nintendo lines, rather than "behind closed doors" E3. The sex injected expo helped build excitement for upcoming releases.
The one side benefit of last year's E3 has been greater exposure of 1st & 2nd quarter games. Media has gotten desparate for news, so they're reviewing more titles that would normally get overlooked, and hyping more 3rd party titles as well.
D00mM4r1n3
madman83
Posted 11:38 AM 3/5/08
@krln99:
I'm sorry but both Devs and publishers need the hype for a game. E3 was the perfect place to start building that hype. You can spend all the time and money you would of saved into the game it won't matter if none of the consumers are interested or don't even know about the game. Would Gears of War have sold as well as it had if they didn't have any hype for the game before it was released?
Wether you like it or not thats what these shows, previews, and hands on do. The publishers know this thats why they take the time and money to put on and attend events like these.
madman83
exstrat
Posted 2:02 PM 3/5/08
@madman83: First E3 is an insider only even, to be able to attend you have to be apart of the game industry unless you of course have big bucks to fork over. Second if you knew the cost just to advertise at E3 you would piss in your pants. So as far as advertisement for a game, E3 & the ESA do jack shit for anyone. The only value in advertisement is news and videos that are web casted on the web from E3 shows, which does not even require an E3 or the ESA to for companies to do so. Vivendi & Activision are only saving themselves a buck by not being apart of the ESA. The ESA is also seeing a huge decrease in company attendance due to price and return, especially since E3 changed as of last year.
The only public show is E for All. Look how successful that turned out.
exstrat
madman83
Posted 2:31 PM 3/5/08
@exstrat: I wasn't saying that what they did was wrong I was commenting on the fact that he said they should save all that money and put towards the game and not worry about showing stuff off. I was saying that Activision and Vivendi are still going to spend that money on their own shows. And yes the new Insider only E3 isn't working but look at the hype they were able to build for the Wii at the last public E3. Are you going to tell me that if Nintendo didn't attend or didn't spend that money on getting hype for the Wii it would be where it is right now?
I agree the E for All and the Insider E3 aren't working. But devs and publishers still need a platform or show to build hype from. It may turn out that all the companies will turn to haveing their own show or event.
I thi
madman83
D Mitsuki
Posted 4:36 PM 3/5/08
E3 was really in the spirit of fun rather then anything else, you all remember going to somebody talking about all that pre rendered stuff sony showed you right :P In a buisness type way, it has no value almost at all, because if you announce a game and it doesn't suck balls people will genearly get to know about it and it will be on website's etc, and you can hold your own press confrence's, so what is e3 for? epic fun and big gaming giants playing hot panado, if you take out all the fans to make the nade, all your left with is a boring event that we will see on the internet and it will be no diffrent then reading the avrage article of that new game you had your eye on or, didnt
D Mitsuki
mac-phisto
Posted 11:29 PM 3/5/08
score one for all the hardcore fans that are repeatedly dismissed as being "out of the mainstream". looks like they were keeping at least one aspect of the gaming culture alive.
what cracks me up is that pretty much any other industry in the world would sacrifice babies on an altar if it would guarantee the type of attention that e3 got from gamers.
& they threw it all away.
mac-phisto
dunetiger : the mekuri master
Posted 1:16 AM 4/5/08
I don't know anything about Gallagher, but Lowenstein's shoes are pretty large ones to try and fill. That being said, you have to remember that a good idea only lasts as long as the people who are passionate about it still exist to helm the project. The second the next guy steps in, you have to question if he's interested in the job or the paycheck. Maybe it's different styles of management, but the decline to comment on Fox News is a hint of the whole P.C. non-involvement corporate mentality that permeates business all over the West. I can't stand it, really, but that's the way things work.
When things first start out, nobody wants the position except the guy who believes in the project. He's the guy that builds it, that makes it worthwhile and proves the project's worth. Once it stabilizes, he moves on because he's obviously too brilliant to settle into routine. The next guy? Normally just some political ladder-climbing stiff looking to line his pockets and nothing more. It happens.
Like I said, maybe it doesn't apply to Gallagher, but clearly, he's lacking the vocal ferocity of Lowenstein and that's something that an industry built by fun-loving overgrown kids can get behind.
dunetiger : the mekuri master
Hirmetrium
Posted 3:02 AM 4/5/08
As a qualified bullshiter myself, I don't think Khoo has any right to talk about E3 or ESA - if their not members, they don't know whats going on. Funny how Kotaku frowns down upon people who talk out their asses about games/events/things they haven't played/done/used/seen before, yet they allow somebody whos done something possibly similar to give a full page of yawn speech.
E3 is no longer of interest to publishers because it doesn't get the fans foaming at the mouth like it used to. E3 was a massive ego boost on smaller companies who needed the attention, and gave everyone a chance to show off their amazing new titles. Since the public can't see those now, they go to PAX instead...or whatever. How would I know? I'm speaking from a fan of big game companies and the little people who have something new to show off. I saw little come out of E3 last year, yet all the years before it was the highlight of my summer.
Hirmetrium
Jenstar
Posted 4:35 AM 5/5/08
I have 3 letters for you all, P-A-X. August, go sign up now. TYVM. See you there.
Jenstar