The Last Word: July 31-August 4

Before the week even began, news began to spread over the weekend that the Electronic Entertainment Expo--the multimillion-dollar annual game expo taking place each May in Los Angeles--would be substantially reduced in size and scope. Monday saw those reports confirmed: Entertainment Software Association president Doug Lowenstein announced that E3 would indeed undergo a massive reworking.

The show, Lowenstein told the Wall Street Journal, would cut the number of guests from last year's 60,000-plus to about 5,000, and it would relinquish its May command of the Los Angeles Convention Center in favor of smaller, "more intimate" hotel conferences and meetings in the Southern California metropolis. The show's name even got rephrased, from the Electronic Entertainment Expo to the E3 Media Festival. GameSpot spoke with Lowenstein about the ESA's reasons for the megashow's downsizing--one of which was that the large production had simply worn out its welcome.

If Monday's news was the bombshell, Tuesday's was the fallout. By then, industry players of all kinds had time to react. Most of the larger companies, like EA and Microsoft, welcomed the changes to the long-standing expo, while smaller development studios and media outlets were more skeptical of the ESA's sweeping changes.

Developer Blizzard has been riding high for nearly two years thanks to prolonged success of World of Warcraft, its massively multiplayer online role-playing game that consistently tops sales charts. But job-related happenings pushed the company to the news front starting on Wednesday, when job descriptions posted on Blizzard's Web site revealed it was looking for game designers skilled in real-time-strategy development. The positions fueled speculation that the game developer--famous for its Starcraft and Warcraft real-time-strategy titles long before World of Warcraft became a household name--was turning its effort toward a follow-up to Starcraft or Warcraft III.

The PC-centric company also internally shuffled some of its console game developers around Thursday. Blizzard explained that the reworkings were an effort to refocus "key members of its console team on other projects," including the World of Warcraft expansion pack, The Burning Crusade. Its console debut--Starcraft: Ghost, a first-person shooter set in the Starcraft universe--has already been delayed indefinitely.

Whereas last week consolemakers Nintendo and Sony released their quarterly financial earnings, a trio of third-party publishers announced their results this week. Electronic Arts, the world's largest publisher, saw its revenue go up 13 percent, but the company still lost $81 million for the quarter, compared with a $58 million loss last year. Still, EA's results weren't all bad: The company's $413 million in revenue beat analysts' expectations by $78 million.

Meanwhile, number-two publisher Activision also lost a bundle of money--$18 million--but, like EA, it beat expectations. Unlike EA, Activision's revenue fell, from $241 million last year to $188 million. On the bright side, the company revealed that its foray into selling Call of Duty 2 maps over Xbox Live Marketplace has been a success--raking in nearly $1 million. During a conference call with analysts, Activision also revealed it had a slew of new franchise entries--Call of Duty, Guitar Hero, Tony Hawk, and James Bond--prepared for 2007 and 2008.

Midway wrapped up the bevy of earnings reports Thursday when it said that, yes, it had lost money, but the company's profit was in-line with estimates. A loss of $31 million overshadowed $25.9 million in revenue, as investment in next-generation development--including adopting the Unreal Engine 3 into the company's games--stole a chunk of the profit.

MONDAY
E3 renamed, rescheduled, and drastically resized
Q&A: ESA president in the E3 hot seat
Confirmed: No Unreal Tournament 2007 till 2007
Judge nixes Minnesota game law
Crytek hunting for PS3 programmers

TUESDAY
Spot On: Industry reaction to the new E3
Shenmue Online resurfaces
EA reports $81 million quarterly loss--but beats expectations
Mortal Kombat heads to Wii
Square Enix president looks ahead

WEDNESDAY
Rockstar secures court win over strip club
Blizzard hiring RTS developers
Street Fighter II hits Xbox 360
Q&A: Bizarre Creations' Gareth Wilson
New Red vs. Blue storms XBLA

THURSDAY
Midway's Q2 falls in-line
Activision losses less than expected
New Call of Duty, Guitar Hero, and 007 coming in 2007-8
Blizzard yanks staff from console project
Gears of War turning November 12

FRIDAY
Federal lawmakers target ratings
PGR3 Xbox 360 bundle headed to Canada
Stranglehold pushed back to 2007
Study: Consoles elicit varied psych responses
Medal of Honor enlists for PSP

RUMORS OF THE WEEK
Aussie mag opens book on Vice City Stories?
7-11 contest divulges Wii price at $299?

RELEASES
Shippin' Out 7/31-8/4

CHARTS
US console charts: July 23-29
US PC game charts: July 16-22
UK game charts: July 23-29
Japan game charts: July 24-30