he news spread across the web like wild fire.  No more E3?!  E3 is down sizing because developers pulled out?!  The ESA responded with a generic statement that caused just as many questions as the rumors did.  So we go straight to the source and get the concrete facts from the President of the ESA, Doug Lowenstein. Find out exactly why E3 needed to change, and what exactly is in store for the video game industry’s most important show.

Game Informer: All of these rumors broke out over the weekend, and we recently received the announcement from your office, yet it’s a little vague in terms of what is going to happen with E3.  What’s the deal with the show from your perspective?

Doug Lowenstein: The deal is, is that the event in terms of it being defined as an event with a big trade show floor is not going to be what we’re doing any longer. We’re evolving the event into something that’s more narrowly focused on ensuring quality interactions with top tier media and other audiences. The companies want to ensure they get quality time with during an event like this.

E3 has just become a little too much background noise during the event and increasingly difficult to conduct business there. So, how do we evolve that fundamentally important event into something that continues to serve and hold value for the industry going forward?

GI: Some of the reports said that some major exhibitors had pulled out of the show as it was. Is this a reaction to how that happened?

Lowenstein: Honestly, it’s just people making stuff up. First off all, we hadn’t started pre-booking the show, so it wasn’t anything people could pull out of at that point. Secondly, every year there are rumors of people pulling out of the show, and I field calls every year about “ten companies are dropping out of E3” and then low-and-behold, they wind up going back in.

I have no doubt that companies – as they do every year – I talk to them, companies are constantly talking about, “Does it make sense to be part of this event any more?” How is E3 meeting their needs? All those kinds of questions. I think that’s all part of the normal flow of business. So I’m sure that you may well have heard rumors that companies were evaluating their presence at E3 next year because they do it all the time. To me that’s a far cry from saying that people have made a firm decision to leave.

GI: What prompted this decision? Is this something that you’ve been thinking about for a couple of years based on feedback from the publishers?  Why was this decision made?

Lowenstein: We discuss all the time the show every year. It is a big part of what the ESA does. It funds a lot of what we do. So as a matter of just prudent business practices on an annual basis we’re always assessing E3 and talking to our companies.

Every year at E3 I go around and virtually meet with all of my board of directors and talk about a number of issues. About the industry and the issues we’re dealing, including what their state of mind about E3. So, out of those discussions emerge a sense of the need to look real hard this year to whether this is the right time to evolve this event that was more targeted and focused.

So we began those discussions internally with some of our members and after this year’s show eventually brought some ideas to the board and they were approved.

GI: We’re getting the sense that it’s going to be smaller in terms of attendees. It’s going to be more focused on professionals in the press, and less fan oriented.

Lowenstein: Absolutely.

GI: Can we also expect less ostentatious booths?

Lowenstein: Absolutely, because there aren’t going to be booths.

GI: How do you envision the “new E3” setup?

Lowenstein: I think it’ll take place in several different ways. First of all I think you’ll still have the console press conferences. I don’t know if you were at Microsoft this year where they did the press conference and then did the breakout at the Roosevelt Hotel. They had the demo kiosks and suites and so forth. I think you’ll see a lot more of that.

I think all of the first parties will continue to have big press conferences. And then emulate in some shape or form the kind of setting that Microsoft had. I think there will be opportunities that will be unique now for some of the third parties to have their moment in the sun if, which we haven’t been able to do because the way E3 has sort of evolved – you have these big console press conferences and then the show launches. It’s just this “every man for yourself.” We’re going to try to create much more dedicated spots in the program for third parties who want to get out particular information, showcase their product lines and so forth, and have that opportunity, as well.

GI: Do you think there will be individual company press conferences?

Lowenstein: Yeah, I would expect.

GI: As far as the actual conference, how will that be set up?  Will it be at a hotel with meeting rooms?

Lowenstein: Yes. We would expect that there would be a couple of headquartered hotels. There would be suite-based settings where companies will have suites, and will invite people in on an invitation only basis to meetings.  In those suites there will no doubt be product demo areas, and so forth. We’re not talking about 5,000 square foot suites. We’re talking about something on a much more modest scale that’s much more conducive to business like exchanges.

GI: How many days do you envision it going on?

Lowenstein: Right now we look at it as a three day event.

GI: Is it actually going to be three days, because E3 right now - the conference itself is three days, but for most of us it ends up being a lot longer.

Lowenstein:  That is exactly part of the problem. Yes, the intent is to make this three days. You’ve nailed yet another reason why we thought that this is a time to rethink this. I mean, this is supposed to be a three day show and it’s turned into a seven to ten day show. Not only does that mean a huge amount of additional resources and time are allocated to it, but it just elongates the whole process and makes it much more exhausting (laughs) and much less focused.

The intent is that all of the events will be integral to the three days, and that there won’t be events that are breaking off on their own that would not be part of it.

GI: Obviously it won’t be in the convention center, but will it still be in Los Angeles?

Lowenstein: Yes. Absolutely, we’re committed to keeping it in LA. I’m looking forward to working with the city to figure out exactly how we can take advantage of various resources here. Those discussions will go on for the next several months.

GI: Do you think the timeframe of the show – mid-May – will continue?

Lowenstein: No we’re going to move it to July.

GI: Is that mid or late July? 

Lowenstein: I would guess in earlier in July just for any of a number of reasons. That just reflects the fact that products are going to be much more advanced. Part of the problem with the May dates is it basically says that what you’re going to show at E3 has to be done in April. You’re not seeing as many playable demos and products are not as far along and so when you go there to look at stuff you’re not seeing a product in the most optimal shape. That allows you as a real expert in this area sort of get a good feel to what it will look like and play like, whereas a later date allows us to do that.

GI: E3 has been for industry and press only, and it was always sort of easy to sneak in.  There was always obviously a lot of people that got in because they were fans.  How do you manage to enforce that?

Lowenstein: I think it’ll be a lot easier to enforce that in a new setting. This will be in a hotel based setting. It’s not going to have a big show floor. Since it’s by appointment only, by invitation only, it’s going to be awfully difficult for people to find their way in. Even if they wind up in the hotel lobby, in doesn’t necessarily mean they’ll end up in a particular member company’s suite without having an appropriate invitation and credentials.

GI: Obviously, it’ll make it cheaper for companies. Are you trying to make it more affordable in general?

Lowenstein: Our goal is to make it effective and efficient. I think that one thing that people can agree on at E3 is that as wonderful as the event has been there is now probably a mismatch in the total amount vested in there, and the return. I’ve read on some of the sites that say, “It’s cost cutting, and the industry is tightening its belt.” And that’s bulls**t. It’s not about cost consciousness and tightening. It’s about rational business. It’s not that people don’t want to spend the money. People spent the money for a long time at E3 and it made sense. It doesn’t make sense to spend that dimension and scale of money at E3 anymore because of how things have evolved.

So the issue is what do you spend and how much are you willing to spend to get a good return? This isn’t about cost cutting, this is about efficient use of resources. Companies are more than willing to spend the money as long as they are confident. Look none of this know how much it’s going to cost to execute this new event! So the assumption that there is going to necessarily be a huge massive savings – well we don’t even know that. I think there will be, just be virtue of the fact that you don’t have the huge investments in booths and floor space and hundreds and hundreds of people that come in for days and days and the time to man them.

GI: Are you worried about the show losing some of its importance?

Lowenstein: My interest isn’t whether the show is important to people. My interest is “Does the show do what our members want it to do?” The show will continue to be important and valuable to the extent members use it in a way that it’s perceived as a “must attend” event. If Sony, Microsoft, and Nintendo – when other major companies continue to use it as a venue for allowing people to see product for the first time and announce major strategic decisions, it’ll be a hugely important part of the industry calendar. If they choose not to use it for that, but for other strategic purposes, it’ll be what it’ll be.

-Matt Helgeson