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E3: How to Find Out the Key Facts

E3: How to Find Out the Key Facts

Thu 24 May 2012 7:31am GMT / 3:31am EDT / 12:31am PDT
BusinessEventsPublishingMarketing

Interpreting what you see at E3 is vital to knowing what's really going on

The E3 show can best be understood in comparison to the courtship rituals of male bowerbirds. These birds build and decorate elaborate displays, then perform intricate dances with impressive vocalizations, all as part of the effort to attract a mate. The size and quality of the display, along with the bird's plumage and sounds, signal the health of the bird to prospective suitors. Similarly, the size, elaborate displays and rituals of E3 booths signal the health and strength of the company to retail buyers and the media. A game that will be a best-seller has to have an impressive display, or else you might not believe it's going to be one of the top sellers.

1

The evolutionary origin of the E3 booth

When you enter the E3 show you are confronted by a glittering array of booths large and small, jam-packed with high definition displays, massive speakers, stages and costumed attendants. It's a bewildering sight as you step inside, assaulted at every turn by flashing lights, sounds, and massive crowds. There's a flood of information about every aspect of the video game console business, and every company is trying to attract and hold your attention. Worse, the hype meter is turned up to 11, with stunning breakthroughs and never-before-seen innovations being touted for every other product. How do you extract useful information from this?

It won't be easy, but here are some suggestions to help you sort out the meanings behind what you see and hear at E3. This will be most useful if you're actually at the show, but there is so much video coverage of E3 that you can find out what you need remotely as well as on-site.

Check the display

The first thing to note at E3 is what product is most prominently displayed in a booth; this tells you what the company considers to be its most important product - not necessarily the one that will sell the best, but the the one that could benefit the most from the added attention. Certainly the Wii U will be the featured product at Nintendo's booth. Sony's booth will probably feature the PS Vita, not because it's going to outsell the PS3 this year, but because Sony wants to boost the sales significantly. What will Microsoft feature most prominently? That will be interesting to note... Halo 4? A new Xbox 360 bundle?

At the software publishers, they will be showcasing the title they think can sell the most units this holiday season. Sometimes there will be additional props to drive home the message of a game's importance: An expensive car parked on the show floor, a full-size basketball court, a skateboard ramp, a massive stage with costumed actors... some of these things may be out in front of the convention center, along with a full-size tank or a bikini car wash. You never can be sure just what you might see but you can always correlate the cost and effort with the company's view of the product's importance.

"The size, elaborate displays and rituals of E3 booths signal the health and strength of the company to retail buyers and the media"

What you don't see can be revealing

The next thing to note is who you don't see at the show, and why that is. Some companies, like THQ, won't have a formal presence at E3 because it's just too expensive to do a good-sized booth and they need to conserve cash. Others, like Blizzard, have plenty of resources to spend on a booth but choose not to do so (in its case, Activision can handle its PR needs). Rockstar has often had a booth at E3, but not always. Take-Two was being cagy about when Grand Theft Auto V might ship, so we don't know whether the game will be shown at E3. Rockstar is no doubt working very hard to get the game done as soon as possible; if it's likely to ship before the holidays, then there will almost certainly be a big display for it at E3. If not, don't expect it until 2013.

If there's a company you expected to be at E3 that isn't there, you should know the reason why. Is it financial? Is E3 too much of a distraction from getting a product finished? The answers can be revealing. Don't hesitate to ask about it; you may hear some interesting rumors.

How close is the product?

Typically companies will want to feature their biggest products for the holiday season. If they are devoting significant resource to a product that isn't arriving until next year, that's usually a sign that their lineup this year is not as important. The further away the ship date is, the less certain the ship date becomes. If a company is talking about a product that won't show up until next year, don't place too much credence in their ship date.

Non-console or PC products

If a publisher is talking about their mobile or social titles at E3, that's interesting information. Perhaps those areas are becoming more important to the publisher, or they feel they can add incremental profit to their console or PC games. It will be interesting to see just how much of an appearance the mobile and social games linked to console games put in an appearance.

It's worth noting that Gree has a very large booth at E3, even though all its games are for mobile phones. Is it trying to lure potential employees and partners? Impress the media? Thumb its nose at the console business? Take a look at what it's showing and what it's saying; this may be just the beginning of mobile game companies directly attacking the traditional video game business, and the reasons will be interesting to find out.

"Third-party support for the PS Vita at E3 is going to be crucial to its success this holiday season"

Gauging Wii U support

There will be an array of third-party software showcased during Nintendo's press conference. Perhaps there will even be executives from some of the big publishers, talking about how excited they are about the launch of the Wii U and the great games they will build for it. Expect that, and discount it. What really counts is how publishers show Wii U titles in their own booths, because then it's taking up valuable space and mind share. Publishers will showcase the games and platforms that they think will offer them the most potential revenue during the next 12 months, with a bias towards the next 6 months.

If Wii U games are being showcased at third-party publishers, with a large area devoted to them, you'll know that those games are expected to perform well during the holidays by the third-party publisher. (Or that the third-party publisher feels it necessary to impress Nintendo, but that seems unlikely.) By extension, that means the publisher feels the Wii U will sell well. If Wii U games are not featured at third-party publishers, it means that either Nintendo has not put in much effort to court them, or none of the publishers think the Wii U will be that important this holiday season. They could still believe in its long-term potential, however.

The console wars

Which console is going to be hot this holiday season? Check out which one gets showcased at the third-party publishers. If you see mostly Xbox 360s, you'll know that's probably the console to beat for Christmas. (Which shouldn't be a surprise, given that it continues to lead US sales charts month after month.) How much space is the PS3 getting at third-parties? If it's hard to find, it may be that publishers are not as happy with its sales potential in the next year.

The battle of the handheld consoles is also interesting; the 3DS has recovered from its poor launch, but the PS Vita has yet to take off. Third-party support for the PS Vita at E3 is going to be crucial to its success this holiday season. Are publishers supporting it? Are they showcasing it? Are there some software titles that really seem like system sellers? Speculation centers around titles like Call of Duty: Black Ops II; will the PS Vita version be impressive enough to sell systems?

Conclusions

In the end, not every product will succeed despite the expenditure of vast marketing budgets. Massive marketing money can help a mediocre game, but it can't turn a dog into a show horse. Game quality will ultimately determine the maximum potential sales of a game. Marketing can help the game reach that maximum, but never to exceed it.

1 Comment

Simon Garner
Managing Director

11 5 0.5
Rockstar is no doubt working very hard to get the game done as soon as possible; if it's likely to ship before the holidays, then there will almost certainly be a big display for it at E3.
Rockstar will not be at E3, and haven't been for some years. Likewise Blizzard and Valve. I guess they think they don't need to!

Also think the chances of GTA V shipping this year are virtually nil.

Edited 1 times. Last edit by Simon Garner on 27th May 2012 12:22am

Posted:2 years ago

#1

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