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E3 is headed for extinction - Pachter

Analyst believes ESA must strike balance between old and new or risk the end of annual trade event

Wedbush Morgan analyst Michael Pachter has said that if the Entertainment Software Association doesn't change the format of E3, the show is "headed for extinction."

The comments come after numerous industry executives have slated the new-look show, threatening to stay away from future events.

"The solitude of this year's E3 made patently obvious to us that the ESA membership made a mistake in downsizing the show last year," said Pachter.

"Prior to last year, publishers and console manufacturers used E3 to address the needs of their core constituents: media, retail, investors, and consumers. By choosing to eliminate any potential for a consumer element to the show, the ESA chased away much of the television media.

"By scheduling the show two months later than in the past, retailers stayed away. By scheduling the show during the calendar quarter financial quiet period, only limited access was provided for buy and sell side analysts. ESA leadership appears to agree that the timing and scope of the show is a mistake, but is hamstrung by some of its more influential members, who appear to be pettily reluctant to spend money in order to showcase the industry," he added.

Pachter said that the ESA must strike a balance between the huge 60,000 attendees of the old E3, and the relatively small 5,000 person shows of the of the past two years.

"We spoke with several ESA members, and believe that the vast majority prefer to return to the glory of past E3s. In our view, E3 as currently configured is headed for extinction, and the industry is quickly running out of time to fix the show.

"We think that the traditional 60,000 person trade show may have been too large to manage effectively, but think that the new 3,000 - 5,000 person shows are a terrible disappointment, even though the logistics were improved over last year’s spread out Santa Monica locale," said Pachter.

"We believe that the lower costs for the show were more than offset by the loss of millions of dollars of free publicity, and are hopeful that the ESA restores the audience to a manageable, but spectacular size."

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Latest comments (1)

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.12 years ago
I do hope that all these recent outcries are not fallen upon deaf ears at the ESA. It's obvious now that if things are changed for the better, membership will drop dangerously low.
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