Annual Video Game Expo to Be Less Flashy, More Corporate

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The video game industry's largest annual trade show, the Electronic Entertainment Expo, will be scaled down dramatically next year amid industry desires for a more intimate setting, organizers said Monday.

"This is not a wake or a funeral. It's about changing E3 to meet the modern needs of the industry," said Douglas Lowenstein, president of the Entertainment Software Association, the trade group that operates the show.

The glitzy three-day extravaganza in May drew about 60,000 attendees and 400 exhibitors spread across 550,000 square feet of exhibit space.

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It was almost double the size of the inaugural show 12 years ago and had evolved — as have some other large trade shows — into more of a spectacle than an event conducive for dealmaking and meetings.

"There was a lot of glitter and splashy competition," Lowenstein said. "That's fun for people walking around, but it doesn't emerge as a productive way of three days to conduct business."

After years of consideration, the trade group's 16-member board of directors unanimously approved the overhaul last week, Lowenstein said.

Board members include representatives from the biggest players in the industry: Sony Corp (SNE)., Nintendo Co., Electronic Arts Inc. (ERTS), Microsoft Corp. (MSFT) and THQ Inc. (THQI)

Details are still being worked out, but some of the known changes are:

— The event will be moved from the Los Angeles Convention Center to a smaller venue yet to be determined, possibly a hotel.

— The usual date in May will be pushed to early July, closer to the holiday season. In recent years, an increasing number of exhibitors were compelled to show off their upcoming products but were unable to present demonstrations that could be played.

— Attendance will be by invitation only. Although the event had always been closed to the general public, almost anyone involved in the industry could previously attend. Attendance is expected in the "thousands" instead of "tens of thousands," Lowenstein said.

— The number of exhibit booths will also be decreased.

The trade show will aim to provide a setting for "high-quality" meetings with media, developers, retailers and other key industry audiences, Lowenstein said.

The new format should also help reduce the costs for participating companies at a time when game development and marketing costs have increased and other video game trade shows have cropped up around the world.

The distribution of video games has also changed dramatically in the past decade.

In the early days of E3, part of the goal was to help expose the growing industry to all the intermediaries in retail distribution, but the consolidation of the retail channel to a few major players such as Wal-Mart Stores Inc. (WMT) or Target Corp. (TGT), has led to more direct sales instead.