November 27, 2018 • 34 mins
In mid November, 2018, Sony dropped a bombshell - the company would not attend the 2019 E3 conference. Has the video game trade show outlived its usefulness?
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Episode Transcript
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Speaker 1 (00:04):
Get in touch with technology with tech Stuff from how
stuff works dot com. Hey there, and welcome to tech Stuff.
I'm your host, Jonathan Strickland. I'm an executive producer at
I Heart Radio and how Stuff Works and I love
all things tech and In mid November, Sony, the company
(00:26):
that makes the PlayStation four game console, announced it would
not be taking part in the two thousand nineteen E
three Conference E three, which essentially stands for the Electronic
Entertainment Expo, although I think they just call themselves E
three these days anyway. It's a big annual industry event
that takes place in Los Angeles, California. It's not the
(00:48):
largest video game industry conference in the world. There's one
called Games Common Germany that has about three hundred thousand
more people attending it than E three, but E three
is usually viewed as one of the most important video
game conferences of the year. It puts a spotlight on
video game companies and titles, as well as hardware manufacturers.
(01:11):
So let's take a step back to talk about the
brief history of E three before we explore the whole
Sony story here. So, before there was an E three,
most video game manufacturers would showcase upcoming consoles and titles
at c e S. C e S is another one
(01:33):
of those conferences that used to be known by its
name Consumer Electronics Show, but again they kind of shy
away from that and just called themselves c e S
these days. There was no dedicated conference for video games
at that time, and after the video game crash of
nine three, it was kind of a question as to
whether the home video game market would even be a
(01:55):
thing ever again. But then Nintendo came along with the
Famicon also known as the Nintendo Entertainment System, and the
industry would claud its way back to stable ground. But
for about a decade, c e S was the one
big trade show where companies could show off their stuff,
(02:16):
and this was actually pretty tough because there's a lot
that's going on during c e S, so standing out
from all the other things that are happening at that
same time as a really big challenge. Then we flash
forward by more than a decade really in there was
an organization coming together. Originally it was called the Interactive
(02:37):
Digital Software Association, but it would change its name eventually
to the Entertainment Software Association or e s A. The
e s A as the organization that created E three.
It organized a brand new trade show dedicated solely to
the video game industry. At the time, video games were
not nearly as prominent in culture as they are today,
(03:01):
so the goal was multifold. It was to give video
game studios and console manufacturers a dedicated event where they
didn't have to buy against microprocessors and TVs and refrigerators
for attention. They would be able to hold meetings with
each other and do business. They would be able to
promote things to the media, and they would be able
(03:22):
to bring some attention to an industry that otherwise was
fairly obscure. Apart from the you know, legions of dedicated
gamers out there, no one was really aware of it.
So that first event in uh in N had approximately
fifty thousand attendees. I've seen estimates between forty and fifty thousand, really,
(03:43):
and it was an industry and press event, which meant
the general public was not allowed to attend. If you
were not media and you weren't connected to the video
game industry, you were not allowed to go. This gave
game developers the chance to promote their work direct to
the media as well as the corporate representatives of some
(04:03):
of the larger retail organizations. They got a chance to
talk to these video game developers, and so you had
these conversations where you could actually make deals where the
retail representative would agree to carry those video game titles
and put them on store shelves. Because in those days,
(04:24):
physical copy was really the only option. You didn't have
digital distribution networks. So this conference it filled a very
important role. It gave these video game companies the outlet
not just to the media, but also to the stores
that would ultimately carry the titles. So E three was
all about marketing and sales essentially. That first year saw
(04:48):
Sony reveal the original PlayStation price and release date in
the United States, and Nintendo would show off the Virtual Boy,
which would go on to become one of the most
hand flops in video game tech history. Sega also announced
that it would start shipping the Sega Saturn console to
retailers during the event itself was meant to be a
(05:11):
big sort of press reveal, and there were big video
game companies like e A, Capcom, Acclaim and more that
were at that first E three. It was considered a
big success when it was all over and the e
s A would continue to hold E three and the
next two events were in Los Angeles, but then negotiations
(05:32):
with venues did not go so well for the next
couple of years. So typically, if you're gonna throw a
big event, you have to make arrangements years in advance
to guarantee the space, and the s A was unable
to do that in Los Angeles, so instead E three
for those two years took place in my hometown of Atlanta, Georgia.
(05:55):
It would return to Los Angeles after and no, I
never got to go to E three while it was
next door to me. I was not working in the
field of tech at that time. In Sega would show
off the Dreamcast, Sony gave some previews of the PlayStation two,
and in two thousand, Microsoft appeared at E three for
(06:16):
the first time to promote the upcoming premiere of the
Xbox Console. In two thousand one, Sego would make its
final appearance as a console maker, though it would continue
to show up as a game developer, it just was
getting out of the hardware business. Nintendo would show off
the GameCube that same year, and the event grew year
over year until two thousand seven. That year, several exhibitors
(06:40):
had approached the e s A with concerns about how
E three was just growing too big and it was
too flashy and too focused on the media. The exhibitors
felt they were seeing diminishing returns, that the large number
of attendees made it difficult to have any meaningful interactions
with any one person because you just you were flood
with people all the time. And the spectrum of media
(07:03):
media had grown significantly. You know, in the in the
old days when it first started, it was pretty much
mostly print publications, so you had gaming and computer magazines
that were in some newspaper reporters that were largely the
press at this event. But by the mid two thousand's,
the Web had really taken over. You know, the print
medium was dying compared to the web. I hate saying that,
(07:26):
and of course print media is still around, it's not
like it's gone, but the Web was definitely taking the
lead over print, and now bloggers were making up a
larger percentage of the press passes. So the E s
A took a look at these complaints from the exhibitors
and responded by purposefully scaling back E three. So then
(07:47):
the organization announced in two thousand seven E three would
become an invitation only event, and they also it would
be limited in size. Only ten thousand attendees would be
allowed to go there, including a select you from the media,
and it would not take place at a centralized location
like the l A Convention Center. Instead, it was spread
across multiple smaller venues across Santa Monica. The response was
(08:12):
not what the exhibitors or the e s A had
hoped for. The reduced media coverage meant that the game
companies received far less attention and therefore very much less
free publicity, which unfortunately was something that they had been
enjoying without any fear up to that point. So they
found out late in the game that the real audience
(08:34):
for E three happened to be all those bloggers and
the media professionals after all. So after the two thousand
eight conference, which was also a stripped down, more modest affair,
the s A chose to return to the bigger, Boulder
brassier approach. The two thousand nine conference had forty one
thousand attendees, and the two thousand ten show saw game
(08:56):
developers like Ubisoft, Konami, and e A hold their own
press conferences, which expanded the media events beyond just the
console manufacturers. They had frequently been holding live conferences, but
now the game developers themselves were starting to hold their
live press events. So those companies set the precedent for
(09:18):
what we've seen over the years since, when company representatives
take the stage to show off footage from previously announced games,
all the way up to unveiling exclusive announcements of game
titles that had previously been top secret in Nintendo chose
to skip E three and it held its own presentation
(09:39):
called Nintendo Direct with a prerecorded presentation. This marked the
beginning of Nintendo sort of backing away a bit from
E three. They would come back in to have some
space on the exhibition floor, but they would continue to
do their prerecorded UH Direct events rather than holding a
(09:59):
live of event. So they do still show up to
E three, but they don't hold a live press conference
like Microsoft or until recently, Sony. This helps keep Nintendo
games in gamers minds, and in fact, Nintendo is known
for holding multiple digital events throughout the year so that
it's not dependent on just one major event to impress gamers.
(10:23):
This way, gamers tend to be aware of what's coming
out throughout the year and it's not just one big moment. However,
uh some people believe that this means that the company
tends to have less of an impact at E three,
and that means that they don't often feature into the
main conversation you'll often hear from the more recent E
(10:45):
three is the ones like sixteen who one E three,
and it usually comes down to an argument between Microsoft
and Sony, which is kind of infuriating for anyone who's
a PC gamer and has no interest in console gaming.
In the e s A made another big change to
(11:06):
E three, one that was seen as either inconvenient or
downright controversial. The organization opened up the conference for the
first time to the general public. If you wanted to
go to E three, you could purchase a ticket for
between a hundred fifty and two fifty dollars a princely
some and then you could attend. That would give you
access to the exhibit floor space, which meant you could
(11:29):
line up for hours in order to get a little
hands on time with an upcoming video game title or
watch and a non interactive demo. Now, I was there
in and I saw a lot of people waiting around
for half a day to play games like God of
War for about ten minutes. I can't speak to their experience.
(11:51):
It's possible they all loved it, but to me, it
seemed like a recipe for disappointment. Would you walk away
feeling that those hours in line were well spent? I
guess if you were making friends in the line, that
would help. As a member of the media, I could
have jumped ahead of most lines if I had wanted to,
(12:11):
but I spent most of my time observing, because honestly,
it felt kind of scuzzy to jump ahead. Maybe if
my job was to cover only video games, if that
was all I did, I probably would have jumped ahead,
because it's the only way I would have gotten enough
work done. But I cover all of technology, so I
felt like I should probably just sit back, let the
other video game journalists actually get in to do their jobs,
(12:35):
and let the people who paid to be there the
chance to play these games, and I would just kind
of observe. Now that brings us up to Sony's announcement
that it would not be participating in the three and
twenty nineteen The company will not have a space on
the exhibition floor. There will still be game developers and
the three showing off PlayStation games on PlayStation hardware, but
(12:56):
there won't be a dedicated Sony space, nor will there
be a live event filled with weird entertainment and video
game announcements. That Sony Live event was really darn weird.
I'll explain more about Sony's thoughts in just a moment,
but first let's take a quick break to thank our sponsor.
(13:24):
Sony released a statement about their decision to skip E three,
and it said quote, as the industry evolves, Sony Interactive
Entertainment continues to look for inventive opportunities to engage the community.
PlayStation fans mean the world to us, and we always
want to innovate, think differently, an experiment with new ways
(13:45):
to delight gamers. As a result, we have decided not
to participate in E three and twenty nineteen. We are
exploring new and familiar ways to engage our community in
twenty nineteen and can't wait to share our plans with you.
End quote. Now, that's not that different from what Nintendo
(14:05):
executives said when Nintendo decided to skip holding that live
press event at E three. The big difference here is
that Sony is skipping the whole thing, not just the
live event, and E three is not the only event
that Sony has backed out of. Sony launched at their
own event called the PlayStation Experience back in At that time,
(14:28):
it was celebrating the twentieth anniversary of the PS one,
But earlier in Sony executives revealed that there would be
no such event this year in December. So what's the
reason for that. The executives were very candid. They said,
there just wouldn't be enough new games that are far
enough along in their development to create an experience that
(14:51):
would satisfy fans. So rather than hold an event where
they might have two or three new titles, many of
which gamers are all are you familiar with? Because they've
already seen promotional material for these games, that would they
would walk away disappointed and Sony didn't want that, so
they decided that for this year they're going to skip
the PlayStation Experience. One of the discussions going around online
(15:15):
is that Sony pulling out of E three is another
sign that the conference overall doesn't really serve a useful
purpose anymore. It's easier than ever for companies to reach
out over various digital platforms to promote upcoming games and hardware,
from company owned media outlets to twitch streamers, there's no
(15:38):
shortage of points of contact with the general public. You
could even bypass traditional media entirely and still reach an
enormous audience. What's more, by leveraging some of those assets,
like popular twitch streamers. Let's say that Sony reaches out
to a very popular Twitch streamer and says, I'm gonna
(15:59):
make a deal with you for X amount of money.
I need you to stream and talk about these new games,
and you can be totally upfront that it's sponsored content,
but you will reach a much larger fan base, and
that's a dedicated fan base. And the fan base is
really dedicated and they they the twitch streamers really genuine
(16:20):
and transparent. Then the company can piggyback off the popularity
of the online personality and it's an incredibly valuable marketing tool.
Over at Microsoft, Phil Spencer, who's the VP of Gaming there,
had a different perspective. He said, quote E three is
an incredible platform to showcase the vibrancy and creativity of
(16:42):
the video game industry. The es A continues to expand
the events reached the fans and the industry, both in
attendance and online, and we look forward to what's ahead
at E three nineteen end quote. Of course, right now,
Microsoft is poised as the only aiming console manufacturer that
will have a live press event during E three. The
(17:06):
stage pretty much belongs to them at this point, which
could be an incredibly valuable thing. If they don't drop
the ball some crazy way, they kind of win E
three twenty nineteen by default. The question some people have
is is it's still worth winning because meanwhile, some game
(17:26):
publishers have also tried to pull away from E three
a little bit. Ubisoft has been known to hold off
site events during E three. E A has launched a
fan event that took place at the same time as
E three, but a different location, so it was not
connected to E three. It was their own thing. Then
(17:46):
there's stuff like Blizzard Entertainment, which holds its own annual
gaming convention called blizz Con, which started back in two
thousand five. They can use that as a place to
announce big developments in their various titles. On top of
those events, there are some held by other organizations that
offer video game developers a chance to connect directly with
(18:07):
fan bases. So the Penny Arcade Expo, now known as
PACKS launched in two thousand four. It's a gaming culture festival.
It's meant for gamers to attend, and it connects to
the online Penny Arcade comic. That's the origin for this.
It was the creators of the Penny Arcade comic who said,
(18:28):
we want an event specifically for gamers as a celebration
of gaming. Today. Packs includes multiple shows throughout the year.
What used to be called Packs Prime that was the
original event, the one that takes place in Washington State.
These days it's called Packs West, but there's also Packs South,
Packs East, Packs Unplugged, which is for board games and
(18:52):
card games, that kind of thing like physical games, and
then there's Packs Australia. Several video game developers attend events
this and they give fans a chance to play demos
and early builds of various games, and they'll even use
those as places to announce new titles. So it kind
of takes a little bit of the luster away from
(19:14):
E three. E three is not quite as special because
there are these other events that the companies are using
to make these big announcements. From a media coverage perspective,
A three seems to be losing some value. There may
be diminishing returns on the press coverage for E three
moving forward. Now, that doesn't necessarily mean that the conference
(19:36):
has lost all its value, because we are forgetting about
all those meetings that take place at E three, Right
like we tend as the media and as consumers, we
tend to be very much focused on the presentations, on
the video game titles, on the demos, on the booth design,
(19:57):
that kind of stuff, the flashy, forward facing stuff. But
the stuff behind the scenes is still really important. Over
at Kotaku, Jason Schreier and Kirk Hamilton's responded to a
listener question to the podcast split Screen. They they said,
are the listener was asking about E three's relevance? Is
E three still relevant? And their response was more about
(20:19):
the stuff that's going on off the show floor, namely
those meetings that game developers get with potential publishers, And
it's at those meetings where a company might be able
to land a deal so that the game they've been
working so hard on gets distribution, and publishers in turn
might meet with retailers to make sure the games they
distribute are getting good promotion and placement in stores that
(20:42):
helps boost sales. They also mentioned that for smaller developers,
getting the chance to share the stage with big companies
like Sony and Microsoft is a huge deal. So up
until twenty nineteen, Sony has been known as giving a
nice stage for smaller developers. They'll feature some of these
independent games in their major press conference, and that gives
(21:05):
what would otherwise be an obscure little title an enormous
push in the larger gamer consciousness. He could turn something
that would have just faded away into a cult success.
Of course, this particular episode of split Screen was recorded
in the summer of eighteen, before Sony had announced that
(21:26):
it was not going to attend E three twenty nineteen,
so that changes things a bit. And I also feel
I should point out that the move toward digital distribution
has made some of those retailed discussions less relevant as well.
There's still a lot of people who will only buy
physical copies of games, but online platforms like Steam and
(21:46):
the various console online shops have become increasingly popular options
for gamers. According to Statista, two thousand twelve was the
last year when physical copies of games outsold digital copies,
and that year of all games sold were physical were digital.
(22:07):
The following year those figures flipped, and every year since
digital copies of games have made up an increasingly larger
percentage of sales compared to physical copies. So you're more
likely to have discussions with Valve about the Steam platform
than you are with Walmart about where they should put
(22:27):
the Elder Scrolls online display. Kirk Hambleton's on that same
episode i mentioned earlier, said he felt that E three
was rapidly losing relevance as a media event. These days,
companies are holding their own announcements and reaching large audiences
through streaming. More and more companies are following in the
footsteps of Apple, which kind of defined this sort of
(22:48):
direct marketing back when Steve Jobs was presenting stuff like
the iPhone in two thousand and seven. Since that time,
we've seen other companies similarly pull out of big trade shows.
Micro Soft, which once upon a time held a place
of dominance at C E S for many years, Bill
Gates would give the the top keynote at C E
(23:10):
S and then uh Balmer would give the top keynote
for a few more years, but the company announced in
two thousand twelve that that was going to be the
last year it would attend c S. It would no
longer be part of this enormous trade show. And when
you step back, you can kind of understand why. As
these shows get bigger, it gets harder to stand out
(23:31):
in the crowd. When everyone is holding a press event
or begging for attention, then it becomes more challenging to
get any focus for your own announcements. And not only that,
if you hold a specific event at a specific time,
like a big trade show, then all the companies that
are going to be at that trade show have to
(23:53):
work super hard to have something to show off on
a date that wasn't their choice. You know, it's not
air event. They're attending the event, so they have to
work for someone else's timeline. And if you get big
enough to say, you know what, we don't need to
do this, you can step back, and then your company
can hold its own events on your terms, on your schedule.
(24:16):
That's a big deal. It means you can wait until
you really have something cool to announce and show before
you come forward. You don't have to risk having nothing
of note to show off or that you might show
off something that's so early in development that there's no
guarantee it will make that the rest of the way through.
I have a little more to say about this subject,
(24:37):
but first let's take another quick break to thank our sponsor.
A second ago, I was talking about CS and Microsoft.
We'll ce S is still an enormous show and it
can easily carry on without the presence of Microsoft, and
(24:58):
it has. But can E three do the same without Sony?
The PlayStation four has been the top selling video game
console since two thousand fourteen. The PlayStation four debut toward
the end of and so every full year it's been available,
it's been the top selling video game console. It has
(25:20):
sold more units every year than the Xbox One has.
But this leaves not just Microsoft and then Nintendo's limited presence.
There's also the enormous PC games market, so that's still
going to be part of the three. According to New Zoo,
and PC games accounted for thirty two point nine billion
(25:42):
dollars in sales, with twenty eight point six billion of
that being in digital and physical copies. The other uh
for something billion dollars was from browser based games. Console
games took up more of the market slightly. They sold
for thirty four point six billion dollars worth, so a
(26:02):
little bit more sales in console games than PC games,
but PC games are still a big deal. However, both
of those sectors were dwarfed by the mobile market that
racked up an astounding seventy point three billion dollars in sales.
Fifty six point four billion of that was for smartphone games.
Mobile games typically don't get a ton of coverage at
(26:23):
E three, that we might see that start to change.
The e s A announced an attendee list not long
after Sony's announcement that it wasn't going to be a
E three nineteen, and in a press release, the organization said, quote,
among the leading video game companies already committed to participating
in E three twenty nineteen are Microsoft, Slash, Xbox, Nintendo
(26:46):
of America, Activision, Bethesda Softworks, Capcom, Epic Games, Konami, Digital Entertainment,
Square Enix, Take Two, Interactive Software, u be Soft, and
Warner Brothers Interact to Entertainment end quote. That's definitely a
list of heavy hitters, and while that doesn't necessarily indicate
(27:06):
which subsidiaries will also be attending, it's good to remember that.
You know, there are some other big names that are
part of the umbrella that was mentioned. So for example,
Take Two, which will be at E three nineteen, is
the parent company for rock Star, and Activision is the
parent company for Blizzard Entertainment. Also, people have predicted the
(27:27):
death of E three several times in the past, and
so far it's still alive. So back when the conference
was scaled down in two thousand seven, there were people
who were saying the writings on the wall, this conference
is just going to fade away, and it didn't. It
came back in when e A announced it was going
to establish its own event during E three. It wasn't
(27:48):
long before news broke that Activision was also planning to
skip the event that year, and then another company called
war Gaming, which is a smaller developer They make a
game called World of Tanks, said it too was going
to skip the event, and then Disney followed suit, although
to be fair, that was likely because Disney was planning
on shutting down its video game developer division, which was
(28:11):
called Disney Interactive Studios, and instead they were switching to
a model where the company will license out Disney properties
to third party developers. But we didn't really know that
at that time. From the outside looking in, seeing these
various companies kind of pull out of the three, it
looked like it was a cascade effect, like maybe this
was going to be uh the end of E three
(28:33):
with lots of companies bailing on this established trade show.
And it may even have been what convinced the E
s A to open the show up to the public
in ten that by making the show accessible to the public,
it would also bring pressure on video game companies to
participate or risk being left out of all the excitement.
So there's some who have said that that was probably
(28:56):
why the E s A really chose. One they could
sell tick it's and make money, and two this would
force the companies to participate for fear of otherwise getting
the ill will of the gaming community, and thus the
trade show itself would remain relevant by force. And while
(29:17):
Wired was musing on the possibility that E three might
die after Polygone would call for E three to change
or die, in Brian Crescente wrote an article saying it
was clear that the reasons the E s A started
E three were no longer relevant. Whereas in years past,
game developers would use E three to land publication deals
(29:39):
for the rest of the year. Polygone cited industry professionals
like Sean Leyden of Sony, who said that these days
those deals are done before the games are complete and
well ahead of E three, so they're not happening at
E three, they're happening before, and E three's mission to
bring attention to games isn't relevant anymore either. People are
(30:00):
pretty aware of video games, and the piece pointed out
that the three opening up its doors meant it was
trying to be the next Packs. But Packs is still
Packs and manages to work pretty darn well, so it
might mean that E three is just being kind of
a watered down version of Packs. Many video game journalists
are guessing that Sony's announcement really means that the company
(30:22):
is just trying to get its ducks in a row
for the successor to the PlayStation four. Sony executives already
have confirmed that the company is working on the PS five,
and most analysts guests it's going to come out either
by the end of twenty nineteen or perhaps in and
it's possible that Sony wants to make sure it can
hold an event all its own to announce this next
(30:44):
piece of hardware and not have to worry about winning
a trade show. And because they're focusing on the PS five,
it probably also means they're winding down development for the
PS four, which means they don't have very much to
show off for the console that they are getting ready
to phase out. And again, just like the PlayStation experience,
it may well be that one of the reasons Sony
(31:06):
wants to pull out of the three is they just
don't have a whole lot to show off, and so
it doesn't make a lot of sense to maintain a
presence there now. That could mean that in Sony would
be right back at E three now with the PlayStation five,
and that is just a blip in the radar. Or
it might mean that more companies will follow suit and
I'll like to have their own events instead of going
(31:27):
all in together, and it could mean the E three
is finally starting to unravel. Why do I think I
I suspect Sony will be back in twenty unless the
company just decides that it's much better to have your
own stage rather than share it with others. Uh. The
real value I think is that by having a concentrated event,
(31:48):
you get a lot of excitement that it's all focused
at the same time, and you can you can get
a lot of leverage out of that. But holding your
own event means you can really control the focus and
control the narrative. And so I don't know. I think
Sony will be back in, but if they announced that
they're done, I think the three might be done too.
(32:10):
Despite the fact that PC gaming continues on strong, it's
getting stronger. Um, I just don't think that the the
developers and the other companies will want to participate if
there's a perception that the event is kind of falling apart.
It might be one of those cases where people say
(32:31):
the ship looks like it's sinking. I don't know if
it's sinking, but let's go ahead and get in the
lifeboat just in case. Well, that wraps up this episode.
It was fun to kind of talk about this and
to go over Sony's announcement. Uh. It surprised me when
I heard about it, and then I had to learn
more and it was all have fun to kind of
go down this sort of guess this estimation about whether
(32:55):
or not E three will stick around. What do you
guys think. I'm curious to hear your thoughts on it.
Maybe that I'm completely off base, and maybe E three
is stronger than it ever has been and I'm just
being silly. I totally accept that that's a possibility. If
you want to get in touch with me, you can
go over to tech stuff podcast dot com. There you're
gonna find links to get in contact with me via
(33:15):
Facebook or Twitter. You can also send me an email
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Get in touch with technology with tech Stuff from how
stuff works dot com. Hey there, and welcome to tech Stuff.
I'm your host, Jonathan Strickland. I'm an executive producer at
I Heart Radio and how Stuff Works and I love
all things tech and In mid November, Sony, the company
(00:26):
that makes the PlayStation four game console, announced it would
not be taking part in the two thousand nineteen E
three Conference E three, which essentially stands for the Electronic
Entertainment Expo, although I think they just call themselves E
three these days anyway. It's a big annual industry event
that takes place in Los Angeles, California. It's not the
(00:48):
largest video game industry conference in the world. There's one
called Games Common Germany that has about three hundred thousand
more people attending it than E three, but E three
is usually viewed as one of the most important video
game conferences of the year. It puts a spotlight on
video game companies and titles, as well as hardware manufacturers.
(01:11):
So let's take a step back to talk about the
brief history of E three before we explore the whole
Sony story here. So, before there was an E three,
most video game manufacturers would showcase upcoming consoles and titles
at c e S. C e S is another one
(01:33):
of those conferences that used to be known by its
name Consumer Electronics Show, but again they kind of shy
away from that and just called themselves c e S
these days. There was no dedicated conference for video games
at that time, and after the video game crash of
nine three, it was kind of a question as to
whether the home video game market would even be a
(01:55):
thing ever again. But then Nintendo came along with the
Famicon also known as the Nintendo Entertainment System, and the
industry would claud its way back to stable ground. But
for about a decade, c e S was the one
big trade show where companies could show off their stuff,
(02:16):
and this was actually pretty tough because there's a lot
that's going on during c e S, so standing out
from all the other things that are happening at that
same time as a really big challenge. Then we flash
forward by more than a decade really in there was
an organization coming together. Originally it was called the Interactive
(02:37):
Digital Software Association, but it would change its name eventually
to the Entertainment Software Association or e s A. The
e s A as the organization that created E three.
It organized a brand new trade show dedicated solely to
the video game industry. At the time, video games were
not nearly as prominent in culture as they are today,
(03:01):
so the goal was multifold. It was to give video
game studios and console manufacturers a dedicated event where they
didn't have to buy against microprocessors and TVs and refrigerators
for attention. They would be able to hold meetings with
each other and do business. They would be able to
promote things to the media, and they would be able
(03:22):
to bring some attention to an industry that otherwise was
fairly obscure. Apart from the you know, legions of dedicated
gamers out there, no one was really aware of it.
So that first event in uh in N had approximately
fifty thousand attendees. I've seen estimates between forty and fifty thousand, really,
(03:43):
and it was an industry and press event, which meant
the general public was not allowed to attend. If you
were not media and you weren't connected to the video
game industry, you were not allowed to go. This gave
game developers the chance to promote their work direct to
the media as well as the corporate representatives of some
(04:03):
of the larger retail organizations. They got a chance to
talk to these video game developers, and so you had
these conversations where you could actually make deals where the
retail representative would agree to carry those video game titles
and put them on store shelves. Because in those days,
(04:24):
physical copy was really the only option. You didn't have
digital distribution networks. So this conference it filled a very
important role. It gave these video game companies the outlet
not just to the media, but also to the stores
that would ultimately carry the titles. So E three was
all about marketing and sales essentially. That first year saw
(04:48):
Sony reveal the original PlayStation price and release date in
the United States, and Nintendo would show off the Virtual Boy,
which would go on to become one of the most
hand flops in video game tech history. Sega also announced
that it would start shipping the Sega Saturn console to
retailers during the event itself was meant to be a
(05:11):
big sort of press reveal, and there were big video
game companies like e A, Capcom, Acclaim and more that
were at that first E three. It was considered a
big success when it was all over and the e
s A would continue to hold E three and the
next two events were in Los Angeles, but then negotiations
(05:32):
with venues did not go so well for the next
couple of years. So typically, if you're gonna throw a
big event, you have to make arrangements years in advance
to guarantee the space, and the s A was unable
to do that in Los Angeles, so instead E three
for those two years took place in my hometown of Atlanta, Georgia.
(05:55):
It would return to Los Angeles after and no, I
never got to go to E three while it was
next door to me. I was not working in the
field of tech at that time. In Sega would show
off the Dreamcast, Sony gave some previews of the PlayStation two,
and in two thousand, Microsoft appeared at E three for
(06:16):
the first time to promote the upcoming premiere of the
Xbox Console. In two thousand one, Sego would make its
final appearance as a console maker, though it would continue
to show up as a game developer, it just was
getting out of the hardware business. Nintendo would show off
the GameCube that same year, and the event grew year
over year until two thousand seven. That year, several exhibitors
(06:40):
had approached the e s A with concerns about how
E three was just growing too big and it was
too flashy and too focused on the media. The exhibitors
felt they were seeing diminishing returns, that the large number
of attendees made it difficult to have any meaningful interactions
with any one person because you just you were flood
with people all the time. And the spectrum of media
(07:03):
media had grown significantly. You know, in the in the
old days when it first started, it was pretty much
mostly print publications, so you had gaming and computer magazines
that were in some newspaper reporters that were largely the
press at this event. But by the mid two thousand's,
the Web had really taken over. You know, the print
medium was dying compared to the web. I hate saying that,
(07:26):
and of course print media is still around, it's not
like it's gone, but the Web was definitely taking the
lead over print, and now bloggers were making up a
larger percentage of the press passes. So the E s
A took a look at these complaints from the exhibitors
and responded by purposefully scaling back E three. So then
(07:47):
the organization announced in two thousand seven E three would
become an invitation only event, and they also it would
be limited in size. Only ten thousand attendees would be
allowed to go there, including a select you from the media,
and it would not take place at a centralized location
like the l A Convention Center. Instead, it was spread
across multiple smaller venues across Santa Monica. The response was
(08:12):
not what the exhibitors or the e s A had
hoped for. The reduced media coverage meant that the game
companies received far less attention and therefore very much less
free publicity, which unfortunately was something that they had been
enjoying without any fear up to that point. So they
found out late in the game that the real audience
(08:34):
for E three happened to be all those bloggers and
the media professionals after all. So after the two thousand
eight conference, which was also a stripped down, more modest affair,
the s A chose to return to the bigger, Boulder
brassier approach. The two thousand nine conference had forty one
thousand attendees, and the two thousand ten show saw game
(08:56):
developers like Ubisoft, Konami, and e A hold their own
press conferences, which expanded the media events beyond just the
console manufacturers. They had frequently been holding live conferences, but
now the game developers themselves were starting to hold their
live press events. So those companies set the precedent for
(09:18):
what we've seen over the years since, when company representatives
take the stage to show off footage from previously announced games,
all the way up to unveiling exclusive announcements of game
titles that had previously been top secret in Nintendo chose
to skip E three and it held its own presentation
(09:39):
called Nintendo Direct with a prerecorded presentation. This marked the
beginning of Nintendo sort of backing away a bit from
E three. They would come back in to have some
space on the exhibition floor, but they would continue to
do their prerecorded UH Direct events rather than holding a
(09:59):
live of event. So they do still show up to
E three, but they don't hold a live press conference
like Microsoft or until recently, Sony. This helps keep Nintendo
games in gamers minds, and in fact, Nintendo is known
for holding multiple digital events throughout the year so that
it's not dependent on just one major event to impress gamers.
(10:23):
This way, gamers tend to be aware of what's coming
out throughout the year and it's not just one big moment. However,
uh some people believe that this means that the company
tends to have less of an impact at E three,
and that means that they don't often feature into the
main conversation you'll often hear from the more recent E
(10:45):
three is the ones like sixteen who one E three,
and it usually comes down to an argument between Microsoft
and Sony, which is kind of infuriating for anyone who's
a PC gamer and has no interest in console gaming.
In the e s A made another big change to
(11:06):
E three, one that was seen as either inconvenient or
downright controversial. The organization opened up the conference for the
first time to the general public. If you wanted to
go to E three, you could purchase a ticket for
between a hundred fifty and two fifty dollars a princely
some and then you could attend. That would give you
access to the exhibit floor space, which meant you could
(11:29):
line up for hours in order to get a little
hands on time with an upcoming video game title or
watch and a non interactive demo. Now, I was there
in and I saw a lot of people waiting around
for half a day to play games like God of
War for about ten minutes. I can't speak to their experience.
(11:51):
It's possible they all loved it, but to me, it
seemed like a recipe for disappointment. Would you walk away
feeling that those hours in line were well spent? I
guess if you were making friends in the line, that
would help. As a member of the media, I could
have jumped ahead of most lines if I had wanted to,
(12:11):
but I spent most of my time observing, because honestly,
it felt kind of scuzzy to jump ahead. Maybe if
my job was to cover only video games, if that
was all I did, I probably would have jumped ahead,
because it's the only way I would have gotten enough
work done. But I cover all of technology, so I
felt like I should probably just sit back, let the
other video game journalists actually get in to do their jobs,
(12:35):
and let the people who paid to be there the
chance to play these games, and I would just kind
of observe. Now that brings us up to Sony's announcement
that it would not be participating in the three and
twenty nineteen The company will not have a space on
the exhibition floor. There will still be game developers and
the three showing off PlayStation games on PlayStation hardware, but
(12:56):
there won't be a dedicated Sony space, nor will there
be a live event filled with weird entertainment and video
game announcements. That Sony Live event was really darn weird.
I'll explain more about Sony's thoughts in just a moment,
but first let's take a quick break to thank our sponsor.
(13:24):
Sony released a statement about their decision to skip E three,
and it said quote, as the industry evolves, Sony Interactive
Entertainment continues to look for inventive opportunities to engage the community.
PlayStation fans mean the world to us, and we always
want to innovate, think differently, an experiment with new ways
(13:45):
to delight gamers. As a result, we have decided not
to participate in E three and twenty nineteen. We are
exploring new and familiar ways to engage our community in
twenty nineteen and can't wait to share our plans with you.
End quote. Now, that's not that different from what Nintendo
(14:05):
executives said when Nintendo decided to skip holding that live
press event at E three. The big difference here is
that Sony is skipping the whole thing, not just the
live event, and E three is not the only event
that Sony has backed out of. Sony launched at their
own event called the PlayStation Experience back in At that time,
(14:28):
it was celebrating the twentieth anniversary of the PS one,
But earlier in Sony executives revealed that there would be
no such event this year in December. So what's the
reason for that. The executives were very candid. They said,
there just wouldn't be enough new games that are far
enough along in their development to create an experience that
(14:51):
would satisfy fans. So rather than hold an event where
they might have two or three new titles, many of
which gamers are all are you familiar with? Because they've
already seen promotional material for these games, that would they
would walk away disappointed and Sony didn't want that, so
they decided that for this year they're going to skip
the PlayStation Experience. One of the discussions going around online
(15:15):
is that Sony pulling out of E three is another
sign that the conference overall doesn't really serve a useful
purpose anymore. It's easier than ever for companies to reach
out over various digital platforms to promote upcoming games and hardware,
from company owned media outlets to twitch streamers, there's no
(15:38):
shortage of points of contact with the general public. You
could even bypass traditional media entirely and still reach an
enormous audience. What's more, by leveraging some of those assets,
like popular twitch streamers. Let's say that Sony reaches out
to a very popular Twitch streamer and says, I'm gonna
(15:59):
make a deal with you for X amount of money.
I need you to stream and talk about these new games,
and you can be totally upfront that it's sponsored content,
but you will reach a much larger fan base, and
that's a dedicated fan base. And the fan base is
really dedicated and they they the twitch streamers really genuine
(16:20):
and transparent. Then the company can piggyback off the popularity
of the online personality and it's an incredibly valuable marketing tool.
Over at Microsoft, Phil Spencer, who's the VP of Gaming there,
had a different perspective. He said, quote E three is
an incredible platform to showcase the vibrancy and creativity of
(16:42):
the video game industry. The es A continues to expand
the events reached the fans and the industry, both in
attendance and online, and we look forward to what's ahead
at E three nineteen end quote. Of course, right now,
Microsoft is poised as the only aiming console manufacturer that
will have a live press event during E three. The
(17:06):
stage pretty much belongs to them at this point, which
could be an incredibly valuable thing. If they don't drop
the ball some crazy way, they kind of win E
three twenty nineteen by default. The question some people have
is is it's still worth winning because meanwhile, some game
(17:26):
publishers have also tried to pull away from E three
a little bit. Ubisoft has been known to hold off
site events during E three. E A has launched a
fan event that took place at the same time as
E three, but a different location, so it was not
connected to E three. It was their own thing. Then
(17:46):
there's stuff like Blizzard Entertainment, which holds its own annual
gaming convention called blizz Con, which started back in two
thousand five. They can use that as a place to
announce big developments in their various titles. On top of
those events, there are some held by other organizations that
offer video game developers a chance to connect directly with
(18:07):
fan bases. So the Penny Arcade Expo, now known as
PACKS launched in two thousand four. It's a gaming culture festival.
It's meant for gamers to attend, and it connects to
the online Penny Arcade comic. That's the origin for this.
It was the creators of the Penny Arcade comic who said,
(18:28):
we want an event specifically for gamers as a celebration
of gaming. Today. Packs includes multiple shows throughout the year.
What used to be called Packs Prime that was the
original event, the one that takes place in Washington State.
These days it's called Packs West, but there's also Packs South,
Packs East, Packs Unplugged, which is for board games and
(18:52):
card games, that kind of thing like physical games, and
then there's Packs Australia. Several video game developers attend events
this and they give fans a chance to play demos
and early builds of various games, and they'll even use
those as places to announce new titles. So it kind
of takes a little bit of the luster away from
(19:14):
E three. E three is not quite as special because
there are these other events that the companies are using
to make these big announcements. From a media coverage perspective,
A three seems to be losing some value. There may
be diminishing returns on the press coverage for E three
moving forward. Now, that doesn't necessarily mean that the conference
(19:36):
has lost all its value, because we are forgetting about
all those meetings that take place at E three, Right
like we tend as the media and as consumers, we
tend to be very much focused on the presentations, on
the video game titles, on the demos, on the booth design,
(19:57):
that kind of stuff, the flashy, forward facing stuff. But
the stuff behind the scenes is still really important. Over
at Kotaku, Jason Schreier and Kirk Hamilton's responded to a
listener question to the podcast split Screen. They they said,
are the listener was asking about E three's relevance? Is
E three still relevant? And their response was more about
(20:19):
the stuff that's going on off the show floor, namely
those meetings that game developers get with potential publishers, And
it's at those meetings where a company might be able
to land a deal so that the game they've been
working so hard on gets distribution, and publishers in turn
might meet with retailers to make sure the games they
distribute are getting good promotion and placement in stores that
(20:42):
helps boost sales. They also mentioned that for smaller developers,
getting the chance to share the stage with big companies
like Sony and Microsoft is a huge deal. So up
until twenty nineteen, Sony has been known as giving a
nice stage for smaller developers. They'll feature some of these
independent games in their major press conference, and that gives
(21:05):
what would otherwise be an obscure little title an enormous
push in the larger gamer consciousness. He could turn something
that would have just faded away into a cult success.
Of course, this particular episode of split Screen was recorded
in the summer of eighteen, before Sony had announced that
(21:26):
it was not going to attend E three twenty nineteen,
so that changes things a bit. And I also feel
I should point out that the move toward digital distribution
has made some of those retailed discussions less relevant as well.
There's still a lot of people who will only buy
physical copies of games, but online platforms like Steam and
(21:46):
the various console online shops have become increasingly popular options
for gamers. According to Statista, two thousand twelve was the
last year when physical copies of games outsold digital copies,
and that year of all games sold were physical were digital.
(22:07):
The following year those figures flipped, and every year since
digital copies of games have made up an increasingly larger
percentage of sales compared to physical copies. So you're more
likely to have discussions with Valve about the Steam platform
than you are with Walmart about where they should put
(22:27):
the Elder Scrolls online display. Kirk Hambleton's on that same
episode i mentioned earlier, said he felt that E three
was rapidly losing relevance as a media event. These days,
companies are holding their own announcements and reaching large audiences
through streaming. More and more companies are following in the
footsteps of Apple, which kind of defined this sort of
(22:48):
direct marketing back when Steve Jobs was presenting stuff like
the iPhone in two thousand and seven. Since that time,
we've seen other companies similarly pull out of big trade shows.
Micro Soft, which once upon a time held a place
of dominance at C E S for many years, Bill
Gates would give the the top keynote at C E
(23:10):
S and then uh Balmer would give the top keynote
for a few more years, but the company announced in
two thousand twelve that that was going to be the
last year it would attend c S. It would no
longer be part of this enormous trade show. And when
you step back, you can kind of understand why. As
these shows get bigger, it gets harder to stand out
(23:31):
in the crowd. When everyone is holding a press event
or begging for attention, then it becomes more challenging to
get any focus for your own announcements. And not only that,
if you hold a specific event at a specific time,
like a big trade show, then all the companies that
are going to be at that trade show have to
(23:53):
work super hard to have something to show off on
a date that wasn't their choice. You know, it's not
air event. They're attending the event, so they have to
work for someone else's timeline. And if you get big
enough to say, you know what, we don't need to
do this, you can step back, and then your company
can hold its own events on your terms, on your schedule.
(24:16):
That's a big deal. It means you can wait until
you really have something cool to announce and show before
you come forward. You don't have to risk having nothing
of note to show off or that you might show
off something that's so early in development that there's no
guarantee it will make that the rest of the way through.
I have a little more to say about this subject,
(24:37):
but first let's take another quick break to thank our sponsor.
A second ago, I was talking about CS and Microsoft.
We'll ce S is still an enormous show and it
can easily carry on without the presence of Microsoft, and
(24:58):
it has. But can E three do the same without Sony?
The PlayStation four has been the top selling video game
console since two thousand fourteen. The PlayStation four debut toward
the end of and so every full year it's been available,
it's been the top selling video game console. It has
(25:20):
sold more units every year than the Xbox One has.
But this leaves not just Microsoft and then Nintendo's limited presence.
There's also the enormous PC games market, so that's still
going to be part of the three. According to New Zoo,
and PC games accounted for thirty two point nine billion
(25:42):
dollars in sales, with twenty eight point six billion of
that being in digital and physical copies. The other uh
for something billion dollars was from browser based games. Console
games took up more of the market slightly. They sold
for thirty four point six billion dollars worth, so a
(26:02):
little bit more sales in console games than PC games,
but PC games are still a big deal. However, both
of those sectors were dwarfed by the mobile market that
racked up an astounding seventy point three billion dollars in sales.
Fifty six point four billion of that was for smartphone games.
Mobile games typically don't get a ton of coverage at
(26:23):
E three, that we might see that start to change.
The e s A announced an attendee list not long
after Sony's announcement that it wasn't going to be a
E three nineteen, and in a press release, the organization said, quote,
among the leading video game companies already committed to participating
in E three twenty nineteen are Microsoft, Slash, Xbox, Nintendo
(26:46):
of America, Activision, Bethesda Softworks, Capcom, Epic Games, Konami, Digital Entertainment,
Square Enix, Take Two, Interactive Software, u be Soft, and
Warner Brothers Interact to Entertainment end quote. That's definitely a
list of heavy hitters, and while that doesn't necessarily indicate
(27:06):
which subsidiaries will also be attending, it's good to remember that.
You know, there are some other big names that are
part of the umbrella that was mentioned. So for example,
Take Two, which will be at E three nineteen, is
the parent company for rock Star, and Activision is the
parent company for Blizzard Entertainment. Also, people have predicted the
(27:27):
death of E three several times in the past, and
so far it's still alive. So back when the conference
was scaled down in two thousand seven, there were people
who were saying the writings on the wall, this conference
is just going to fade away, and it didn't. It
came back in when e A announced it was going
to establish its own event during E three. It wasn't
(27:48):
long before news broke that Activision was also planning to
skip the event that year, and then another company called
war Gaming, which is a smaller developer They make a
game called World of Tanks, said it too was going
to skip the event, and then Disney followed suit, although
to be fair, that was likely because Disney was planning
on shutting down its video game developer division, which was
(28:11):
called Disney Interactive Studios, and instead they were switching to
a model where the company will license out Disney properties
to third party developers. But we didn't really know that
at that time. From the outside looking in, seeing these
various companies kind of pull out of the three, it
looked like it was a cascade effect, like maybe this
was going to be uh the end of E three
(28:33):
with lots of companies bailing on this established trade show.
And it may even have been what convinced the E
s A to open the show up to the public
in ten that by making the show accessible to the public,
it would also bring pressure on video game companies to
participate or risk being left out of all the excitement.
So there's some who have said that that was probably
(28:56):
why the E s A really chose. One they could
sell tick it's and make money, and two this would
force the companies to participate for fear of otherwise getting
the ill will of the gaming community, and thus the
trade show itself would remain relevant by force. And while
(29:17):
Wired was musing on the possibility that E three might
die after Polygone would call for E three to change
or die, in Brian Crescente wrote an article saying it
was clear that the reasons the E s A started
E three were no longer relevant. Whereas in years past,
game developers would use E three to land publication deals
(29:39):
for the rest of the year. Polygone cited industry professionals
like Sean Leyden of Sony, who said that these days
those deals are done before the games are complete and
well ahead of E three, so they're not happening at
E three, they're happening before, and E three's mission to
bring attention to games isn't relevant anymore either. People are
(30:00):
pretty aware of video games, and the piece pointed out
that the three opening up its doors meant it was
trying to be the next Packs. But Packs is still
Packs and manages to work pretty darn well, so it
might mean that E three is just being kind of
a watered down version of Packs. Many video game journalists
are guessing that Sony's announcement really means that the company
(30:22):
is just trying to get its ducks in a row
for the successor to the PlayStation four. Sony executives already
have confirmed that the company is working on the PS five,
and most analysts guests it's going to come out either
by the end of twenty nineteen or perhaps in and
it's possible that Sony wants to make sure it can
hold an event all its own to announce this next
(30:44):
piece of hardware and not have to worry about winning
a trade show. And because they're focusing on the PS five,
it probably also means they're winding down development for the
PS four, which means they don't have very much to
show off for the console that they are getting ready
to phase out. And again, just like the PlayStation experience,
it may well be that one of the reasons Sony
(31:06):
wants to pull out of the three is they just
don't have a whole lot to show off, and so
it doesn't make a lot of sense to maintain a
presence there now. That could mean that in Sony would
be right back at E three now with the PlayStation five,
and that is just a blip in the radar. Or
it might mean that more companies will follow suit and
I'll like to have their own events instead of going
(31:27):
all in together, and it could mean the E three
is finally starting to unravel. Why do I think I
I suspect Sony will be back in twenty unless the
company just decides that it's much better to have your
own stage rather than share it with others. Uh. The
real value I think is that by having a concentrated event,
(31:48):
you get a lot of excitement that it's all focused
at the same time, and you can you can get
a lot of leverage out of that. But holding your
own event means you can really control the focus and
control the narrative. And so I don't know. I think
Sony will be back in, but if they announced that
they're done, I think the three might be done too.
(32:10):
Despite the fact that PC gaming continues on strong, it's
getting stronger. Um, I just don't think that the the
developers and the other companies will want to participate if
there's a perception that the event is kind of falling apart.
It might be one of those cases where people say
(32:31):
the ship looks like it's sinking. I don't know if
it's sinking, but let's go ahead and get in the
lifeboat just in case. Well, that wraps up this episode.
It was fun to kind of talk about this and
to go over Sony's announcement. Uh. It surprised me when
I heard about it, and then I had to learn
more and it was all have fun to kind of
go down this sort of guess this estimation about whether
(32:55):
or not E three will stick around. What do you
guys think. I'm curious to hear your thoughts on it.
Maybe that I'm completely off base, and maybe E three
is stronger than it ever has been and I'm just
being silly. I totally accept that that's a possibility. If
you want to get in touch with me, you can
go over to tech stuff podcast dot com. There you're
gonna find links to get in contact with me via
(33:15):
Facebook or Twitter. You can also send me an email
the addresses tech stuff at how stuff works dot com,
and you can go over to our our store, our
merchandise shop. Every purchase you make goes to help the
show and can stop me from stuttering. To be fair,
it's been a very long day. This is the third
episode of recording today, and I'm starting to lose my voice.
(33:38):
But if you want to help me out, and by
help me out, I mean help the show out, go
check out te public dot com slash tech stuff. That's
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to help the show. Don't forget tech Stuff has been
nominated for an I Heart Radio Podcast Award, which is
a huge honor. I'm very very pleased that that's the case.
I'm more pleased that the the people who decide who
(34:03):
gets the award our listeners. So if you think tex
Stuff should win, you can go to I Heart Radio's
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We are in the Science and Technology category, So go
check that out and look around. Maybe there's some other
(34:23):
show that you would really like to see when in
its category, you should go and support it and I
will talk to you again really soon for more on
this and thousands of other topics because it has stuff
works dot com
TechStuff News
Hosts And Creators
Oz Woloshyn
Karah Preiss
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