Industry Reaction on the Downsized E3
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Like most things, it's probably good for the big boys and probably bad for the little guys. If you've got a bunch of games to show, you can host a giant event, fly in journalists, give them good food, have the Spice Girls reunite, etc., and spread all those costs across all those big games. If you're a small publisher with just a couple of titles, well, then you're kind of hosed.
I'm just surprised this didn't happen sooner. Some of the biggest games at E3 had very low-key presentations. We were fortunate enough this year to have a great response to BioShock, and we were just showing it off in a tiny little room on a medium-sized television. I'm sure that didn't make some of the big guys spending zillions of dollars on the same show floor very happy. I'm sure there are big players wondering, "Why bother? We'll just do our own thing where there's no competition."
I think the biggest loser is the "universal awareness of the games biz" in the sense that there's no longer a single event for the mainstream press to wrap their head around. It was sort of like an annual holiday where the "Live at Five" anchor-bots talked about the game industry for five minutes. I always thought that was good for a laugh.