It was 2019, months before COVID-19 would change everyone's lives and wreak untold havoc on live events. Inside the halls of the Los Angeles Convention Center, the Shacknews staff was wrapping up one final interview for the week of E3 2019. As an exhausted Justin Roiland sat on our couch, he was soon surrounded by a parade of people in shark costumes. Our own Greg Burke was in a full-body shark suit holding up a tombstone, which was our way of saying "E3 is over." Some might reflect on that moment and see Shacknews as fortune tellers, but it didn't take an ensemble of Left Sharks for us to see that E3 was on its way out. Thursday's news that E3 2022 would be canceled entirely simply validated what we knew all along: The gaming world has outgrown E3.
In thinking over how this point in time ever came about, it's worth asking: How did Shacknews end up on the E3 floor in the first place? There are several answers to that question. One of them was efficiency. Why have our writers bounce back and forth between halls when we could have one dedicated booth that would bring E3's developers to us? Another was evolution. In addition to our written features, the Shacknews Twitch presence had grown to a level that allowed us to deliver the best of E3 live to our audience. The answer we're looking for in this specific case is, the space was available. Why was the space available? Simply put, the Entertainment Software Association had overplayed its hand.
Costs for booths at E3 had become outrageous. The ESA reasoning was likely, "If space is that important, whoever wants it will pay hand over fist for it." Beyond renting out the booth space itself, having a presence at E3 added up to nearly untenable levels. Between hardware, flooring, booth decorations, labor, internet (this was a particularly high cost), and a slew of hidden costs, booth rental would skyrocket into five, if not six, digits. GamesIndustry.Biz wrote an accurate breakdown of where money often goes in exhibiting at a show like E3. That was written in 2017, even before the ESA decided to hike up its costs.
The exorbitant cost of exhibiting at E3 was a major reason that Shacknews was in the process of looking into alternatives for 2020. For our site, a relatively small fish in a sea of game publishing sharks, the cost was too high. However, it was also too high for some of the biggest game publishers in the world. Sony and Microsoft didn't skip the E3 show floor because they thought they were "too good" for the event. They did so because it no longer made financial sense to bleed that kind of money, especially when newer ways to present their product had become available.
This is where the Nintendo model comes in. While Nintendo was still a massive presence on the E3 show floor, it had pioneered an innovative way to generate excitement for its product. If Nintendo announced a Nintendo Direct for next week, it would create the kind of buzz that would trend on social media for weeks. Players would rush into retailers to register pre-orders or flock to the Nintendo eShop to buy their digital titles early. Nintendo had become the master of its own hype, not the ESA and not E3.
PlayStation learned that lesson over time. With new hardware on the way, why waste time (and precious money) on the E3 show floor? E3 didn't have to be their biggest week of the year. The biggest week of the year would be whenever they wanted it to be. Remember the week that Sony unveiled the PlayStation 5 and all of its games? It didn't happen at a digital E3 or at any point in June. It happened in September 2020. It happened on their schedule, not anybody else's.
Microsoft adopted that same strategy, but it also learned the true way to win E3 week. To quote 1983's WarGames, "The only winning move is not to play." To explain this strategy is to look at Devolver Digital. The renegades of the gaming industry understood years ago that the easiest way to get around E3's monstrous costs was not to attend the show itself but to set up shop across the street. Why pay the venue fees, rental fees, and whatever else the ESA and the L.A. Convention Center would bill them for when they could rent an empty lot across Figueroa Street? Devolver was no longer beholden to the rules of the ESA, but could now play by its own.
To an extent, Microsoft adopted the Devolver Digital model, opting to skip E3 on the L.A. Convention Center floor and instead set up a massive presence across the street. If you're Microsoft and you have a massive theater with your name on it literally across Chick Hearn Court at L.A. Live, who needs the Convention Center? The Microsoft Theater allowed the Xbox team to set up their own demo stations, put out a live presentation without time constraints, reserve suites for press meetings, and do so on their own dime without having to worry about how much it would cost to rent out internet access from the ESA. For Microsoft, this new central location is not only a cost-saver but an attraction unto itself.
While Nintendo was still attending E3 regularly, Microsoft and PlayStation's departures from the show floor was a massive blow to the expo's prestige. An E3 without two of the big three publishers is a far cry from the show that the entire industry gravitated towards in its early days. That's especially true in 2022 now that Microsoft has purchased Bethesda and Activision Blizzard, essentially taking them away from the E3 show floor, as well.
With that said, E3 didn't need the COVID-19 pandemic to dig its grave, but it sure did help pile the dirt onto its casket. With COVID-19 putting a long-term halt to live events, the industry needed to adapt. That was the ESA's opportunity to present something new. It was a chance to go in an exciting new direction. Instead, Geoff Keighley beat them to the punch. Keighley's numerous connections and resources allowed him to put together a week-long digital festival, one solely dedicated to video game hype. It showed fans games of all sorts, from the AAA blockbuster to numerous undercovered indie titles, courtesy of Day of the Devs. Once Keighley put forward the Summer of Games and once press outlets like IGN and Shacknews (stay tuned for our summer plans, by the way) started to follow, there was no room for E3 anymore. Any attempt by the ESA to adapt was too little, too late.
Even as live events have started to return, the landscape has changed forever. A live convention exclusive to publishers, developers, press, and industry insiders is no longer needed. There is no longer a need to set aside an excess of cash in June to plan around getting everyone to a live event. The future is digital, the future is now, and the future has no more need for E3.
Of course, you didn't need a booth full of dancing sharks to tell you that.