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Tuesday, August 1, 2006 - Page updated at 12:00 AM

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Smaller E3 wants less flash, more substance

Seattle Times technology reporter

For Robert Khoo, one unforgettable moment at the Electronic Entertainment Expo convention came when stuntmen rappelled from helicopters to the sidewalk in front of the Los Angeles Convention Center to promote a game.

"I think it was every half hour they would do it. It was sweeeet," said Khoo, director of business development at Seattle-based Penny Arcade. "It didn't make me buy the game, though."

Therein lay the problem. Flash was beating substance at the annual convention, known within the industry as E3. Theatrics had trumped business. And somewhere, amid the dancing girls and celebrity appearances, participating companies were wondering what, exactly, they were getting back on their investment.

The industry debate over the value of E3 culminated last Wednesday at Microsoft's campus, where the Entertainment Software Association voted unanimously to make dramatic cuts to the trade show.

The next E3, tentatively set for May 2007, will be pulled from the Los Angeles Convention Center. It won't have the trade show floor, the carnival-like exhibition space filled with monster speakers and big-screen televisions showing video-game footage.

The event will move to Los Angeles-area hotels, said association president Douglas Lowenstein. and will become invitation-only, which means attendance could drop from 60,000 to between 2,000 and 7,500.

"What's wrong with E3 comes down to frankly mostly a question of scale," Lowenstein said. "It's just far more big and sprawling and lacks the intimacy and doesn't offer the opportunity that it used to for the real quality interactions that are so important to the industry."

Those quality interactions, it was becoming clear, were with the media. In the early days, E3 was mainly about lining up video-game orders from retailers, Lowenstein said. But game publishers have meetings with retailers throughout the year, and it wasn't as important anymore to wow the Best Buys and the GameStops at a trade show.Participating companies wanted to target the media with controlled briefings and events. Lowenstein said many companies might follow the model Microsoft used in May, when it held a large briefing at Grauman's Chinese Theatre and then invited reporters to a hotel across the street to play games and snack on appetizers.

ESA's chairman is Robbie Bach, president of the Entertainment and Devices Division at Microsoft. The association's board meeting was held in Redmond last week as part of a regular rotation with Los Angeles and San Francisco.

Scaling back E3 will have a direct impact on ESA, which gets most of its revenue from the convention. Lowenstein said that ESA will respond by increasing its member dues. In other words, member companies will pay more for what they feel is better outreach to the media.

ESA has 26 member companies, and at least six have headquarters or office space in Puget Sound. Members mostly responded to the news Monday by releasing carefully worded statements praising the decision to scale back.

"We support the board's decision to pursue other types of events that can better address the needs of our industry and further its growth," said Sony Computer Entertainment.

"It's great to see the show evolving," said Microsoft.

Reaction wasn't as positive among the gamer press that ESA companies are so intent on wooing. E3 had become "little more than a beauty pageant" for the video-game industry, said gaming site 1Up.com.

"The new E3 is going to get exactly one chance to prove it's worth going to," said gaming site Kotaku.com. "If E3 '07 doesn't impress I doubt many mainstream journalists will return."

For Khoo at Penny Arcade, however, the news was welcome. He organizes the Penny Arcade Expo, a local video-game conference, and estimates that 17,000 people will attend the next one, slated for Aug. 25-27 at Bellevue's Meydenbauer Center.

The expo used to be the show for video-game fans who couldn't get into E3, he said. Now, he added, "this is the biggest show in the nation as far as finding gamers in one place."

Kim Peterson: 206-464-2360 or kpeterson@seattletimes.com

Copyright © 2006 The Seattle Times Company

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