E3 cancelled for good?

There is shocking, shocking news on Next Gen. They claim to have heard reliable rumours that E3, the Electronic Entertainment Expo, organized by the Entertainment Software Association, is rumoured to be cancelled for good. Here´s their story:

Publishers believe the multi-million dollar budgets would be better spent on more company-focused events that bring attention to their own product lines rather than the industry as a whole.

Well placed sources say the news that larger exhibitors were pulling out had prompted urgent meetings among publishing executives. They decided that, without the support of the larger software publishers and hardware manufacturers, there would be no point in continuing.

ESA president Doug Lowenstein will likely announce the news some time within the next 48 hours, possibly on Monday. It's likely that the ESA will seek to limit the damage by organizing some form of lesser event in May, but it's clear that the days of an industry event attended by all the major publishers, spending big money, are gone.

I don´t believe it.

Allow me to elaborate. It is claimed that the event costs too much. While I know it´s a very expensive event for everyone involved, the ESA, though, should be profiting from it. So when exhibitors were complaining about the costs and threatened the ESA with non-attendance, they could have reacted. At this point, the ESA should have been able to reduce booth rental fees or other costs. This would have cut into the ESA´s budget, but I cannot see how this disadvantage would not have been outweighed by the advantage of keeping the show alive.

Also, it´s the world´s most important show in this industry and it provided publishers with a unique opportunity to present their products to the world. And big media attendance was rising. Every year I noticed more Betacam camera teams at the pre-E3 conferences and the show itself. That should have been worth quite a bit, from a publisher´s perspective.

So I won´t believe this until Doug Lowenstein, head of the ESA, confirms this.

EDIT On the other hand - and just to make this as clear for you as possible - the rumours originate from one of the most reliable sources in the business. The website is run by Future plc, the publishers of EDGE magazine and others. It does make sense to believe this rumour. I simply cannot get my head around it.

EDIT I have just checked the Los Angeles Convention Center´s event calendar and E3 2007 is not listed there. The E3 homepage lists ´May 16-18, 2007´ as the next date and the convention center as the location but the fact that it´s not confirmed on the LACC site shows that nothing has been finalized.

EDIT Now the tidal wave has somewhat died down and we are awaiting the ESA´s official word, I have come to accept that E3 will not be E3 anymore. However, a lot of people are quoting Ars Technica´s take on the story to be a kind of rebuttal of Next-Gen´s claims. Here´s what they write:

E3 has not been cancelled. Next-Gen had hoped that they would blow the lid off of a hot story by revealing that the show had been cancelled, but some quick fact checking shows that they are simply incorrect.

Now, while they make it sound as if they got the story right (whereas Next-Gen apparently got it wrong), they go on to state exactly the same facts as them:

Sources close to the Entertainment Software Association (ESA) tell Ars Technica that the show can and will go on, but that big changes are planned. (...) Sources say that two major factors have led to the decision to transition the show to a more "closed-door" event.

See? The facts are the same. Only Next-Gen interpretes this as ´E3 is finished´, whereas Ars Technica prefers ´E3 as we know it is finished´. The upshot is the same. Even the differences in interpretation are marginal. Ars Technica should really stop pretending they know better. They are simply instrumentalizing this story to elevate themselves into journalistic heaven. And needlessly bashing a reliable news outlet in the process.

EDIT Yet another edit. I just wanted to credit the insiders who broke the story. Incidentally, it was no US site but England-based MCV UK. They reported already on Friday:

Despite the Los Angeles event's undoubted importance and pulling power, some leading companies - and particularly Electronic Arts - have called for a review of the event in terms of budgets required. (...)

MCV understands that a meeting has been held between ESA president Doug Lowenstein (...) and major exhibitors in the US to discuss next year.

"Costs have been getting out of hand. We're talking double digit millions for some of us," said one senior industry insider. "But that's not just floorspace, of course - it's build, parties, hotels, flights. Security, particularly, has become a massive cost."

You might also want to check GameSpot´s coverage.

EDIT I love this. Now Next Gen have updated their article and are responding to Ars Technica and upping the tension.

Some gullible journalists, evidently blinded by a desire to do-down a rival scoop, have taken this as evidence that E3 is alive and well and merely being 'downsized'. But this euphemism doesn't change the facts. The decision by big manufacturers and publishers to walk away has left ESA in damage-control mode. As we reported yesterday, E3, in its present form, is dead.

This is turning into a slagging match. Allow me to spell this out: Both news sites are saying the same thing. This is a phantom discussion.

Sources: Next Gen, Ars Technica
Thanks to: Joystiq, SG007