Wedbush Morgan Analyst Michael Pachter thinks that E3 is "heading for extinction soon". That is, if the guys at the Entertainment Software Association (ESA) don't change the format of the event soon.

This observation was based on the number of video game company executives who weren't very impressed with the way E3 was handled, with some even considering not attending any future events if it goes on this way.

To give you an example, Electronic Arts CEO John Riccitiello said that "I hate E3 like this." He further added, "Either we need to go back to the old E3, or we'll have to have our own private events."

Ubisoft's American President Laurent Detoc shared the same sentiment regarding the event saying that, "E3 this year is terrible. The world used to come to E3. Now it's like a pipe-fitters show in the basement."

Pachter pointed out that E3's success in the past was due to the fact that it was able to address the needs of the core constituents of the industry, namely, media, retail, investors, and consumers. Something that the ESA didn't do since the changes made last year:

By choosing to eliminate any potential for a consumer element to the show, the ESA chased away much of the television media. By scheduling the show two months later than in the past, retailers stayed away. By scheduling the show during the calendar quarter financial quiet period, only limited access was provided for buy and sell side analysts.

He further added that while the ESA sees the problems, the organization is "hamstrung by some of its more influential members, who appear to be pettily reluctant to spend money in order to showcase the industry."

So what can the ESA do to return E3 to its former glory? Well, for one thing, Pachter noted that going back to the traditional 60,000 attendees may be a bit too unmanageable while the new 3,000 to 5,000 person shows are a "terrible disappointment." So, the target number should be somewhere in the middle. As for the added cost of running an event this huge, here's a pretty good justification:

We believe that the lower costs for the show were more than offset by the loss of millions of dollars of free publicity, and are hopeful that the ESA restores the audience to a manageable, but spectacular size.

We can't help but think back at the people who said that they wanted E3 to be a more intimate event. Well, now you've got an intimate event, and guess what? A lot of people think it sucks.

---

Related Articles:

• Pachter: E3 is virtually useless for retail and investors
• Ubisoft: time and place for E3 not appropriate, needs to be bigger