The rise and fall of E3
Initially, respect was hard to come by for the video game industry.
In the '90s, gaming was often disrespected. Tom Kalinske, who headed Sega America, has two stories that encapsulate this sentiment perfectly.
One notable instance occurred during the 1993-1994 U.S. Senate hearings on violent games. Kalinske was summoned by senators to explain that games were not merely for children.
"They laughed it off," he remembered. "They couldn't take it seriously. They said, 'Everyone knows video games are just for kids. You shouldn't be making them so aggressive.' Then they essentially showed me the door."
In another encounter, Kalinske approached Jack Valenti, Motion Picture Association head, to propose using the film industry’s age rating system for games due to its familiarity. Valenti declined, questioning why the dominant film industry should support the fledgling gaming industry in this way.
Government scrutiny over violent games eventually led to the creation of the Interactive Digital Software Association (now the Entertainment Software Association). This new organization was founded to develop a ratings system, thus avoiding government regulation. The games industry had united, and having a dedicated event to showcase the medium soon became a priority.
In 1994, gaming companies gathered at the Consumer Electronics Show (CES) in Las Vegas to present their products to retailers and the press.
"CES didn't care a jot about video games,"
Tom Kalinskie, former Sega US boss
Kalinske recalled that CES frequently relegated gaming companies to the back of the hall, and one year even placed them outside in a tent, behind adult entertainment sections. That year, rain leaked into the tent, damaging Sega Genesis consoles. Kalinske decided then that they needed their own event.
Negotiations with CES for better representation failed. Consequently, the IDSA collaborated with the International Data Group, which managed GamePro magazine and Macworld conventions, to create a dedicated video game trade show. CES's last-ditch attempt to counter the event was unsuccessful, and E3 was established.
Mary Dolaher, who managed E3 from its start until its last physical show in 2019, reminisced, "Gary Shapiro [Consumer Technology Association head] called it Black Thursday because CES received so many cancellation faxes."
Peter Moore, who exhibited at E3 from 1999 with Sega, Microsoft, and later EA, mentioned, “We desperately needed recognition. In Hollywood, TV, and music, video games were often maligned. I testified before the Senate on behalf of video games in 2000, and they were viewed as the root of all evil. Headlines in the UK were always 'Call of Duty killer.' Video games were easy targets, so building a significant moment like E3 was key to showcasing what gaming offered to entertainment."
The inaugural E3 event in 1995 was highly competitive, despite not being as extravagant as later years. Major players like Nintendo, Sony, and Sega were present to flaunt their new consoles: The Ultra 64, PlayStation, and Sega Saturn. Nintendo was still a year from releasing its console, placing Sony and Sega's CD-based systems in the spotlight.
Despite Sega's strong US presence, concerns about the Saturn's capabilities and the hype around Sony's console loomed. Sega's solution was to launch the Saturn at E3, four months ahead of schedule, to outpace its competitor.
"I wasn't fond of the Saturn’s architecture," Kalinske shared. "My R&D head, Joe Miller, and I thought it needed a bigger upgrade. Despite my reservations, Japan pushed us to introduce it at E3 with limited titles and hardware."
Sony retaliated strategically. PlayStation’s US chief Steve Race took the stage and uttered a single phrase: '299'. This indicated that Sony's console would be $100 cheaper than the Saturn—a decisive move.
"Ah, the shortest speech in E3 history," Race chuckled. "We were still debating the price that morning and had to negotiate with the Japanese to hit the magic $299 mark. If they had insisted on $399, I have no idea what I would have said."
The console war battleground
This event marked the beginning of E3’s association with platform wars, as the leading hardware developers clashed in Downtown LA.
"E3 was always the battlefield for the console war," Moore reminisced.
"Each year, the question was, 'Who won E3?' Everyone wanted to know whose press conferences were the most impressive, who showcased the best content, and who drew the largest crowds. It was a fight for dominance in a rapidly expanding industry. E3 was the battleground and the canvas where we displayed our industry’s progress."
"In the old days, it was a Wild West—about pushing limits and convincing gamers they were witnessing something extraordinary,"
Peter Moore, former Sega, Xbox, and EA executive
Peter Moore's initial experience in the console wars began with the fierce battle between the Sega Dreamcast and the PlayStation 2.
"My rivalry with PlayStation dates back to my time with Sega, when Sony used FUD tactics—'fear, uncertainty, and doubt'—against us," says Moore. "Take a look at games like Kessen and The Bouncer on the PS2. Those titles featured more cinematics than actual gameplay, and they likely weren't even rendered in-engine. Even after 24 years, those games stay in my memory. Back then, I was new to the video game industry, having come from Reebok, and I couldn't believe those games would actually look the way they were presented. During those days, there wasn't as much scrutiny from the media and regulators. Now, the FTC demands transparency in game presentations, but back then, it was a real Wild West scenario where anything went as long as gamers believed it."
Moore had another clash with PlayStation when he joined Microsoft and helped launch the Xbox 360.
"Sony tried to undermine us again with the PS3, but it didn't succeed. Their pricing was off the mark. We had our own setbacks, like the Red Ring of Death, but we managed to pull ahead.
"It was a real fight. If you look back at photos of me with a Halo 2 tattoo or a GTA 4 tattoo, it was all about showing PlayStation that we meant business with some characteristic Scouse swagger. PlayStation released a Killzone trailer that was misleading, giving the impression that it represented real gameplay, which it didn't. They felt the pressure to compete because we were leading with the Xbox 360 launch, so they produced a cinematic pretending it was actual gameplay."
The PS3 era marked a challenging time for Sony during E3, as recounted by Shawn Layden, who held various leadership positions at PlayStation.
"We were setting up the stage, and then suddenly everything crashed. We had engineers working on the spot, updating code in real-time to stabilize everything. This caused a delay, making people wait over two hours in the intense Southern Californian heat for the PlayStation 3 press conference."
"And when we revealed that the PlayStation 3 would cost $599 for the 60GB version, the audience's reaction was overwhelming disappointment. The PS3 years at E3 are filled with tough memories for me."
While PlayStation faced hurdles, Nintendo had a noteworthy moment at E3 in 2006, as they prepared to launch the Wii.
"I remembered a sea of people charging through Sony's booth to get in line to try the Wii"
Rob Matthews, former Nintendo and Xbox executive
"We were unsure how people would receive the Wii," recalls Rob Matthews, who was Nintendo’s head of consumer marketing at the time. "But I remember standing on the upper deck, watching crowds run through Sony's booth to queue up for the Wii. I knew then that we had something special."
Perrin Kaplan, former VP of marketing and corporate affairs for Nintendo, agrees. "Our booths were right next to each other, and people just flooded ours. The line wrapped around our sizable booth twice. The Wii was groundbreaking, and it was incredible to be a part of that."
E3 was a competitive arena where rival companies openly poked fun at each other. One memorable instance was Sony's video mocking the Xbox One's game-sharing options in 2013. There were even accounts of sabotage, like the deflation of Sega's giant Sonic balloon by Sony in 1995. This competitive spirit was palpable in the E3 halls, where Nintendo, PlayStation, and Xbox set up close to one another.
"It was exciting having the big three in the same hall," says Matthews, who later joined Xbox and oversaw their E3 presence. "We constantly had to be on our toes. Xbox was often right next to Sony, with our green wall glowing beside their blue one. There’s that famous picture of our logos facing each other down the hall."
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The Evolution of E3
As E3 matured, the event grew increasingly extravagant. Companies vied for hall space, the parties became grander, and costs soared.
"The excesses were remarkable," reflects Layden about the early years of E3. "The years spent in Atlanta, Georgia, were particularly extraordinary. The industry was highly profitable, with Tomb Raider being a massive hit, and the accompanying party was as wild as you'd expect. The industry was truly emerging from obscurity."
This newfound prosperity attracted questionable elements. The E3 organizers began stringently vetting participants to keep undesirable companies out. Some businesses claimed they had games to showcase when in reality, they were promoting unrelated services such as modeling agencies.
E3 also mirrored the predominantly young, male gaming culture at the time, with scantily clad female models being a common sight. In 2003, Nokia introduced the price of its N-Gage gaming phone by having a model display the price on her stomach after removing her top, and such practices sometimes extended to the exhibition floor.
"Exhibitors pushed boundaries more each year in their attempts to garner attention," Dolaher recalls. "One company with a small 10x10 booth had a woman who stripped down to almost nothing. ESA members told us that if companies needed such tactics to sell their games, they perhaps shouldn't have a place on the show floor."
When the offending company refused to vacate the show, Dolaher cut off the power to their booth. In retaliation, the company attempted to sell the model's lingerie online, prompting the event organizer to take even more drastic measures.
"I covered their booth in plastic wrap," she chuckles. "We used huge rolls, but left the top open because he wouldn't leave. I joked, 'I'll give you some air.' It was hilarious."
"One company had a small booth featuring a woman who stripped down to almost nothing."
Mary Dolaher, E3 organizer
The incident led to stricter guidelines on appropriate attire at E3.
"We consulted all the member companies about what we should consider appropriate and how to frame the rules. I contacted everyone in the event industry I knew. Most didn't have it as bad. It was extreme. We required companies to show us their uniforms and costumes in advance for approval.
"Then we conducted floor checks. It was labor-intensive but necessary. We made the event PG-13. Dresses had to be of a certain length, shorts were prohibited, and thongs were banned. It seemed absurd at the time... I received a lot of death threats.
"People called me an old ugly b*** who probably drives a minivan. And I thought, 'Hey, I draw the line at "minivan".'
The Experiment in Santa Monica
Meanwhile, E3 was gaining mainstream visibility with politicians and celebrities attending, drawing major media coverage.
"During the mid-2000s, mainstream media like CNN, CBS, ABC, and NBC would send film crews to E3," says Moore. "It affirmed the relevance and significance of the event."
However, with its growth to 60,000 attendees at the LA Convention Center, ESA members felt it was too loud and chaotic for productive business. This led to the creation of the E3 Media & Business Summit. In 2007 and 2008, attendance was limited to 5,000 people and the event moved to a hangar in Santa Monica, with press events in nearby hotels, creating logistical challenges due to limited truck parking.
"It was a failure," recalls Moore.
Dolaher notes: "There was a lack of excitement, none of the grand media interactions. And the industry noticed."
The Santa Monica experiment, despite its downsides, is credited with saving E3.
"It was a transitional time for ESA leadership, and fortunately, we convinced the Board to downsize the show instead of ending it. Despite logistical challenges, it kept E3 going long enough to return stronger. In 2009, we relaunched in Downtown LA with 41,000 attendees."
E3’s Celebrity Influence
E3 quickly regained its former glory as the video game industry's Hollywood event. Held in Los Angeles to attract entertainment media, actors, athletes, and musicians frequently attended.
Many associated with E3 have celebrity stories. Leon Winkler, who managed Ubisoft’s E3 event from 2014, recalls pitching E3 to Rob McElhenney for his Ubisoft-backed series "Mythic Quest" and sharing a cigarette with Elijah Wood.
"We discussed his work and his experiences in Amsterdam. These candid moments create lasting memories," Winkler explains.
Moore often shared the stage with sports icons, or guided Steven Spielberg around the booth.
"One memorable moment was being backstage with Muhammad Ali during my time at Xbox," Moore recalls.
"EA Sports was promoting Fight Night and Knockout Kings, so we invited Muhammad Ali. He was in the advanced stages of Parkinson's, and I was tasked with keeping him company off stage. We watched a Halo scene where Master Chief defeats a Brute, causing the Brute to crash. Muhammad leaned over and whispered, 'Down goes Fraiser,' a famous boxing quote by Howard Cosell. It was unforgettable. Then we went on stage together."
Various prominent figures from Pele to The Beatles have appeared at E3. Keanu Reeves’ "You’re breathtaking" line at E3 2019 stands out as one of the most memorable moments of recent years.
However, one of the biggest stars of E3 remains from within the industry itself.
"We've hosted many celebrities, including Usher and The Beatles. But meeting Shigeru Miyamoto was the most impactful for me," says Matthews.
Perrin Kaplan shares a laugh: "Getting Mr. Miyamoto from the front door to the booth without delays was our yearly struggle. Fans wanted to meet him, and he used to wonder why. I had to explain, 'Your games inspire them. You're a legend.'
"Our biggest challenge annually was guiding Mr. Miyamoto from the entrance to the booth."
Perrin Kaplan, former Nintendo executive
Miyamoto had several iconic E3 moments. The most notable was in 2004 when he took the stage with a sword and shield following the trailer debut for "The Legend of Zelda: Twilight Princess," earning a rapturous reception from fans.
Ubisoft recreated a similar moment in 2017 during the reveal of "Mario + Rabbids: Kingdom Battle". Miyamoto and Ubisoft CEO Yves Guillemot appeared with replicas of in-game weapons.
"Initially, Nintendo was hesitant about the idea of using a smoke machine for Miyamoto's dramatic entrance," says Winkler. "But we convinced them to try it during rehearsals. On the day, Miyamoto thought it was cool."
"We have two legends on stage – Miyamoto and Yves – and they are armed. This became the defining image of E3, seen everywhere that year."
Despite the celebrity appearances, Winkler believes the personal moments truly defined E3. While the famous Mario + Rabbids pose captured many eyes, it was the video of Davide Soliani, the game's creative director, in tears that struck a chord the most.
"Events allow us to showcase our humanity," Winkler mentions. "Witnessing Davide's emotional response during rehearsals prompted us to ensure a camera was ready. It's significant because it brings out the human side of our industry. Here was Davide, a lifelong Nintendo fan, receiving praise from his idol. I would become emotional too."
Extravagant displays, orchestras, and live performances
The grandeur of E3 booth setups was unfathomable. Standout exhibits included Capcom’s Resident Evil 7 house replica, Bethesda’s Fallout 76 vault, and a massive Mafia 3 booth replicating New Orleans.
"The competitiveness among game companies was evident in booth elaborateness," Dolaher reflects. "I didn't foresee overseeing tasks like Marines rappelling from the Los Angeles Convention Center or setting up a full-scale boxing ring and a castle."
Nintendo’s booth consistently stood out, often feeling more like a Disneyland attraction. During the Switch era, this included elaborate recreations of Hyrule, New Donk City from Super Mario Odyssey, and Luigi's Mansion.
"The booth's creation was laborious and costly, driven by Don James from the first show to the final one," Kaplan remarks. "He remains at Nintendo. His passion shaped the experience, aiming for utmost satisfaction."
The opulence extended beyond booth presentations. Layden reminisces about Sony’s E3 2016 press conference at the Shrine Auditorium, which featured a live orchestra.
"After the sports arena was demolished, we opted for the Shrine Auditorium," he says. "It was built in 1927, so instead of modernizing, we embraced its vintage charm with velvet curtains and an orchestra pit. Bear McCreary led the 87-piece orchestra in what was an unforgettable experience."
"It's an indelible memory of E3 for me, along with getting nudged out of the food line by Macy Gray at the PlayStation party."
Consider the lavish nature of Microsoft's Kinect showcase in 2010 where they collaborated with Cirque Du Soleil.
"During planning, a unique approach was needed," Matthews recalls. "I suggested a Cirque Du Soleil-style event. We contacted them, met in Montreal, and laid out our vision. They later visited us, transformed a Microsoft's conference room into a mini-theatrical space with music and lighting, and proposed an immersive show."
"That live performance was a career highlight. Even amid rehearsal issues with stage rotations and screen syncing, the live execution was seamless."
The live nature of E3 presentations often carried a sense of unpredictability, especially with game demos.
"Issues cropped up regularly," Moore explains. "We always had backup systems in place to seamlessly switch if a game malfunctioned. For instance, when Gears of War crashed, few noticed because the backup took over almost instantly."
Matthews adds: "Multiple backup systems were always in place to ensure smooth show operations."
Yet preparation couldn't always prevent mishaps.
"Once, while playing Rock Band with Harmonix live, I accidentally paused the game," Moore recalls with humor. "Although rehearsals went well, the lag during the live show caught me off guard. It's a moment I look back on with mixed feelings of embarrassment and amusement."
EA, Sony, and Microsoft Exit the LA Convention Center
Participating in E3 required significant time and financial investment, with the entire industry setting its focus on the event. Companies often delayed announcements until E3 week, developers dedicated resources to creating specific game demos, and entire teams worked year-round for the event.
Rob Matthews, a former executive at Nintendo and Xbox, stated, "We basically produced the equivalent of the Grammys every year with the main press conference and show." A considerable portion of his team dedicated much of the year to this preparation.
"We basically produced the equivalent of the Grammys every year with the main press conference and show"
Rob Matthews, former Nintendo and Xbox exec
Shawn Layden added that planning for E3 was extensive, freeing up a significant number of work hours across the industry once it was removed from schedules. Often, the demo code created for E3 was not part of the main game and was discarded afterward.
"High-level TV producers, akin to those who work with Disney and major networks, were brought in to organize the E3 show," Layden remarked, highlighting the high-stakes nature and immense pressure of planning the event.
Peter Moore revealed the financial burden of E3, noting that expenses reached tens of millions of dollars, covering everything from booth construction to attendance for hundreds of employees. Besides the financial cost, productivity also suffered as employees were diverted from their usual tasks for months to concentrate on E3 preparations.
Ultimately, the mounting time and financial costs became harder to justify. The role of retail was diminishing with the rise of digital distribution, and June, the month of E3, was too late to be selling to retailers for the holiday season. Layden noted, "You had to sell Christmas business in February. By the time E3 came around, you're not selling anything anymore."
The importance of media was also waning as publishers increasingly engaged directly with consumers. Nintendo, for instance, ceased its press conferences in 2013, preferring pre-recorded videos aimed at fans. Moore reasons that direct-to-consumer strategies contributed to E3's decline, reducing the media's influence.
Layden agreed that E3 had shifted away from being a true trade show by 2015, with publishers vying to outdo each other rather than focusing on business, and media breaking news continually undermining embargoes.
In 2016, EA became the first major company to leave E3, opting to hold its own event, EA Play, simultaneously in the same city. "We decided to just do our own," said Moore. By pulling out, EA anticipated others would follow, leading to the eventual decline of E3. They felt that direct engagement with gamers was more valuable than spending large sums for a presence at E3.
E3's stringent rules deterred flexibility. Companies risked losing preferable spots if they skipped a year, prompting firms like Capcom and Take-Two to maintain a presence even with less prominent projects. Despite these endeavors to keep exhibitors, traditional practices created friction as preferences for B2B versus consumer-facing events varied among publishers.
In an effort to address these issues, E3 Live was introduced in 2016 at the LA Live complex, but late announcements led to disappointing results, adding to the frustration of organizers.
Eventually, the organizers started selling consumer tickets to the main E3 show in 2017, but the event structure was not conducive to consumer experience, leading to Sony's withdrawal in 2019. Layden argued that E3 struggled with its dual identity as a consumer and trade show, and physical design differences further complicated matters. Consumers waiting long hours for game demos exemplified these issues.
"We promised the ESA that we wouldn't set up a competitive event. They could have their week"
Shawn Layden, former PlayStation US CEO
Sony, a key E3 participant since the beginning, found it increasingly difficult to justify the event amid challenges in maintaining surprise announcements and soaring costs. The extensive resources required for E3 preparations detracted from other productive endeavors.
By not participating in E3, Sony saved considerable time and resources, with Layden reassuring the ESA that Sony would not create a competing event.
Adding to E3's challenges, Microsoft relocated its booth to an adjacent theater it owned, marking another significant departure from the show floor.
"In the early years, allowing Microsoft to do what they did would have been out of the question," remarks Dolaher. "We wouldn't have offered them complimentary space, but would have done everything to keep them on the show floor. They control the theater, so what choice did we have? Letting them relocate, alongside EA's move across town... it was a gradual, agonizing demise."
Matthews, however, has a different take on the situation. According to him, Microsoft was still keen on supporting E3, as entry to the E3 floor also granted access to Microsoft's affair. While companies desired varying aspects from the event, PlayStation being the exception, they all conducted events during the same period.
"It demonstrated the industry's dedication to E3 and the commitment to gather as an industry during that specific time," Matthews comments.
"We didn't have to host our event that week; it could have taken place in the Microsoft Theater at any other time of the year. Yet, we chose that period, marking a commitment to do it differently, an evolution, but still a pledge to join forces and create something larger than ourselves."
The Demise of E3
By 2019, E3 was facing significant challenges. Following that year, the ESA terminated its association with Dolaher to manage the event internally, but the pandemic struck. E3 2020 was called off entirely, and although a digital version was hosted in 2021, it was expensive and wasn't repeated in 2022.
"COVID was the ultimate test," says Layden. "The pandemic halted E3, yet the video games industry increased revenue. Without the largest video game expo, the industry still expanded. If you ask any CFO if they want to spend $10-$15 million on E3 after saving that money for three years, their response would be 'Are you out of your mind? Look at all the savings, and we still grew.'
"The industry is in a far better place now because of E3."
Peter Moore, former Sega, Xbox, and EA executive
The ESA sought a new approach and enlisted ReedPop, known for organizing New York Comic-Con and the PAX gaming shows, to assist. With less than a year to assemble a team, liaise with the industry, and plan an event, it was a tight schedule.
"ReedPop's involvement wasn't just about revival but also evolution," states Guy Blomberg, who was hired to work on the show. "The excitement among almost everyone I spoke to was palpable."
Nevertheless, the team faced a deeply fragmented industry. "Some preferred a consumer-centric show, others focused on B2B," Blomberg notes. "There were those who prioritized digital, while others cherished the fan experience. Some sought a return to the past, while others wanted a complete overhaul. The varied expectations made navigation incredibly challenging, with equal measures of passion and frustration toward the E3 brand."
ReedPop proposed a new format, but reception was mixed, and several interested parties lacked the line-up to warrant an E3 booth. The event scheduled for 2023 never came to fruition, leading to ReedPop's departure from the ESA.
Six months later, E3 was declared dead.
The industry's response on social media was one of sorrow. Winkler described working on E3 as fulfilling a lifelong dream, and for many, attending the event was an aspiration.
"What truly devastates me... we collaborated extensively with Make-A-Wish kids, arranging travel for up to 30 of them," Dolaher recalls. "They received chaperones in the booths, and Microsoft gifted them brand-new consoles. Parents still send letters of thanks. E3 was all those kids ever wanted; no other show matched it."
Matthews reflects: "E3 had a unique charm. The unexpected was a given, making it thrilling, intriguing, and nerve-wracking. The absence of that unpredictability—a quality that distinguished video games from other industries—is the biggest loss for me."
Layden believes there's still a gap for a significant event in the former E3 time frame, but it should cater to fans and avoid Downtown LA.
"I've had approaches from major entities interested in reviving E3," Layden discloses.
"Converting it to a full-scale consumer event is feasible... but Downtown LA is unsuitable due to its scarcity of affordable accommodations. The venue needs relocation, but it should remain within California."
Layden highlights successful international equivalents, such as Gamescom in Europe and the Tokyo Games Show. In the US, PAX East and West exist but are smaller in scale. A major consumer event could thrive with the right leadership and funding."
Winkler notes ongoing activities during the traditional 'E3 week' as evidence of the continued desire for an LA-based physical presence. This week, Xbox, Ubisoft, and IGN are organizing physical events, while the Summer Games Fest's Play Days showcase features entries from EA, PlayStation, Netflix, Amazon, Tencent, Bandai Namco, Capcom, and others. It may not be E3 with its global impact, but it is something.
"Most publishers are participating in Summer Games Fest in some capacity," Winkler remarks. "Though not spending as much, they still value the face-to-face interactions with peers and the community, which is heartening for an events professional like me."
E3's legacy and accomplishments deserve consideration as the industry moves forward.
Reflecting on its inception, the focus was on respect. In 1995, the video game industry was largely overlooked by the media, marginalized by politicians, and dismissed by Hollywood. Today, it has become the dominant entertainment medium globally, enjoying political support through tax incentives, regular coverage in mainstream media, and extensive Hollywood involvement in gaming IP. Decades ago, Sega faced rejection from the Motion Pictures Association, whereas now, Sonic enjoys blockbuster status.
In 1995, the gaming industry sought acknowledgment and respect. By 2024, it has achieved that, with E3 playing a vital role in this transformation.
"E3 was instrumental in establishing relevance and receiving respect," Moore concludes. "There was a time when gaming was seen as trivial, held responsible for societal issues, and considered a phase young boys outgrew. That narrative has changed.
"Thanks to E3, the industry is in a significantly better position today."
