Nintendo has announced that it will one have one game playable at E3 2016, The Legend of Zelda. Fans and journalist alike are beginning to feel that E3 is a dying beast, a monument of a time that as long since passed. Beyond Nintendo, EA, Activision Blizzard and Disney have pulled out of the event. EA is also holding their own event, EA Play, alongside E3. There are even rumors going around that E3 may not be around come 2017. So, let’s look and see if E3, the biggest video game trade show in the US, is really terminally ill.
Despite exhibitors are pulling out, attendance may be going up. E3 2015 had over 50,000 attendees. This was also the first time the event exceeded 50,000 attendances since 2006, after which the event was downsized. The event also did better with social media. Twitch reported that their E3 stream had 21 million unique views and 840,000 peak concurrent views. These totals far exceeded 2014 results based on graphs provided by Twitch. Based on this data, it appears that E3 is on an improving trend. At a minimum, the numbers confirm that the event will not immediately dissolve.
Of course, this doesn’t consider 2016 number, which will not be released until the end of the event. But how do other events compare? The Game Developers Conference (GDC) saw record breaking attendance for 2016 with 27,000 attendees. This figure is slightly up from 2006 which saw over 26,000 attendees, for which General Manager Meggan Scavio stated “As the conference enters its 30th year, we reflect on the tremendous growth in the medium of video games.” 2016 attendance numbers aren’t out yet, but based on the trends, it would appear E3 2016 would be a big event
Companies Pulling Out
Based on everything, it would seem that E3 is growing, yet rumors and telling speak of an end of E3 as publishers pull out. So why are they abandoning E3? I think EA’s move is the most telling. Instead of having a booth at E3, the company is having a separate event called EA Play which will run simultaneously alongside E3. It will even be held at Club Nokia which is less than half a mile from the Los Angeles Convention Center where the event is held. The event will come with all the trimming of an E3 showing even with a press conference. While goer will have to pay for this event, it is open to the public.
In essence, there are far better ways to reach consumers. Consider Nintendo’s shift to the Digital Presentation. Sure, it is not as cool as a large stage show, but it is functionally superior. Nintendo can control how content is presented, and can provide developer insights without anyone leaving Kyoto. Like EA’s event, Nintendo’s content is now better positioned to reach consumers. They can watch the live presentation and live demos right from their computer. In fact, Nintendo really doesn’t have to go to E3 to do any of this.
The other major issue is, undoubtedly, the cost of the event. Phonejoy founder Martin Kessler stated in an answer on Quora “We paid $10,000 for 200 sq ft in 2014, which is the smallest booth space available at E3.” He further stated that it would cost between $13,000 and $16,000 more for professional booth designers. Semiformal Studios told Engadget that their 600 square foot booth could have cost between $300,000 and $500,000. Based on the 3,000 square feet Nintendo has reserved. Based on an equivalent price per square foot, Nintendo could spend anywhere from $1.5 million to $2.5 million for just the booth space. Of course, the total cost for the event will likely be much more when all is said and done.
The high cost of the event is likely due to multiple factors. First, companies don’t pay for the cost of the floor space. They would also pay a profit margin to the ESA, the company that runs E3. For EA, it makes too much sense to hold their own even. Not only will they only pay for the Nokia theater, but the ticket proceeds got to them, not the ESA. It doesn’t help that California is one of the most expensive states in the nation, ranking the 6th most expensive state to live according to USAToday.
Alternatively, 2016 could simply be a bad year for E3. Activision only has two games coming out this year to showcase: Skylanders and Call of Duty. Nintendo’s only big games coming out are Pokemon Sun/Moon and The Legend of Zelda, which are both are still being shown at E3 in some form. Wargamming, makers of World of Tanks, is ducking out for strategic reasons stating “E3 just doesn’t fit our current direction.” Perhaps 2017 will return to being the pinnacle of gaming as it has previously been, but that remains to be seen.
So is E3 truly dead…? Probably not. It’s unlikely the biggest trade show in the industry will just disappear overnight. The biggest challenge facing E3 is reaching the public. If anything EA Play is a response to this problem and companies will continue to opt out of E3 unless the event can accommodate. E3’s equivalents, the Tokyo Game Show in Japan and Gamescon in Europe, allow non-media people in. How exactly to address these problems is another issue in of itself. The truth remains the industry is changing. From my research, there is one thing that many articles pointed out were that technology is forcing E3 to change and the biggest issue is not being able to reach customers. It is definitely going to be one issue the ESA needs to address.