September 2006
The Twilight Zone

You are now entering the twilight zone. Picture this. You’ve launched one of the most successful shows in the last 15 years in one of the world’s hottest industries. Your association’s members collectively account for $7 billion in products sold in the U.S. in 2005, and billions more in export sales of U.S.-made products. Your sold-out show attracted 60,000 attendees and more than 400 exhibitors covering 540,000 square feet this year. In fact, you cut 16,000 prospective attendees from your pre-reg so you can ensure you’ve got the most qualified buyers and media. Then, after the show’s over, a handful of your bellwether exhibitors tell you they’re done with your event.

Unfortunately, this is not the stuff of science fiction, but a reality for the Electronic Entertainment Expo (E3Expo), owned and produced by the Entertainment Software Association (ESA). Last month, the association announced it’s changing its format from a traditional trade show to a more intimate event focused on targeted, personalized meetings and activities beginning in 2007. They really had no choice but to concede to their members’ wishes.

Shocked as we all may be, know that E3 and ESA are far from your typical association and trade show. ESA has only 26 members, who account for 90 percent of the gaming industry’s sales. They’re companies like Sony, Electronic Arts, Nintendo and SEGA, and they don’t want to spend millions of dollars on their exhibits to compete for buyers’ time and attention with the 375 other exhibitors who aren’t association members. They don’t need to. Less than 30 buyers control 80 percent of the retail market, and these major video game companies host their own corporate events for this select group. And as much as the E3 staff no doubt feels compelled to help their non-member exhibitors, an association exists to serve its members. It may be the only time in history when a team of 26 beats 375.

Naturally, there’s no shortage of opinions on the show’s demise. There are hundreds of articles in the mainstream media outlets and trade magazines, as well as posts on new media outlets. Some of the chatter: It’s the end of big horizontal trade shows. Trade shows are too expensive for exhibitors to justify the return. Attendees were tired of dealing with the huge crowds and long lines at booths.

What impact will all this have on our industry? I doubt there will be any long-term negative impact. The industry didn’t crumble after the fall of COMDEX, which received nearly as much exposure. But in the short term, the negative media attention will certainly have corporate America questioning their participation in trade shows.

And although I think the E3 situation is so unique that I can’t image too many other shows in a like position, I do think this should serve as a wake-up call for many that exhibitors, especially big-spend exhibitors, have simply got to start seeing a return on their investment. Think about it. Could your show survive the simultaneous pullout of your five largest exhibitors?

Who knows, Mary Dolaher, Vice President of Events for E3, and her team may create an incredible new event that will serve their members in a unique and exciting manner. Sadly, though, it won’t be a trade show. As Rod Sterling might say, we’re on “a journey into a wondrous land, whose boundaries are that of the imagination.”

Danica Tormohlen, Editor
dtormohlen@ascendmedia.com