With E3 Cancelled, Indie Developers Are Facing An Increasingly Difficult Year

E3’s official cancellation has been expected for weeks, but the actual act of shifting a physical event to an online-only presence is still an enormous undertaking. It’s one that’s doable for large publishers like Sony and Microsoft, both of whom have run their own online and offline showcases at various points throughout the year.

But for indie developers looking to secure deals with smaller publishers or the first-party platforms, E3’s cancellation poses a greater problem: the prospect of a long, hard winter without funding, or even the opportunity to pitch.

E3 has always been a show with two sides. One side is the conferences, the livestreams that regular viewers – and investors – tune into. Once the conferences are done, the show transitions to more of a hands-on event, with press, influencers and content creators experiencing and reporting on demos from the show floor. Behind the scenes, publishers and developers meet up to hash out deals, whether it’s to fund an individual project, fighting for exclusivity on one platform or another, or just laying the groundwork for plans two, three or more years in advance.

Because E3 is so dominated by the biggest publishers, regular gamers often see it through the lens of what Xbox, Nintnedo and Microsoft are doing. But it’s also an important show for smaller studios to arrange meetings with larger brands and platform holders. And Mike Bithell, the British indie behind Thomas Was Alone, Subsurface Circular and John Wick: Hex, pointed out how big the problem is for smaller developers.

It’s not just that E3 has been cancelled. It’s not that E3 was the biggest show for indies, but without the Game Developers Conference and no opportunity to secure funding for future projects at E3, many studios are facing a black hole in their funding.

The impact of a year without GDC and E3 in terms of projects unsigned and deals undone, is gonna last for years. It’s a largely invisible influence, but I don’t know of many devs above a certain budget level that this hasn’t had any effect on.

— Mike Bithell (@mikeBithell) March 11, 2020

As Bithell pointed out in a reply, it’s not so much that cancelled events prevent developers and studios from holding remote meetings. It’s that humans just don’t feel comfortable approving multi-million dollar budgets over a Skype or Slack call; they might be OK arranging the meeting to have that discussion, but when you’re about to greenlight a project that might not be released for two, three or four years, you want to see that person in real-life. Studios can travel to individual publishers for important meetings and milestones, but that’s also a huge drain on expenses, especally if airlines refused to refund a studio’s flights and accommodation for events like GDC, PAX East and potentially E3.

Lauren Clinnick, managing director at Lumi Interactive, said the effect of GDC and E3’s closure, and the potential for bans on more conventions, could result in a “generation loss” of funding. “There could be a generation of less deals being signed, or a lag time in these deals being introduced by the chaos caused by adjusting (rightfully so) to responsible business practices during a global pandemic,” Clinnick told Kotaku Australia.

“Just the “˜stress debt’ of cancelled plans and financial recoup efforts has an effect on business and ability to focus on development,” they said. “I’m immensely privileged that the cancellations haven’t impacted the work of my team too greatly, but i’m still losing an hour or two a week just on understanding what is happening and trying to put appropriate policies in plan to look after my team. I’ve had to delay making a decision to commit to an important work trip planned for May, and it’s unclear if or when i’ll be able to make that decision.”

Chet Faliszek, the former writer on Half-Life, Portal and now a founder of his own studio, mentioned that he’s heard of “a few horror stories” already affecting companies that were hoping to raise capital.

I know a few horror stories already… if this had hit last year when we were raising, I would have lost my mind.

— Chet Faliszek (@chetfaliszek) March 11, 2020

Agreed, I think it will have serious ripple effects way down the line. Hoping to find some more ways to get investors/publishers and developers together so the business of games can keep moving. Working on a few things.

— Justin “Dark Yoda” Berenbaum @Home until ? (@scslug) March 11, 2020

While E3 is far less visited by indie devs than GDC is, especially so for international devs, this still means another opportunity for pitches, meetings, announcements, and opportunities gone.

Whether this was good for E3, or a nail in the coffin, well, we’ll see in a year. https://t.co/Kid3h3LW4k

— Rami Ismail (@tha_rami) March 11, 2020

To their credit, Devolver Digital said they would still forge ahead with their Direct-style livestream “and possibly more”. What that more comprises won’t necessarily fill the void missed by deals not done, but as one of the publishers who directly solicits pitches from smaller studios, it’s in the company’s interest to find something that can replace the dealing and wheeling of E3.

The week of E3 has always been a big part of what we do and are genuinely bummed about the cancelation of the event itself.

Lots to juggle but right now we plan on having a livestream Devolver Direct / press conference and possibly more. pic.twitter.com/nGDAEsIzUs

— Devolver Digital (@devolverdigital) March 11, 2020

It’s not just business related to the development of games, either. E3 was a place for the video game industry to connect with Hollywood. It’s a place to work out licensing deals for things like toys, board games and other spin-offs, and there’s always the random meetings that end up changing lives.

“With these events being cancelled, especially if you’re early in your career, you miss out on the serendipitous meetings or folks coming across you on showfloors, chatting in line for a talk etc,” Clinnick told Kotaku Australia. “For folks that had designed a major PR beat around the cancelled events, they’re now going to need an altered approach.”

But the news does have a potential upside. One of the uglier open secrets of the industry is just how much time, most of it crunching, developers spend getting a demo ready for E3. Not all of the work into that demo necessarily ends up in the final game, meaning devs can spend months, sometimes as much as half a year building a vertical slice that is often purely for marketing.

“The demo was not actually built properly – a lot of it was fake, like most E3 demos,” one developer working on Anthem told Kotaku. “There was a lot of stuff that was like, “˜Oh are we actually doing this? Do we have the tech for that, do we have the tools for that? To what end can you fly? How big should the world be?”

When Uncharted 4 was in development, Naughty Dog’s E3 demo was their biggest milestone for 2015. According to Jason Schrier’s book, Naughty Dog would often hold meetings once a day to review progress. Developers were working late nights and weekends on small details. Dave Pottinger, who worked on Halo Wars at Ensemble Studios, explained how the team worked from early 2007 building a demo exclusively for E3. “The E3 demo was a pretty kick-ass demo but not something that was representative of the gameplay. It was just entirely built for E3,” Pottinger said. CD Projekt Red referenced the amount of crunch developers do in an interview with Kotaku last year. “We’ve been communicating clearly to people that of course there are certain moments where we need to work harder”like I think the E3 demo is a pretty good example”but we want to be more humane and treat people with respect. If they need to take time off, they can take time off,” CD Projekt Red co-founder Marcin IwiÅ„ski said.

Of course, that’s no consolation to small indies, since they don’t have the staff, backing or resources to spend months crunching on an E3 demo in the first place. It’s not uncommon for indie devs to crunch for a major PAX, given the amount of potential buyers that might walk past their stand. But even those events are under threat: the next PAX is scheduled to hit Seattle in late August, a city which has shut down schools and banned large gatherings to contain the coronavirus.

“Because of the COVID-19 outbreak, large industry events may be untenable for the foreseeable future,” Nintendo said overnight.

Even morale is being affected, as developers won’t get the boost they usually do from large shows as fans respond to a first reveal or new gameplay. “Large gathering events are also important for those of us who work in small teams or solo, or in far away countries (hi Australia) because we often use the events as a big social and inspiration recharge,” Clinnick said. “It’s more lonely to lose these opportunities to catch up with folks we may only see once every year or less.”