Q&A: ESA president in the E3 hot seat

Doug Lowenstein explains the rationale behind the dramatic changes that will see the one-time massive trade show become a much lower-key conference.

ESA President Doug Lowenstein

Summer is usually a relatively quiet time for the game industry. The din from the annual Electronic Entertainment Expo (E3 or "E3Expo") has died down, the Tokyo Game Show has yet to begin, and the fourth-quarter release avalanche is months away.

But that traditional tranquility was shattered over the weekend, with numerous reports that the pivotal event in the game industry was undergoing a radical makeover. Today, the Entertainment Software Association (ESA) confirmed that next year's E3 will be a far cry from the massive spectacle the world's media focused in on when it overran the Los Angeles Convention Center in May.

In the official press release, ESA president Doug Lowenstein would only say that "The new E3Expo will take shape over the next several months." He was more forthcoming to the Wall Street Journal, saying E3 2007 will attract around 5,000 industry insiders to at least one downtown Los Angeles hotel--essentially turning it into a large-scale D.I.C.E. summit. The event will also carry a new title--the "E3 Media Festival"--a possible indicator that it may involve entertainment other than games.

Given that E3 has been the center of the annual game-industry news cycle for the past 12 years, its radical restructuring has left many in shock. To get some answers, GameSpot caught up with Lowenstein, who took time off his hectic schedule to give a glimpse of what the future of E3 will be.

GameSpot: Can you confirm the July 2007 date that I've been hearing?

Doug Lowenstein: I confirm that we're going to do this event in July, we don't have any dates in yet. I would guess it would be the early part of July, but that's not firm.

GS: We've heard exhibitors complain about costs in the past. Was there a straw that broke the camel's back this year?

DL: No. Exhibitors have talked about costs for years, and that's nothing new. I think there are a lot of things that are coming together. We began a strategic planning process within the ESA looking at how to best fund the organization on a long-term basis, how do make sure that we're putting in place the kinds of programs with the kinds of resources required for the industry to accomplish its objectives. Part of that was also looking at events like E3 and how they fit in.

So, I don't think there's any one thing that drove this. I think it's just we reached a point where this was going to happen sooner or later. It could have happened two or three years ago. There's nothing magic about this year, I think. It really is a question of looking at where it was 12 years ago when we launched it, when you had an industry that didn't have a lot of visibility. Sites like yours didn't even exist at the time. The major mainstream media didn't even cover it. So the industry was looking for something that really galvanized attention around the industry. It was also a retail-oriented event where retailers would come and they would write orders and companies would be able to say, "I invested a lot of money and I sold a million units, and it was a great show."

Obviously the industry gets a huge amount of visibility from a cultural and entertainment standpoint now that it didn't 12 years ago. Retail has consolidated, and the whole process of interacting with retail has changed. Companies are seeing retail 12 months a year. This is not an order-writing show anymore. So I think it's gradually become clear that the primary thing that's driving the event is the media.

So, If you were starting an industry right now, and one of the things you needed to do was to find a way that you can get your stuff in front of the press in a way that's really effective, you wouldn't create E3. So we said, "Well, if that's true, then what would we create? What would we do that allows people to have the kinds of businesslike meetings that they need, that would also allow the personalized interaction of the highest quality?" It became clear to us that evolving into this kind of event was clearly the right thing to do and it was the right time to do it. We've just come through these hardware launches, which is obviously always a kind of a big part of E3, and I think it really just became almost a natural time to kind of make this decision.

GS: OK. And we've heard that some ESA members were willing to pay up to $5 million apiece in order to allow the ESA to recoup money lost from exhibitor fees...

DL: I don't know where you guys hear stuff like this. What is clear is that by moving from a trade show which funds the ESA to an event that doesn't, we're going to have to have an alternative source of funding for the ESA. That will be [membership] dues. Since nobody's actually decided what the dues are--because we haven't made any number of critical strategic decisions about how much money we actually need over the long run--for people to be talking about how much money they were or were not willing to spend is really kind of stupid.

GS: So they haven't been charged dues in the past?

DL: No, there are dues, but they're pretty nominal right now. They'll be considerably higher going forward. But there are plenty of companies who said that they are more than willing to step up to pay significantly greater dues revenue to fund the critical work that ESA is doing in piracy and government relations at levels far beyond what they're paying right now.

GS: Have the costs and legal battles like your recent victory in Minnesota played any part in the decision to get rid of E3?

DL: No, no, no. Don't confuse the two. I think that the board is committed to a vibrant, strong, well-funded ESA. And that certainly means having the resources to continue to fight these legal battles, if that continues to be necessary. But the decision on E3 is really a business decision and it's looking at something that we've done for a long time and saying, "What makes sense for this event as we look at the industry as it is structured and we look at the landscape in 2006 and 2007?" The answer is we need to evolve it into something that's more strategic and more focused. It just makes good business sense. And this decision would have been made if we weren't chasing court fights. It would have been made, regardless of what was happening in the external government relations and in the political world.

GS: It might be a little early for you to have these details yet, but do you have an estimate of how many exhibitors to expect?

DL: No, I don't think we've really faced that yet. Without a show floor per se as of now, I'm not quite sure exactly whether there will be an exhibitor base, if you will. Going to a suite-type setting obviously means there are sort of a finite number of participants. Exactly what that means in real numbers I couldn't tell you yet. I don't know whether we're going to create space for companies in a ballroom or something where we have 10-by-10 booths or things that are obviously much more manageable and simple than anything you'd see at E3 today. I think those are all questions we'll be taking a look at and we'll have a lot more information out over the next several months.

GS: Do you know what will happen with the conference program and the retailer VIP program?

DL: No, I don't. I certainly think we're going to look at whether having a conference program fits into this new event and if so, how. It's certainly on the table. As for the retailer VIP program, I doubt if it'll survive in its current form, because we're moving to an invitation-only kind of event. But that's speculation on my part.

GS: And we heard there would be maybe an anchor hotel for the event?

DL: Yeah, well it is all subject to working with the people here in LA and with our members in further designing and structuring the event. The hope is to have at least one, maybe more than one headquarter hotel where we can basically take over the properties and set up the companies in suites that make sense for the kinds of meetings they want to occur. Those will be the focal points and we'll probably have a big room that will be a state-of-the-art AV room for press conferences. That'll be sort of our central operating point. Then there'll be offsite press events like the console companies do now. There may be other offsites, as some companies may decide that they're going to take advantage of the new format to do media events in other parts of town in other ways that we can't quite yet envision.

GS: There are two concerns I've heard from people that I've talked to so far. One is that smaller publishers and developers might have a harder time getting noticed as a result of the redesigned E3. The other is that the industry benefited from the spectacle that would attract mainstream media and attention from the outside world.

DL: Well, on the first one, without knowing exactly how the event's going to be structured, I think it's premature to sort of say that smaller developers are going to be adversely affected. Secondly, most of those developers are hooked up in some way, shape, or form, to a publisher, so if they're working on products that the publishers want to showcase then they'll be there. Third, there are a lot of other events around the world and around the US that offer opportunities for companies to be seen. So I think that in the end, if a developer is working on something that eventually requires investment and partnership with a larger publisher, then they're going to be part of this event no matter how it's structured. Companies are still looking for innovative and creative products and if you've got something out there that is really hot, then I think you'll find a place to show it.

As for the second part of that question, I think that 12 years ago we needed that spectacle. But I look around today and I look at the dozens of newspapers that have people who regularly cover this industry, I look at the amount of coverage this industry gets throughout the year, and I think that the kind of event we're talking about will have no trouble drawing the media attention that it needs--unless the companies choose not to use it to make major announcements. If Sony, Nintendo, and Microsoft aren't using the event to make the kinds of high-profile, global announcements that that they've made at E3, then I think people will find it less compelling to attend. To me attendance is a function of what's coming out of the event, what's the value of it, what's the news being generated. That's going to get people there, not whether there's 500,000 square feet of exhibit space there.

Our goal is to create something that people still have fun at. I expect there to be parties around this event still and other kinds of activities that add some social and networking elements to it. I want people to have fun. I want people to be impressed with what the industry has to offer, and at the end I want them to say, "I had fun, that was some damn impressive stuff I saw, and I sure as hell got a lot of work done." If that's what we do, then we will have succeeded. That's what this is all about.

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Discussion

144 comments
i_like_evil
i_like_evil

This isn't good news for anyone but the bigwigs and E3 haters (You evil evil people). E3 is definately going to disappear altogether now. What attracted people to E3 is the fact the the public had the chance to see tons of cool new games plus live announcements ect. ect. Who honestly cares about the smaller festivals? The media certainly don't.. As a result of this, there will be much much less coverage and people will lose interest (Especially if it's becoming a multimedia festival) as there bigger and better things. There is no hype about these smaller festivals as we know that there will be a few announcements and little games on offer. I think we all know that another festival will seize the "Biggest games show in the world" title and everyone, including the Big 3 themselves will flock and showcase games there. E3 will be forgotten. Maybe forever? (Well maybe not forever, but I hope you get my point here...) ESA will only have themselves to blame. For throwing it all away. You have one last chance guys! Because afterwards.. there is no going back!!! (BTW my point is why E3 will be so overshadowed that it will be forgotten)

grimzeus
grimzeus

It'll be right back at the LACC within 3 years...mark my words.... right around the time that the LACC people fully realize "Wow, I guess these guys were really serious about taking their show somewhere else." That's what you get for being too greedy. Good for you Doug, show those SMF's who is in charge.

Safe_Bet
Safe_Bet

E3 could have easily evolved in the "Super Bowl" of the Gaming Industry, imo... The fact they are willing to throw that away boggles me, but if all they want to do is sit around and "do business" so be it.... Perhaps someone will realize the potential of a huge gaming show (open to the public) soon and we will see "the new e3" not too long from now.. They want a trade show? I want a spectacle...

Talgrath
Talgrath

Silly ColussusKiller, nobody cares about online petitions except for those who sign them. Anyway, I think this is a good move. The ESA is a business organization, after all, and it's just refocusing towards what the businesses it represents need. There's plenty of big, flashy shows now, E3 was just the biggest and flashiest.

bunnyboy
bunnyboy

The more I think about it, the more I like the direction of the new E3. Business gets handled at the concention, then the partying can take place at the strip clubs and hotels like it's supposed to. Having a huge hype-driven geek holiday is nice, but we can honestly live without the hype and this will be a more respected industry as a result.

MadGamer132
MadGamer132

[This message was deleted at the request of a moderator or administrator]

ComputerNDogs
ComputerNDogs

Damn the ESA president. If I was in charge, I would say no to change. Keep it as it is.

metdevthegamer
metdevthegamer

No Doug, just get rid of all the fake celebrities that act like they play video games, that's all you need to do. Keep it big.

Valen_Ca
Valen_Ca

Well I guess if developers and publishers don't like this new E3, or whaterver it is going to be called, they could always go back to CES, I mean wasn't that the big expo in North America for games before E3 came about?

jaefrmbk2k
jaefrmbk2k

E3 was gettin' so lame. this is the perfect time to pare daown all that nauseating fluff.

faxekondi3
faxekondi3

This sucks i love E3 too much I HATE ESA they are RETARDED

murlow12
murlow12

Oh well, I'm over it. I get most of my game info from other sources, anyway.

suttersandman
suttersandman

Well I guess it's back to going to CES. Hopefully some game developers will go back there so atleast we have something worth going to in the states.

gamer_10001
gamer_10001

If there is still big news, and small developers can show their games, I don't see a problem with this.

leimeisei
leimeisei

Well this came out of nowhere... You can expect that E3 will probably go away altogether. The media will lose interest in attending. More and more developers and publishers will decide not to build booths. The show will just be boring and dull to visit, and no one will like it. And won't that just be weird? Basically every game announcement comes at E3. New console announcements come at E3. Public awareness about everything will probably be very low if the show goes away. Now, why did companies stop supporting the show? Well, first off, your booth will only get attention at the show if it is big and fancy. To make it big and fancy, you're probably talking about dumping millions of dollars into a booth you will use for less than a week. Plus, you need people to set it up and tear it down, and to run it. Plus, you need to pay the developers overtime to get demos ready... its just lots of cash. And in the current economy, too. But all hope isn't lost yet, there is still time for people to change their minds :).....

DarekC
DarekC

Not that anyone will read my post, but I believe that this is the right course of action for the annual tradeshow. E3 has become more a playground than a business event. Lowenstein makes a great point that the original idea of E3- to garner attention from mainstream retailers and media- has succeeded beyond all expectations. But the industry itself is still young, and constantly under-fire as being too out of control. I KNOW that we are all tired of the “gaming made me do it” and “why can’t I use games to rear my children for me” stories. The only way that this is going to change (history proven with D&D, music, television and movies- each the “downfall of man” at one time or another) if for our not-so-humble industry to grow up. The garish Las Vegas-style image and attitude of the industry needs to change, and with that change will come better quality of products (Once the “flash” is gone, the product remains- and if the product remains, well maybe we’ll see less Daikatana’s or AMF Xtreme Bowling titles) and an industry that no longer has the vast pool of human recourses willing to sacrifice time, money and benefits just to “be in the industry”- (Yes, EA- this is directed at you!) Lets not be too critical of the new E3- lets see what happens.

crills
crills

one more thing i went to e3 this year and the price of a ps3 600$ the price of a wii under 300$ the price of a ms 360 400$ the look of sony and ms when no one was at there both price less ha ha they got soned nintendo put them under the wing and showed them who the father of games is wii came wii won

Bio_Spark
Bio_Spark

Well people, there's always the possibility that if this descision turns back on them and bites 'em in the arse, (it probably will) that the following E3 will be returned to it's former glory.

tommytcph
tommytcph

WTF? After this, E3 is going to go altogether. No one will care about it, and there will be no smaller devs there or anything. When Nintendo revives SpaceWorld and goes to TGS, and Sony just goes to TGS, Microsoft will make their own and E3 will be gone forever

LexLas
LexLas

I personally think that there are trades being made on the floors with private parties and it's taking business away from the actual retailers or something of that sort and the companies aren't going to allow it any more. This is the only thing that comes to my mind. What else would be a good reason to bring down a power house full of money and huge audience ?? It has to be financially related ??? Who Knows,, but it blows ????? Well I guess I will be glued to the tv awaiting some kind of coverage ??

Kempatsu_basic
Kempatsu_basic

Is it just me, or does it sound like Doug Lowenstein wants to control how we see the event. Think about it - no outside people allowed? It was always like that but moreso this time than before. I think they want to do a quality/show control whereas if people from the outside aren't coming in to criticize it, then big companies like Sony (who got showed up by Nintendo and MS this year) won't have to fear about putting a half assed press conference together (like this past E3) because when this crap gets displayed and aired - it will be edited horrendously without any outsiders seeing whats really going on. Trust me, the press conferences you saw at this past E3 are the real faces of the companies. (heres looking at you Sony). And I love how in the first question he denies only once that this redo of the format is only based on the rising cost of this show. Now, that may be a variable but I'm positive Sony and Microsoft had a say in this. There is no show if Sony, Microsoft and Nintendo aren't there...so SOMEONE MUST'VE OF SAID SOMETHING.

jedimas64
jedimas64

so what if we dont go, we still feel the excitement of E3 anyway. ESA is just shooting themselves in the foot. Because smaller show means less announcements,less games to showcase,plus this brings in money due to hotel stays and flight costs. Keep E3 alive guys!

PatchMaster
PatchMaster

Typical. Everyone loses except the bigwigs. All they have done is taken away our "2nd Christmas". No good.

Zazoom
Zazoom

that man is the next osama bin ladin of the video game world

Seymour47
Seymour47

Boooooo! Now I really could care less about E3. What's the next biggest show? TGS? I just can't care quite as much about that because it isn't a level playing field like E3. Sony and Nintendo own TGS, which isn't surprising. So, E3 was the big show where all the big wigs could duke it out. Now, Microsoft will come up with some big event that only themselves and some developers can attend to try and counteract TGS.

crills
crills

is it me or did the other companys start hateing cause nintendo rocked e3 and no one went to there boths so now there hateing atleast nintendo rocked the last real e3 sony and m s need to learn real gamers want gameplay over graphics no one care who many polygons u have if it plays like trash

RuminaX
RuminaX

I looked forward to this event so much every year. The last couple years especially as it became larger and better then ever. This downsize has killed that and the average gamer can't enjoy it now as much as they used to. This is a bit depressing.

paradyme777
paradyme777

Dangitt Now E3 is even further off then before.

mr_squibble
mr_squibble

Well, he never said there will not be a huge annual gaming industry event in the future geared toward the public and the media. It just won't be E3.

Rumstocker
Rumstocker

Everyone is in E3 denial. You know you loved it. If you didn't go, myself included, you at least loved Gamespot's coverage. This is a sad day for gaming.

Legir
Legir

I just hope smaller games don't get shafted.

cheesytaco69
cheesytaco69

As long as I can get the lastest info and upcoming games from it then it's still cool.

BallGame
BallGame

Thanks for typing during the interview. Good and distracting!

bcfish
bcfish

Smart moves by the ESA. With less crap to deal with this should bring more legitimacy to the industry. Past years it looked kind of like a flashy strip club with videogames hidden away somewhere in the spectacle. Showcase the games and the hardworking people who bring them to us, and everyone wins!

nujack
nujack

The media outlets will still exist ( gamespot, ign, G4, Spike,etc) in some form at the new show so we'll still get the goods. and besides how many of us out of the millions of gamers in the US get to go anyway. I remember a time when we got E3 info only from gaming magazines. No videos, demos, booth babes, or swag.

winterblink
winterblink

"That is no fun for the public." What makes you think E3 was originally intended for the public in the first place? It's a trade show, and I applaud them shedding the ridiculous waste of space booths and the hep-c infected booth babes in favor of something more pared down and focused. For us, that means more signal, less noise.

-Aegis-
-Aegis-

How exactly will something new arise? It all boiled down to game companies not wanting to shell out millions for show floor space and meet deadlines for an event that offered no real marketing advantage. You mean to say they didn't want to pay for E3, but they'll pay for the same thing with a different name? Stop blaming the ESA, guys. It was large game companies who didn't want to shell out tons of cash for something that didn't really boost their sales. To be frank, that's not a bad business decision.

nujack
nujack

I find it funny that people have been complaining about the hype fest that the show has become and that they've come to a consensus and agreed with them, people are still complaining!! I dont understand people at all!

ajm03865
ajm03865

I agree with amogley. WIth the number of people being reduced to 5,000, that leaves possibly 55,000 people that are willing to to spend some money for an E3 like experience. The scaleback of E3 will create a vacuum, something new will arise in it's place. Lastly, I think "Media Festival" is simply just a way to say, "A Festival for the Media and Press", not multimedia like some readers and the reporter seem to infer.

-Aegis-
-Aegis-

In recent years, E3 has become nothing other than a financial drain on larger game companies with no real marketing advantage offered in return, since the only people who attend or keep track of E3 are hardcore gamers who would get their gaming news regardless.

Danthegamingman
Danthegamingman

I hope this is a huge failure and some other Event becomes the new E3, because E3 right now is dead without the industry and publics perception of hype.

arfy2
arfy2

Spidey008 well said man. Mr Lowenstein, I don't like you!

DogOfDeath
DogOfDeath

This doesn't make sense to me. Yeah, while we don't NEED the show floor, that was the core of E3, where regular gamers could hop down to LA and check this stuff out for themselves, and talk to the developers and try out fresh demo's for themselves, rather than read it online, and play them later. I've never been to an E3, but I had planned to make the trip for 2007....and now that looks like it'll be void. E3 was the most exciting time in a gamer's year, a virtual christmas in the middle of the year. Now the ESA has taken that away from us because they THINK we don't want or need a show floor? F**k you ESA, If it ain't broke, don't fix it. E3 was a huge event for 12 years, and I personally looked forward to mid May more than other signifgant events throughout the year. Hopefully it won't take long for these people to take their heads from their asses and realize we don't want it to change.

spidey008
spidey008

This is truely a historical moment in gaming. We are the pioneers and the E3 will not be forgotten.

rhsu
rhsu

They don't really need the floor show. Most of the major announcements are made prior to E3 so this decision does make sense.