Is E3 game gathering still influential?

The video game industry's best-known event, E3, kicks off this week in Los Angeles, but most observers are expecting a lack of the kind of knock-your-socks-off news the show has been famous for in years past.

Perhaps the biggest E3-related news of all, that Microsoft announced it's cutting the price of its Xbox 360 to $300, came Sunday, ahead of the company's big press conference Monday.

In its heyday at the Los Angeles Convention Center, E3 was the world's largest video game convention, famous not just for its major product surprises, but also for its eardrum-splitting noise, monstrous crowds, and barely clad "booth babes"--all of which contributed to it generally being seen as an example of the excesses of the industry.

After the 2006 iteration of the show, however, E3's lords and masters in the video game industry decided to dial down the intensity by several orders of magnitude and announced the show would no longer be held at the gargantuan convention center or be open to the teeming masses.

Instead, the show was moved to nearby Santa Monica, Calif., and held in hotels. The result was a much smaller, invite-only affair that lost a lot of its excitement but perhaps better served its core purpose of bringing publishers and platform companies together with journalists and analysts.

Now, E3 returns to the Los Angeles Convention Center, albeit in the smaller format of last year. It starts Monday with Microsoft's press conference and one by leading publisher Electronic Arts, and continues Tuesday with similar events by Sony and Nintendo. The official part of the show starts Wednesday.

But the industry now finds itself with a growing number of press events, conferences, and conventions throughout the year and around the world, and in the middle of a console cycle. All three major consoles, Microsoft's Xbox 360, Sony's PlayStation 3, and Nintendo's Wii, are more than a year and a half old--and some are questioning whether E3 is still relevant.

"I think it's a pretty low-key show now," said Van Baker, an industry research analyst at Gartner who focuses mainly on the console side of the business. "It's more like some of the traditional trade shows (in that) it's all about business...I'm not even going to bother to go. I just don't think I'm going to get anything out of it."

Others, of course, feel differently, and think E3 is the perfect place to showcase the wide variety of big games coming out in the next year or so.

"We're going crazy over E3," said Adam Sessler, host and managing editor of video game TV network G4's show X-Play, which will be featuring 17 hours of live E3 coverage this week. "This is definitely the biggest (E3) in terms of the amount of games you can see...So we're having 35 live demos on our stage."

To Sessler, the excitement is clearly about the games, a natural state of affairs given that most people think there is likely to be little interesting console news beyond the Xbox price cut.

He said he is most looking forward to demoing Fallout 3, from Bethesda Game Studios; Gears of War 2, an Xbox exclusive from Epic Studios; Resistance 2, a PlayStation 3 exclusive from Insomniac Games; and Mirror's Edge, from Electronic Arts.

Indeed, Sessler said he thinks the industry hasn't had as strong a lineup of forthcoming titles in a long time.

"In terms of the goods that are (about to be) available, I haven't seen an E3 like this in five years," he said. "I'm very proud of the industry in terms of the quality of titles available."

Yet to observers like Baker, the problem with this year's E3 is that most of the games people are most excited about have been announced for a very long time, and there aren't expected to be many new titles revealed this week that will shake anyone up.

"Pretty much all the major title releases have been done already," Baker said. "And barring a brand new title from one of the established publishers...there's just not a lot of news. It's an off year for the platforms, and that combined with the fact that the major publishers (have already announced all their big games), it's tough to find stuff that's that newsworthy."

Another PS3 price cut?
With the reverberations of Microsoft's Xbox price cut--giving that console a new competitive advantage over Sony's PS3, which costs $399 for the 40GB model--likely to dominate the first day, at least, it is natural to wonder if Sony will counter by slashing the price of its own game machine. But no one expects to see that, especially because the company already did that not too long ago, releasing the 40GB version of the console in October.

"I don't think they're in a position where they can do another price drop," Baker said, "without losing a fair bit of money. (So) I'm speculating that they will choose not to match the price drop."

Others agree, and say the lack of a likely Sony price cut gives Microsoft some breathing room.

"As for Microsoft, I think they don't need to announce anything but a price cut right now," said Brandon Sheffield, editor in chief of Game Developer magazine, "especially since PS3 won't be doing one."

However, Sheffield said he was hoping that either Sony or Microsoft, or both, will announce what he called "motion peripherals," which would essentially be their versions of Nintendo's wildly popular Wiimote.

"It seems like an inevitability, and I've heard lots of rumors on both camps," Sheffield said, adding that he thinks such a move by Sony could mean "the (PlayStation 2) repositioned as a Wii competitor."

That would be a very interesting decision by Sony, and would leverage its massively successful PS2, which even today is still one of the best-selling game machines in the world. It would also lend credence to the company's oft-repeated statement that its consoles have a 10-year lifecycle.

Baker also expects something like this to come out of Sony and/or Microsoft, but not at E3.

"I don't think that will happen at E3," Baker said. "I think it will happen closer to Christmas."

Notwithstanding the enthusiasm of people like Sessler, it seems very likely that this year's E3 is going to be short on news.

But while that might be problematic for the countless reporters on hand, it doesn't mean the event will be a failure.

To Rich Taylor, the senior vice president of communications and research for E3's organizer, the Entertainment Software Association, the point of the show is much more about making sure exhibitors and press convene and that developers and publishers are able to put their heads together.

"We'll know the result (of that) as we get throughout the week," Taylor said, "but all indications are, from early feedback and the way things are teed up, that folks are looking forward to a very successful and positive week."

In addition, Taylor said, the lack of major console announcements frees up mind share for news and discussion about the games themselves.

"Hardware sucks the oxygen out of the room very easily" at E3, Taylor said. "In non-console-launch years, the software becomes the focus (and) we get to see so much of the creativity coming from game developers and game designers."

Part of the problem when it comes to big surprises at events like E3, of course, is that the video game industry is horrible at keeping secrets. That's why the Xbox price cut, the worst-kept secret in the industry for the last week or so, was on everyone's lips long before everyone got to L.A.

But the same dynamic is far less true of the Japanese side of the industry.

"I think any surprises will be in the form of game announcements from Japanese companies," Sheffield said. "They're the only groups that are any good at keeping secrets about their products from the Western press, largely due to the language barrier."

The same could hold true for the hardware side. While everyone seems to think they know what Microsoft and Sony will talk about at their big press conferences (which take place on Monday and Tuesday, respectively), there is little intelligence on what Nintendo has in store.

To Sessler, that could mean the Wii maker has something substantial up its sleeve.

"No one seems to have a clue what Nintendo's going to do," Sessler said, adding that what they do announce "could be one of the biggest eye-openers...I would not be surprised if there wasn't a lot of talk that is Nintendo-focused" after the company's press conference.

And that would be important for Nintendo, Sessler added, because while the Wii is a huge hit, the attach rate of its games "is not very impressive."

"A lot of those casual gamers that bought (the Wii) haven't continued to invest" in games, he said, adding that Nintendo could well address that issue at E3 Tuesday.

Still, when all is said and done, there aren't many people who seem truly enthusiastic about this year's E3, or E3s in the future.

But to Taylor, any talk of pessimism about the show's influence on video games will be undercut by what actually goes on in L.A. in the next few days.

"Anyone who has anything to do with this industry is going to be centralized in downtown Los Angeles" this week, Taylor said, "and I think that is the best indicator of the vitality of E3."