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whadu · Level 49: GameShark **Posts:** 37005 **Timestamp:** Sat May 03, 08 12:26 AM

KOTAKU: What's the fate of E3, and of the Entertainment Software Association? It's worth examining in light of recent events. This morning we broke the news that two major publishers, Activision and Vivendi, have decided to take a pass on the event and exit the trade association, while other companies have withdrawn their E3 attendance as well. At the same time, the ESA appears to be facing stirrings of industry discontent with the ESA's leadership, namely its current president, Mike Gallagher.

E3 is not the boon to publishers that it once was, says Penny Arcade's director of business development Robert Khoo, who as the organizer of the PAX fan expo clearly has an interest, to say the least, in how things turn out.

"The reason that E3 imploded in recent years was because the publishers felt that it turned into this sort of pissing contest between them... where they were trying to figure out who could one-up each other," Khoo said. "They all thought to themselves that it just wasn't worth it."

The controversial decision to re-format last year's E3 into a smaller, more toned-down event was what Khoo calls "a self-correcting measure by the members of the ESA," in an effort to address its constituency better.

"I would imagine that that show is still trying to look out for what the publishers want - that's the whole goal of that trade association, which is to deliver the needs and try to figure out what their members actually want."

Neither Khoo nor Penny Arcade are ESA members, so he couldn't speak to whether the association is acting optimally to assure its members' best interests. "The real question is whether a show like E3 is something publishers want," Khoo said. "I guess Activision, Sierra, Blizzard, Vivendi feel that is not the case."

Earlier today we reported that several companies skipping E3 blamed their departure on "business issues," which analyst Michael Pachter pinned on poor timing for the July event, inconvenient to those companies' fiscal calendars and overlapping with times during which they must observe a "quiet period" and avoid communicating with investors.

"That blackout period is definitely interesting," Khoo said. "We don't really deal with that at all, just given the timing of our show, because its smack dab in the middle of the quarter. I'm sure that is a genuine concern, but since the third quarter ends at the end of September, it doesn't affect us at all."

According to Khoo, the years where publishers knew what to expect from E3 appear to be over, and that's hurting the event and potentially the ESA by association. After last year's "transitional period," quite a bit looks still to be up in the air, he said.

"It's in flux, and since publishers have that level of uncertainty, that is an unattractive trait to have going into a fairly large investment not knowing what you're going to get out of it."

Several industry sources expressed the same opinion as analyst Pachter: that Gallagher's lack of involvement in the industry not only results in poor planning and poor communication regarding E3, but may weaken the ESA's power to serve the video game industry in the long run.

When prior president Doug Lowenstein gave his final, impassioned speech at DICE 07, he vented his frustration at developers and publishers who refuse to defend their creative work when it's controversial, saying, "Don't duck and cover when the shit hits the fan."

But that's largely what Gallagher did when the association failed to publicly defend Mass Effect during the infamous Fox News "SeXbox" controversy. In an interview with GameDaily, he promised to "support the thrust of the industry activities and the reaction of the video gaming community," but refrained from taking any public position on behalf of the ESA.

However, plenty of the major publishers, including Capcom, Take-Two and EA, continue to support both E3 and the ESA. "It seems that at least four very large members are on the floor and doing press conferences, and it seems like a fifth unaligned company is doing a large event contiguous to that," said EA's Jeff Brown, VP of corporate communications. "That means that there's going to be no problem getting a crowd into LA for E3 this summer."

For the first time in several weeks, Take-Two is in agreement with EA on something: "As a member company, Take-Two Interactive supports the Entertainment Software Association, its leadership and its efforts on behalf of the industry," said CEO Ben Feder. "Mike Gallagher has done an outstanding job as president of the ESA and we look forward to participating in the E3 Media and Business Summit this July."

"No plans to drop out, no issue with Mike, no comment," Capcom said, when asked for their thoughts on the usefulness of the ESA and the fate of the event.

Atlus USA is one of the companies declining to participate in this year's E3, but spokesman Aram Jabbari stopped short of placing the blame on the ESA. "The nature of the show changed when they changed it from a consumer show to an invite-only press show," he said. "A lot of things have changed, but our participation doesn't have to do so much with the changes... we just chose not to exhibit this year and we do wish the ESA and all the exhibiting companies the best of luck."

NCsoft said its refusal to attend E3 was related to a timing issue with their internal development schedule and not with any conflicts about E3, but PR manager Mike Crouch declined to comment on potential issues concerning the state of the ESA. "One of the primary functions of the ESA is to manage E3," Crouch said. "And we still believe in E3, and we would have gone this year had the timing worked out for us. In that regard, we don't have anything negative to say about the usefulness of ESA."

"We would have definitely found E3 useful had it fit into our schedule this year. The judgment would be the ESA serves its purpose as far as we're concerned, as far as E3."

MORE: http://kotaku.com/386713/industry-insiders-discuss-esa-e3s-future

TAG: ESA
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