In 1992, it was also raining, and the tents leaked.
“We were one of the many video game displayers back there, ourselves and Nintendo and of course a lot of the third party publishers,” Tom Kalinske, former Sega of America CEO, recalled in a phone interview with The Post, “[R]ight over the Sega display, there was a leak at the top of the tent, and so the water was dripping down on my new Genesis 16-bit machines. And I basically said to everybody, ‘Okay, that’s it, we’re never coming back here again, we’re gonna have our own show.’"
The industry felt sidelined and neglected, and many companies agreed they wanted their own show. It was the inauspicious beginning to what is now the annual video game trade show, the Electronic Entertainment Expo, better known as E3.
“At the time, the whole industry was just exploding, and the fact that we were being treated like second class citizens," said Pat Ferrell, who is often credited as the founder of E3. Ferrell was the CEO and President of Infotainment World at the time, which launched GamePro magazines and a TV show. "[We] were just like now, we’re growing in a way where we need to be treated the same as a television or a boombox [at CES]. So we quietly started pitching the vice presidents of marketing, of sales, the guys that we knew in the industry to say, ‘Hey, look, what if we gave you an alternative?’”
Most of the industry was on board, including Sony and Sega. The event would be held in May and replace the industry’s need to go to the annual second CES held in Chicago. Gone were the Porta Potties and leaky tents.
“It was in Los Angeles, one of the media capitals of the world, so we knew that the coverage would be great and Los Angeles would be strong from a retailer point of view, a vendor point of view, and also international visitors coming in,” said Al Nilsen, former head of global marketing at Sega of America. “It was a welcome change. Lots of space within the Los Angeles Convention Center with the two main halls that they have, as well as lots of meeting room space. … And it also provided room for the industry to grow.”
Video games were in the news in a big way at the time, but not like companies wanted: Congress was investigating the connection between violence and video games, namely the bloody and realistic “Mortal Kombat” game.
The industry’s video game association, now called the Entertainment Software Association, then headed by Doug Lowenstein, had just formed in response to Congress’s investigation and needed funds for its work handling video games’ age ratings.
“We went through a lot in those 13 years, with all the controversies around violence and [the] Columbine school shooting, and Congressional investigations and piracy, and first amendment battles and court victories,” Lowenstein said of his time working for the ESA. “In the end for me, when the Supreme Court ruled 7 to 2 that video games were a constitutionally protected form of speech, that was probably my proudest accomplishment in my professional life.”
After a “spirited discussion” around the proposed conference, Lowenstein said they liked Ferrell’s pitch for a separate gaming event and agreed to become partners.
“If you look at the founding work of the trade association, it was both to build out a credible industry self-regulatory system for game ratings, to manage the fallout and controversy around violence and games, and create this tentpole event to showcase the industry,” Lowenstein said.
The first E3 was held in May 1995 at the Los Angeles Convention Center, where it would be held every year, with few exceptions. The first E3 featured over 400 exhibitors and 40,000 attendees. Microsoft and Nintendo were initial holdouts, preferring to stick with CES. Ultimately they came around once they noticed most other gaming companies had abandoned the Las Vegas show. Microsoft presented games for Windows 95.
“I had sold all the space in the bays in the big hall,” Ferrell said. “So I had to put [Microsoft and Nintendo] in the West Hall. But I said, ‘You know what? You bet on the wrong horse. Sorry.’"
Sony was there to promote its first PlayStation console, which launched later that year. Sega also presented its new Sega Saturn console, retailing for $399. Steve Race, Sony Computer Entertainment America president at the time, made waves when he announced the PlayStation would cost $299.
Mary Dolaher, who worked as the show’s director alongside Pat Ferrell and then later as senior vice president of the ESA, said, “I can remember pulling up to South Hall, and I had tears in my eyes because of the lines of people outside. I was like, ‘Oh my god, it worked. It’s working. It’s gonna work.’”
From then on, E3 gained momentum. The conference got splashier, drawing attention from Hollywood executives like Steven Spielberg, and keynotes from tech giants like Intel former CEO Andy Grove. In 2000, Microsoft showcased the new Xbox and a montage of new games.
Bumps in the road
Not everything was smooth sailing. In 1997, the Los Angeles Convention Center was undergoing renovations, so the show was relocated to Atlanta for that year and the next. Attendees noted it made for a worse experience navigating the show floor and E3 resumed operations in L.A. after the renovations ended.
Planning out each E3 meant understanding the video game industry’s release schedule. New consoles came out around every seven years, followed by new games, but then there would be a lull in excitement until the next generation. The event was also shifted from May to June, to accommodate game publishers’ release schedules, as they requested more time to prepare.
“There was always news. It was just a matter of whether they held the news for the show. And most people did that and that’s what really helps keep the vibrancy of it,” Dolaher said.
But by 2006, gaming companies were growing tired of pouring millions of marketing dollars into maintaining massive booths, flying out celebrities and putting up giant billboards at E3. They complained to the ESA, which had been enjoying the convention as a lucrative source of revenue. (Ferrell estimated E3 brought in over $20 million a year on average. In recent years, according to public tax forms, that’s held steady at over $30 million in revenue a year, with the ESA reporting $40 million in total revenue in 2019, just before Sony pulled out of E3.)
“That year , I heard pretty loudly and clearly that there is a sense from a lot of the bigger companies that they were reevaluating the [return on investment] on the show. And so after the show, we had to confront that,” said Lowenstein, who left the ESA the following year.
In response, Dolaher and her team designed a more affordable E3 the next year, moving it to Santa Monica, California, limiting the number of attendees to a few thousand, and scaling the event down in size. It wasn’t well-received, with people saying they missed the old venue. It was moved back to Los Angeles in 2008.
“[The companies] need to be guided, but it kept E3 relevant. Because if you [as a gaming company] say to all of your competitors, I’m not going to do another show … then that kills the entire association. So we stopped that from happening, which was great,” Dolaher said.
By 2009, companies were willing to spend again on the lavish spectacle for which E3 had become known for. Microsoft even brought in Paul McCartney and Ringo Starr to promote a new “The Beatles: Rock Band” video game.
Over its 24 years of physical events, E3 remains a destination for game trailer debuts and hardware announcements, from the Wii U to the PlayStation 4 and Xbox Series X, first teased as “Project Scarlett.” But in recent years, E3 has increasingly faced the question of whether it is still relevant. The world is different than what it was in 1995, and so is E3.
“There used to be a whole array of gaming magazines, associated with lots of different game companies, and sold at magazine stands, convenience stories, etc. That used to be one of the most important places to learn about new games,” said Bo Ruberg, associate film and media studies professor at the University of California, Irvine. “Now, almost all of those magazines are defunct. Everything is online instead.”
Retailers like Best Buy and Walmart are no longer the only way to buy video games, the Internet is king and companies can set up a live stream event at the press of a button, without needing to spend millions on a physical booth. Before becoming virtual in 2021, E3 had also opened up its doors to consumers, starting in 2017, shifting into more of a public-facing marketing event, rather than a business-to-business convention.
“The idea used to be that conventions like E3 were the place to deliver glowing keynotes about the next generation of product,” said Laine Nooney, assistant professor and historian of video games at New York University. “The expo exerted a magnetic effect by drawing everyone into the same place over a small period of time, creating a flurry of news coverage. But many companies have discovered it’s just as effective to create tailored video launches designed for circulation through social media.”
While Microsoft continues to use E3 to tease new hardware, Sony pulled out of E3 starting in 2019, and beginning in 2013, Nintendo started airing digital, pre-taped videos rather than holding physical events people could attend. Electronic Arts left E3 proper in 2016, opting instead for its own event held off-site in Los Angeles in the days before E3 began. Blizzard now sits out the show and instead makes some of its announcements during its annual BlizzCon event.
In late 2019, the ESA drew fire for accidentally leaving journalists’ private information in public view, including their home addresses, email addresses and phone numbers. Although the ESA took down the information, it had already been circulated online, a fact often cited on social media by games journalists.
Stanley Pierre-Louis, current ESA president and CEO said in a January 2020 visit to New York, “We know we’ve got a lot to do to earn back the trust of our media partners, and we’re going to be striving to do that.” He added that the association was taking more precautions and would stop requesting journalists’ home addresses.
The covid-19 pandemic forced the cancellation of E3 in 2020, with many gaming companies substituting their own digital announcements throughout the summer. For this year’s all-digital event, the exhibitor list has shrunk to just over 40 companies, compared to the over 100 participants from the last live conference in 2019.
“The value of E3 is that you create a center of gravity around those announcements,” Pierre-Louis said over a video call on Tuesday. “We’re excited about bringing the collection of folks under one tent to be able to showcase that to the world.”
Regardless of what ultimately happens to the annual trade show, E3 is an iconic part of gaming history. Today, video games are no longer as stigmatized as they had been in the mid-90s, although some of the old stereotypes linger for people unfamiliar with modern gaming. Many of the early founders of E3 with whom The Post spoke are no longer directly involved in the games industry, moving on to other fields. For now though, E3 endures as the high point on the game industry’s annual calendar.
“E3 has to continue to evolve, given the dynamic nature of the industry,” Pierre-Louis said. “There’s a difference in the audiences you reach in a physical event versus a digital event, but both are valuable for different reasons. I think exhibitors, sponsors and partners still want to convene in person but they also want to project to a large audience and the question is how do you do both of those things.”