That time the industry almost killed E3

The games industry moves pretty fast, and there's a tendency for all involved to look constantly to what's next without so much worrying about what came before. That said, even an industry so entrenched in the now can learn from its past. So to refresh our collective memory and perhaps offer some perspective on our field's history, GamesIndustry.biz will run a monthly feature highlighting happenings in gaming from exactly a decade ago. The column took last month off, so this edition will cover events from July and August of 2006.

The ESA's embarrassing E3

As much as the ESA may object to the annual parade of "Is E3 still relevant?" editorials across the gaming press, it's a question the event organizers raised themselves a decade ago. In the aftermath of a massive E3 2006 that saw 60,000 attendees crammed into the halls of the Los Angeles Convention Center, the ESA decided the format simply didn't work any longer.

"The world of interactive entertainment has changed since E3 Expo was created 12 years ago," said then-ESA president Doug Lowenstein. "At that time we were focused on establishing the industry and securing orders for the holiday season. Over the years, it has become clear that we need a more intimate program, including higher quality, more personal dialogue with the worldwide media, developers, retailers and other key industry audiences... It is no longer necessary or efficient to have a single industry 'mega-show.' By refocusing on a highly-targeted event, we think we can do a better job serving our members and the industry as a whole."

For 2007, the show would be downsized to about 5,000 invited attendees, renamed the "E3 Media and Business Summit," and moved to nearby Santa Monica even though it cost the ESA $5 million just to get out of its contract with the LACC.

So how did the new and improved E3 go? People hated it. In response, the ESA moved the show back to the cavernous LACC for 2008, but made the odd decision to keep the downsized attendance. Naturally, people hated it even more. I really can't stress that enough. It was loathed, so much so that the ESA basically undid most of its changes to the show to make E3 2009 the big-time spectacle that people had grown accustomed to before, albeit with more stringent admission policies to keep attendance down to a more reasonable 41,000 and no Kentia Hall.

And just in case anyone's looking for a fun fact to plug into next year's editorial about E3's importance (or lack thereof), consider this. E3 2007 and 2008 may have gone down as the two most disappointing shows since the annual event relocated from Atlanta in the late '90s, but the games showcased there helped drive the three most lucrative years the US retail games industry has ever seen, 2007 through 2009. For all the talk of E3 as a springboard to the masses, it doesn't seem to be all that crucial when the industry has a robust lineup of products the masses actually want, as it did back then with mainstream phenomena like Guitar Hero, Rock Band, and the Wii.

Good calls

• It may be hard to believe, but in 2006, episodic gaming was one of those "next big thing" trends with the potential to reshape the way people make and play games. Bear in mind, this was months before Half-Life Episode 2 came out. So when Epic Games VP Mark Rein called the episodic model "broken" at the Develop Conference, there was a fair bit of pushback. Telltale's considerable success aside, we'll say Rein accurately underscored some key reasons the model didn't take off, making him 2-for-2 on bold predictions in the 10 Years Ago column.

• Midway made a lot of bad calls in the first decade of the millennium, which explains in part why they aren't here for the second one. But not all the calls were bad. For example, Midway's European marketing director Al King predicted the next-gen console race would be more or less a wash, with the Wii, PS3, and Xbox 360 each claiming about one-third of the market. If we're going by hardware unit sales, the breakdown was closer to 38% Nintendo and 31% each for Sony and Microsoft, not quite even but close enough for us.

• Kaz Hirai accurately predicted the PlayStation 3 would have a 10-year life cycle. With nothing much left on the way besides sports titles like Madden and Pro Evolution Soccer, the PS3 seems ready to give up the ghost right on time. Sleep now, old friend.

Bad calls

• Sure, the Hirai call is less impressive considering Sony executives would have a bit of insider knowledge, but that doesn't stop them from getting things about their own company wrong. For example, when hyping the PS3's digital distribution capabilities in a magazine interview, Sony's Phil Harrison predicted a purely digital future, saying, "I'd be amazed if the PS4 had a physical disc drive." We're going to guess when the system was launched with a disc drive in 2013, Harrison wound up not being amazed.

• Harrison wasn't the only one declaring the death of physical media in 2006. Rez and Lumines designer Tetsuya Mizuguchi told us, "Maybe in 10 years, kids will be mocking their dads for having gone to shops to buy games at all." Should this one even be considered a bad call? Between the distinct possibility that I'm out of touch and kids' propensity to mock their parents for literally anything, that's almost certainly technically true. But in the broader "people will laugh at us for ever having purchased physical games" sense, it doesn't seem like we're there yet.

• At least the PS4 and the full-tilt digital shift were still years away when Harrison and Mizuguchi made those predictions. The Wii was just months away when Electronic Arts executive VP and COO of worldwide studios David Gardner said the publisher expected the hardware to sell for $170, which he called a great consumer-friendly move that would allow people to buy a Wii in addition to another console. Nintendo, which at that point had repeatedly said the Wii would be priced under $250, eventually priced the Wii at $249 for the US launch. It stopped essentially nobody from buying one in addition to another console.

Flashbacks

• Remember above where Kaz Hirai said the PS3 would have a 10-year lifecycle? When asked if that meant the PS4 would be more than five years away, Hirai replied, "I can't speculate on when we might come out with a new console after PlayStation 3. But my message is that once you become a family in the PlayStation family of products, you become a family member." It's worth noting that the PS Vita member of the family has been missing for years at this point and Sony has yet to fill out a police report. I'm beginning to think they don't actually want it to be found.

• 10 years ago, EA acquired Spellforce developer Phenomic. The German real-time strategy studio was rebranded EA Phenomic, and would produce SpellForce 2, BattleForge, Lord of Ultima, and Command & Conquer: Tiberium Alliances before being shuttered in 2013. That's a pretty good run by EA acquisition standards.

• Xbox Live Arcade was the surprise hit of the Xbox 360 launch, so much so that Microsoft was totally unprepared to supply it with new games regularly. After a particularly bleak two-month stretch with no new games after the release of Uno, Microsoft ran a promotion promising a new title every week for five weeks. As if that weren't enough, then they said were hoping to keep up that blistering pace indefinitely! One new game on a digital storefront every single week? Inconceivable!

• Happy 10th anniversary to Arkane Austin and nDreams! The former helped push the Arkane name into the top tier of developers with its work on Dishonored, while the latter built a viable business on the oft-derided PlayStation Home and has parlayed that success into a leadership position in the emerging field of VR.

Remember, you can find plenty more historical perspective on how far we have come as in an industry in the last decade (or not come, as the case may be) on the @GIbiz10YearsAgo Twitter account.