Moving E3 cost ESA $5 million

Industry trade group paid a pretty penny in event-cancellation fees to try out Santa Monica location for a year.

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For years, the Electronic Entertainment Expo was the Entertainment Software Association's big moneymaker. The 2006 event, the last one in the Los Angeles Convention Center before the show was radically downsized (and temporarily moved to nearby Santa Monica), raked in $18.5 million, or 64 percent of the organization's annual revenue.

However, downscaling E3 cost the ESA more than just reduced exhibitor fees. As Kotaku reported this week, the trade organization's latest annual IRS filing--which has been obtained by GameSpot--lists nearly $5.4 million in event-cancellation fees for the year in which it made the change.

When the downsizing was originally announced, the ESA said that it would make up the lost income by increasing membership dues, and the group's reported membership fees reflected such a spike. For the year ended March 31, 2007, membership dues approached $4.5 million, up from just over $1 million the year before.

Income from ratings fees was also up, albeit not as drastically. The ESA-owned Entertainment Software Rating Board brought in $3.5 million for the year, up from just over $3 million the year before. None of the ESA's remaining income-producing activities produced more than $1 million in either year.

The organization's report for the year ended March 31, 2008 is not yet available.

E3 may be downscaled even further this year. Although the event is returning to the LACC, it will only take up a portion of building. Furthermore, notable mainstays such as the merging pair of Activision and Vivendi Games--as well as LucasArts have cut their ties to the ESA, with the former two companies not attending this year's show.

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