Is E3 Still Relevant?

I'm your host, Jonathan Strickland. I'm an executive producer at I Heart Radio and how Stuff Works and I love all things tech and In mid November, Sony, the company that makes the PlayStation four game console, announced it would not be taking part in the two thousand nineteen E three Conference E three, which essentially stands for the Electronic Entertainment Expo, although I think they just call themselves E three these days anyway. It's a big annual industry event

that takes place in Los Angeles, California. It's not the largest video game industry conference in the world. There's one called Games Common Germany that has about three hundred thousand more people attending it than E three, but E three is usually viewed as one of the most important video game conferences of the year. It puts a spotlight on video game companies and titles, as well as hardware manufacturers.

So let's take a step back to talk about the brief history of E three before we explore the whole Sony story here. So, before there was an E three, most video game manufacturers would showcase upcoming consoles and titles at c e S. C e S is another one of those conferences that used to be known by its name Consumer Electronics Show, but again they kind of shy away from that and just called themselves c e S

these days. There was no dedicated conference for video games at that time, and after the video game crash of nine three, it was kind of a question as to whether the home video game market would even be a thing ever again. But then Nintendo came along with the Famicon also known as the Nintendo Entertainment System, and the

industry would claud its way back to stable ground. But for about a decade, c e S was the one big trade show where companies could show off their stuff, and this was actually pretty tough because there's a lot that's going on during c e S, so standing out from all the other things that are happening at that same time as a really big challenge. Then we flash forward by more than a decade really in there was

an organization coming together. Originally it was called the Interactive Digital Software Association, but it would change its name eventually to the Entertainment Software Association or e s A. The e s A as the organization that created E three. It organized a brand new trade show dedicated solely to the video game industry. At the time, video games were not nearly as prominent in culture as they are today,

so the goal was multifold. It was to give video game studios and console manufacturers a dedicated event where they didn't have to buy against microprocessors and TVs and refrigerators for attention. They would be able to hold meetings with each other and do business. They would be able to promote things to the media, and they would be able to bring some attention to an industry that otherwise was

fairly obscure. Apart from the you know, legions of dedicated gamers out there, no one was really aware of it. So that first event in uh in N had approximately fifty thousand attendees. I've seen estimates between forty and fifty thousand, really, and it was an industry and press event, which meant the general public was not allowed to attend. If you were not media and you weren't connected to the video

game industry, you were not allowed to go. This gave game developers the chance to promote their work direct to the media as well as the corporate representatives of some of the larger retail organizations. They got a chance to talk to these video game developers, and so you had these conversations where you could actually make deals where the retail representative would agree to carry those video game titles and put them on store shelves. Because in those days,

physical copy was really the only option. You didn't have digital distribution networks. So this conference it filled a very important role. It gave these video game companies the outlet not just to the media, but also to the stores that would ultimately carry the titles. So E three was

all about marketing and sales essentially. That first year saw Sony reveal the original PlayStation price and release date in the United States, and Nintendo would show off the Virtual Boy, which would go on to become one of the most

hand flops in video game tech history. Sega also announced that it would start shipping the Sega Saturn console to retailers during the event itself was meant to be a big sort of press reveal, and there were big video game companies like e A, Capcom, Acclaim and more that

were at that first E three. It was considered a big success when it was all over and the e s A would continue to hold E three and the next two events were in Los Angeles, but then negotiations with venues did not go so well for the next

couple of years. So typically, if you're gonna throw a big event, you have to make arrangements years in advance to guarantee the space, and the s A was unable to do that in Los Angeles, so instead E three for those two years took place in my hometown of Atlanta, Georgia. It would return to Los Angeles after and no, I never got to go to E three while it was next door to me. I was not working in the

field of tech at that time. In Sega would show off the Dreamcast, Sony gave some previews of the PlayStation two, and in two thousand, Microsoft appeared at E three for the first time to promote the upcoming premiere of the Xbox Console. In two thousand one, Sego would make its final appearance as a console maker, though it would continue to show up as a game developer, it just was getting out of the hardware business. Nintendo would show off the GameCube that same year, and the event grew year

over year until two thousand seven. That year, several exhibitors had approached the e s A with concerns about how E three was just growing too big and it was too flashy and too focused on the media. The exhibitors felt they were seeing diminishing returns, that the large number of attendees made it difficult to have any meaningful interactions with any one person because you just you were flood with people all the time. And the spectrum of media

media had grown significantly. You know, in the in the old days when it first started, it was pretty much mostly print publications, so you had gaming and computer magazines that were in some newspaper reporters that were largely the press at this event. But by the mid two thousand's, the Web had really taken over. You know, the print

medium was dying compared to the web. I hate saying that, and of course print media is still around, it's not like it's gone, but the Web was definitely taking the lead over print, and now bloggers were making up a larger percentage of the press passes. So the E s A took a look at these complaints from the exhibitors and responded by purposefully scaling back E three. So then the organization announced in two thousand seven E three would become an invitation only event, and they also it would

be limited in size. Only ten thousand attendees would be allowed to go there, including a select you from the media, and it would not take place at a centralized location like the l A Convention Center. Instead, it was spread across multiple smaller venues across Santa Monica. The response was not what the exhibitors or the e s A had

hoped for. The reduced media coverage meant that the game companies received far less attention and therefore very much less free publicity, which unfortunately was something that they had been enjoying without any fear up to that point. So they found out late in the game that the real audience for E three happened to be all those bloggers and

the media professionals after all. So after the two thousand eight conference, which was also a stripped down, more modest affair, the s A chose to return to the bigger, Boulder brassier approach. The two thousand nine conference had forty one thousand attendees, and the two thousand ten show saw game developers like Ubisoft, Konami, and e A hold their own press conferences, which expanded the media events beyond just the

console manufacturers. They had frequently been holding live conferences, but now the game developers themselves were starting to hold their

live press events. So those companies set the precedent for what we've seen over the years since, when company representatives take the stage to show off footage from previously announced games, all the way up to unveiling exclusive announcements of game titles that had previously been top secret in Nintendo chose to skip E three and it held its own presentation called Nintendo Direct with a prerecorded presentation. This marked the beginning of Nintendo sort of backing away a bit from

E three. They would come back in to have some space on the exhibition floor, but they would continue to do their prerecorded UH Direct events rather than holding a live of event. So they do still show up to E three, but they don't hold a live press conference

like Microsoft or until recently, Sony. This helps keep Nintendo games in gamers minds, and in fact, Nintendo is known for holding multiple digital events throughout the year so that it's not dependent on just one major event to impress gamers. This way, gamers tend to be aware of what's coming

out throughout the year and it's not just one big moment. However, uh some people believe that this means that the company tends to have less of an impact at E three, and that means that they don't often feature into the main conversation you'll often hear from the more recent E three is the ones like sixteen who one E three, and it usually comes down to an argument between Microsoft and Sony, which is kind of infuriating for anyone who's a PC gamer and has no interest in console gaming.

In the e s A made another big change to E three, one that was seen as either inconvenient or downright controversial. The organization opened up the conference for the first time to the general public. If you wanted to go to E three, you could purchase a ticket for between a hundred fifty and two fifty dollars a princely

some and then you could attend. That would give you access to the exhibit floor space, which meant you could line up for hours in order to get a little hands on time with an upcoming video game title or watch and a non interactive demo. Now, I was there in and I saw a lot of people waiting around for half a day to play games like God of War for about ten minutes. I can't speak to their experience. It's possible they all loved it, but to me, it

seemed like a recipe for disappointment. Would you walk away feeling that those hours in line were well spent? I guess if you were making friends in the line, that would help. As a member of the media, I could have jumped ahead of most lines if I had wanted to, but I spent most of my time observing, because honestly,

it felt kind of scuzzy to jump ahead. Maybe if my job was to cover only video games, if that was all I did, I probably would have jumped ahead, because it's the only way I would have gotten enough work done. But I cover all of technology, so I felt like I should probably just sit back, let the other video game journalists actually get in to do their jobs, and let the people who paid to be there the chance to play these games, and I would just kind

of observe. Now that brings us up to Sony's announcement that it would not be participating in the three and twenty nineteen The company will not have a space on the exhibition floor. There will still be game developers and the three showing off PlayStation games on PlayStation hardware, but there won't be a dedicated Sony space, nor will there be a live event filled with weird entertainment and video game announcements. That Sony Live event was really darn weird.

I'll explain more about Sony's thoughts in just a moment, but first let's take a quick break to thank our sponsor. Sony released a statement about their decision to skip E three, and it said quote, as the industry evolves, Sony Interactive Entertainment continues to look for inventive opportunities to engage the community. PlayStation fans mean the world to us, and we always want to innovate, think differently, an experiment with new ways to delight gamers. As a result, we have decided not

to participate in E three and twenty nineteen. We are exploring new and familiar ways to engage our community in twenty nineteen and can't wait to share our plans with you. End quote. Now, that's not that different from what Nintendo executives said when Nintendo decided to skip holding that live press event at E three. The big difference here is that Sony is skipping the whole thing, not just the live event, and E three is not the only event

that Sony has backed out of. Sony launched at their own event called the PlayStation Experience back in At that time, it was celebrating the twentieth anniversary of the PS one, But earlier in Sony executives revealed that there would be no such event this year in December. So what's the reason for that. The executives were very candid. They said, there just wouldn't be enough new games that are far enough along in their development to create an experience that

would satisfy fans. So rather than hold an event where they might have two or three new titles, many of which gamers are all are you familiar with? Because they've already seen promotional material for these games, that would they would walk away disappointed and Sony didn't want that, so they decided that for this year they're going to skip

the PlayStation Experience. One of the discussions going around online is that Sony pulling out of E three is another sign that the conference overall doesn't really serve a useful purpose anymore. It's easier than ever for companies to reach out over various digital platforms to promote upcoming games and hardware, from company owned media outlets to twitch streamers, there's no

shortage of points of contact with the general public. You could even bypass traditional media entirely and still reach an enormous audience. What's more, by leveraging some of those assets, like popular twitch streamers. Let's say that Sony reaches out to a very popular Twitch streamer and says, I'm gonna make a deal with you for X amount of money.

I need you to stream and talk about these new games, and you can be totally upfront that it's sponsored content, but you will reach a much larger fan base, and that's a dedicated fan base. And the fan base is really dedicated and they they the twitch streamers really genuine and transparent. Then the company can piggyback off the popularity of the online personality and it's an incredibly valuable marketing tool. Over at Microsoft, Phil Spencer, who's the VP of Gaming there,

had a different perspective. He said, quote E three is an incredible platform to showcase the vibrancy and creativity of the video game industry. The es A continues to expand the events reached the fans and the industry, both in attendance and online, and we look forward to what's ahead at E three nineteen end quote. Of course, right now, Microsoft is poised as the only aiming console manufacturer that

will have a live press event during E three. The stage pretty much belongs to them at this point, which could be an incredibly valuable thing. If they don't drop the ball some crazy way, they kind of win E three twenty nineteen by default. The question some people have is is it's still worth winning because meanwhile, some game publishers have also tried to pull away from E three a little bit. Ubisoft has been known to hold off

site events during E three. E A has launched a fan event that took place at the same time as E three, but a different location, so it was not connected to E three. It was their own thing. Then there's stuff like Blizzard Entertainment, which holds its own annual gaming convention called blizz Con, which started back in two thousand five. They can use that as a place to

announce big developments in their various titles. On top of those events, there are some held by other organizations that offer video game developers a chance to connect directly with fan bases. So the Penny Arcade Expo, now known as PACKS launched in two thousand four. It's a gaming culture festival. It's meant for gamers to attend, and it connects to the online Penny Arcade comic. That's the origin for this.

It was the creators of the Penny Arcade comic who said, we want an event specifically for gamers as a celebration of gaming. Today. Packs includes multiple shows throughout the year. What used to be called Packs Prime that was the original event, the one that takes place in Washington State. These days it's called Packs West, but there's also Packs South, Packs East, Packs Unplugged, which is for board games and card games, that kind of thing like physical games, and

then there's Packs Australia. Several video game developers attend events this and they give fans a chance to play demos and early builds of various games, and they'll even use those as places to announce new titles. So it kind of takes a little bit of the luster away from E three. E three is not quite as special because there are these other events that the companies are using to make these big announcements. From a media coverage perspective,

A three seems to be losing some value. There may be diminishing returns on the press coverage for E three moving forward. Now, that doesn't necessarily mean that the conference has lost all its value, because we are forgetting about all those meetings that take place at E three, Right like we tend as the media and as consumers, we tend to be very much focused on the presentations, on the video game titles, on the demos, on the booth design,

that kind of stuff, the flashy, forward facing stuff. But the stuff behind the scenes is still really important. Over at Kotaku, Jason Schreier and Kirk Hamilton's responded to a listener question to the podcast split Screen. They they said, are the listener was asking about E three's relevance? Is

E three still relevant? And their response was more about the stuff that's going on off the show floor, namely those meetings that game developers get with potential publishers, And it's at those meetings where a company might be able to land a deal so that the game they've been working so hard on gets distribution, and publishers in turn might meet with retailers to make sure the games they distribute are getting good promotion and placement in stores that

helps boost sales. They also mentioned that for smaller developers, getting the chance to share the stage with big companies like Sony and Microsoft is a huge deal. So up until twenty nineteen, Sony has been known as giving a nice stage for smaller developers. They'll feature some of these independent games in their major press conference, and that gives what would otherwise be an obscure little title an enormous

push in the larger gamer consciousness. He could turn something that would have just faded away into a cult success. Of course, this particular episode of split Screen was recorded in the summer of eighteen, before Sony had announced that it was not going to attend E three twenty nineteen, so that changes things a bit. And I also feel I should point out that the move toward digital distribution has made some of those retailed discussions less relevant as well.

There's still a lot of people who will only buy physical copies of games, but online platforms like Steam and the various console online shops have become increasingly popular options for gamers. According to Statista, two thousand twelve was the last year when physical copies of games outsold digital copies, and that year of all games sold were physical were digital. The following year those figures flipped, and every year since digital copies of games have made up an increasingly larger

percentage of sales compared to physical copies. So you're more likely to have discussions with Valve about the Steam platform than you are with Walmart about where they should put the Elder Scrolls online display. Kirk Hambleton's on that same episode i mentioned earlier, said he felt that E three was rapidly losing relevance as a media event. These days, companies are holding their own announcements and reaching large audiences

through streaming. More and more companies are following in the footsteps of Apple, which kind of defined this sort of direct marketing back when Steve Jobs was presenting stuff like the iPhone in two thousand and seven. Since that time, we've seen other companies similarly pull out of big trade shows.

Micro Soft, which once upon a time held a place of dominance at C E S for many years, Bill Gates would give the the top keynote at C E S and then uh Balmer would give the top keynote for a few more years, but the company announced in two thousand twelve that that was going to be the last year it would attend c S. It would no longer be part of this enormous trade show. And when you step back, you can kind of understand why. As these shows get bigger, it gets harder to stand out

in the crowd. When everyone is holding a press event or begging for attention, then it becomes more challenging to get any focus for your own announcements. And not only that, if you hold a specific event at a specific time, like a big trade show, then all the companies that are going to be at that trade show have to work super hard to have something to show off on a date that wasn't their choice. You know, it's not air event. They're attending the event, so they have to

work for someone else's timeline. And if you get big enough to say, you know what, we don't need to do this, you can step back, and then your company can hold its own events on your terms, on your schedule. That's a big deal. It means you can wait until you really have something cool to announce and show before

you come forward. You don't have to risk having nothing of note to show off or that you might show off something that's so early in development that there's no guarantee it will make that the rest of the way through. I have a little more to say about this subject, but first let's take another quick break to thank our sponsor. A second ago, I was talking about CS and Microsoft. We'll ce S is still an enormous show and it can easily carry on without the presence of Microsoft, and

it has. But can E three do the same without Sony? The PlayStation four has been the top selling video game console since two thousand fourteen. The PlayStation four debut toward the end of and so every full year it's been available, it's been the top selling video game console. It has sold more units every year than the Xbox One has. But this leaves not just Microsoft and then Nintendo's limited presence. There's also the enormous PC games market, so that's still

going to be part of the three. According to New Zoo, and PC games accounted for thirty two point nine billion dollars in sales, with twenty eight point six billion of that being in digital and physical copies. The other uh for something billion dollars was from browser based games. Console games took up more of the market slightly. They sold for thirty four point six billion dollars worth, so a little bit more sales in console games than PC games,

but PC games are still a big deal. However, both of those sectors were dwarfed by the mobile market that racked up an astounding seventy point three billion dollars in sales. Fifty six point four billion of that was for smartphone games. Mobile games typically don't get a ton of coverage at E three, that we might see that start to change.

The e s A announced an attendee list not long after Sony's announcement that it wasn't going to be a E three nineteen, and in a press release, the organization said, quote, among the leading video game companies already committed to participating in E three twenty nineteen are Microsoft, Slash, Xbox, Nintendo of America, Activision, Bethesda Softworks, Capcom, Epic Games, Konami, Digital Entertainment, Square Enix, Take Two, Interactive Software, u be Soft, and

Warner Brothers Interact to Entertainment end quote. That's definitely a list of heavy hitters, and while that doesn't necessarily indicate which subsidiaries will also be attending, it's good to remember that. You know, there are some other big names that are part of the umbrella that was mentioned. So for example, Take Two, which will be at E three nineteen, is the parent company for rock Star, and Activision is the

parent company for Blizzard Entertainment. Also, people have predicted the death of E three several times in the past, and so far it's still alive. So back when the conference was scaled down in two thousand seven, there were people who were saying the writings on the wall, this conference is just going to fade away, and it didn't. It came back in when e A announced it was going

to establish its own event during E three. It wasn't long before news broke that Activision was also planning to skip the event that year, and then another company called war Gaming, which is a smaller developer They make a game called World of Tanks, said it too was going to skip the event, and then Disney followed suit, although to be fair, that was likely because Disney was planning on shutting down its video game developer division, which was

called Disney Interactive Studios, and instead they were switching to a model where the company will license out Disney properties to third party developers. But we didn't really know that at that time. From the outside looking in, seeing these various companies kind of pull out of the three, it looked like it was a cascade effect, like maybe this was going to be uh the end of E three with lots of companies bailing on this established trade show.

And it may even have been what convinced the E s A to open the show up to the public in ten that by making the show accessible to the public, it would also bring pressure on video game companies to participate or risk being left out of all the excitement. So there's some who have said that that was probably

why the E s A really chose. One they could sell tick it's and make money, and two this would force the companies to participate for fear of otherwise getting the ill will of the gaming community, and thus the trade show itself would remain relevant by force. And while Wired was musing on the possibility that E three might die after Polygone would call for E three to change or die, in Brian Crescente wrote an article saying it was clear that the reasons the E s A started

E three were no longer relevant. Whereas in years past, game developers would use E three to land publication deals for the rest of the year. Polygone cited industry professionals like Sean Leyden of Sony, who said that these days those deals are done before the games are complete and well ahead of E three, so they're not happening at E three, they're happening before, and E three's mission to

bring attention to games isn't relevant anymore either. People are pretty aware of video games, and the piece pointed out that the three opening up its doors meant it was trying to be the next Packs. But Packs is still Packs and manages to work pretty darn well, so it might mean that E three is just being kind of a watered down version of Packs. Many video game journalists are guessing that Sony's announcement really means that the company is just trying to get its ducks in a row

for the successor to the PlayStation four. Sony executives already have confirmed that the company is working on the PS five, and most analysts guests it's going to come out either by the end of twenty nineteen or perhaps in and it's possible that Sony wants to make sure it can hold an event all its own to announce this next piece of hardware and not have to worry about winning

a trade show. And because they're focusing on the PS five, it probably also means they're winding down development for the PS four, which means they don't have very much to show off for the console that they are getting ready to phase out. And again, just like the PlayStation experience, it may well be that one of the reasons Sony wants to pull out of the three is they just don't have a whole lot to show off, and so it doesn't make a lot of sense to maintain a

presence there now. That could mean that in Sony would be right back at E three now with the PlayStation five, and that is just a blip in the radar. Or it might mean that more companies will follow suit and I'll like to have their own events instead of going all in together, and it could mean the E three is finally starting to unravel. Why do I think I I suspect Sony will be back in twenty unless the company just decides that it's much better to have your

own stage rather than share it with others. Uh. The real value I think is that by having a concentrated event, you get a lot of excitement that it's all focused at the same time, and you can you can get a lot of leverage out of that. But holding your own event means you can really control the focus and control the narrative. And so I don't know. I think Sony will be back in, but if they announced that they're done, I think the three might be done too.

Despite the fact that PC gaming continues on strong, it's getting stronger. Um, I just don't think that the the developers and the other companies will want to participate if there's a perception that the event is kind of falling apart. It might be one of those cases where people say the ship looks like it's sinking. I don't know if it's sinking, but let's go ahead and get in the lifeboat just in case. Well, that wraps up this episode. It was fun to kind of talk about this and

to go over Sony's announcement. Uh. It surprised me when I heard about it, and then I had to learn more and it was all have fun to kind of go down this sort of guess this estimation about whether or not E three will stick around. What do you guys think. I'm curious to hear your thoughts on it. Maybe that I'm completely off base, and maybe E three is stronger than it ever has been and I'm just being silly. I totally accept that that's a possibility. If you want to get in touch with me, you can

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