E3 2008: Game over for the Electronic Entertainment Expo?

This week brings us the annual Electronic Entertainment Expo--the video game trade show better known as E3. This is E3's 14th year, and my 10th time attending the show. But despite booming game sales and a firm foothold in the mainstream pop culture marketplace, the future of this gaming event is in jeopardy.

After years of big-budget extravagance for an audience of 60,000-plus visitors at the Los Angeles Convention Center, the game companies that form the backbone of the show felt their budgets were spiraling out of control, and even the large amount of media attention they got from E3 wasn't worth the millions they put into building massive booths and displays.

So for last year's show, the Entertainment Software Association (or ESA), the trade group that actually runs E3, decided to scale back the show,moving it from May to July, and from Los Angeles to a series of small hotels in Santa Monica. The attendance was cut as well--from around 60,000 people representing everything from TV and magazines to small blogs to retail workers at game stores--to a smaller list of around 5,000 invited guests.

The smaller 2007 version of E3 (dubbed Min-E3) got mixed reviews, and was purportedly almost as expensive to put on, so this year we're back at the good old Los Angeles Convention Center, but the still scaled-down show will occupy just one hall and a series of meeting rooms, and will be almost unrecognizable to anyone who attended in previous years.

Adding to E3's woes, several key game companies have left the ESA in the past few months, including Activision, Vivendi (those two companies are merging to form Activision Blizzard), Lucasarts, and id, the company behind the Quake and Doom franchises. Without their support (and membership dues), the trade group may have a hard time putting on the show in future years.

But enough of the doom and gloom--here are a few things to keep an eye out for this week:

1. Xbox 360 price cut to $299--(Note: This is actually official as of Sunday, see here for details.)

2. Sony will push the holiday season release of two long-delayed casual gaming projects: the cooperative platform game Little Big Planet and Home, an online meeting place for 3D avatars and the backbone of the PlayStation 3's community platform.

3. Nintendo will be pressed to address the storage problem on the popular Wii console. There are plenty of classic games available to download through the Wii's online store, but the console lacks a hard drive to store anything more ambitious.

4. Fallout 3--this free-roaming post-apocalyptic RPG seems to have the same preshow buzz that BioShock did last year. If the gaming press anoints this the "it" game of the show, it could be a serious holiday season contender.

5. Rock Band 2 and Guitar Hero World Tour--a year later, and we've got two new versions of the dueling faux rock simulators. The question is: will these new versions continue to innovate, or will consumers tire of being pushed into another Madden-like annual update cycle?