"The world of interactive entertainment has changed since E3Expo was created 12 years ago. At that time we were focused on establishing the industry and securing orders for the holiday season," said ESA head Douglas Lowenstein. "Over the years, it has become clear that we need a more intimate program, including higher quality, more personal dialogue with the worldwide media, developers, retailers and other key industry audiences." Though it is officially an industry-only trade show, E3 is well known for being attended by many members of the gaming public, due to relatively lax admittance procedures. This year, the ESA indicated it would be applying sterner methods, though it seemed to have little practical effect.
In recent years, platform holders and third party publishers have begun more frequently holding their own press events throughout the year, which, due to smaller game lineups and less need for costly marketing campaigns, are often seen as more appropriate settings for productive game previews and interviews. These events, along with the increasing number of other large expos such as the upcoming Games Convention in Leipzig, Germany and Tokyo Game Show in Tokyo, Japan, have decreased the need for a single all-encompassing industry showcase such as E3, said Lowenstein.
The new event will remain in the city of Los Angeles, though it seems unlikely it will remain in the large Los Angeles Convention Center. The ESA will reveal more details about the event in the coming months.
Update: Next Generation, one of the first sites to break this news this past weekend, has posted a story covering ten reasons why E3 collapsed. Many of them have been covered in news posts here today and yesterday, but there is one particularly interesting claim. According to Next Generation, the presidents of the North American industry's four biggest big shots--Nintendo, Microsoft, Sony Computer Entertainment, and Electronic Arts--talked the matter over and determined that if they all agreed to pull out of the show together, the impetus behind E3 would fall away.
Update 2: GameSpot has received confirmation from the ESA's Doug Lowenstein that E3 2007 will be held in July rather than the traditional May.