Game industry will hide its pain, celebrate innovation at E3

An estimated 45,000 people are going to attend industry trade show Electronic Entertainment Expo (E3) this week at the Los Angeles Convention Center in downtown L.A., Calif.

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That’s the same number as last year, and at first glance, it might seem like nothing has changed with the show or the industry. But some game companies are in a bad state as the industry shifts under their feet. They’re trying to adapt, and so is the show. The good thing is that E3 remains the biggest place to see the new entertainment coming for gamers in the next year.

More than 200 companies will exhibit their wares across 370,000 square feet of exhibit space, according to Rich Taylor, senior vice president of communications at the Entertainment Software Association, the trade industry group for game publishers. Thousands of games will be on display.

“As a gamer, I’ll be so excited to see what’s coming myself,” he said. “The show continues to evolve and reflect the industry. There are broader market games with mobile and social companies coming. We’re seeing platforms for families to play games everywhere.”

The theme of the show is “innovation unveiled.” E3 will portray an industry in flux, with old stalwarts like THQ dropping from the show floor. But Japan’s Gree has taken up a big booth to show off mobile games as it launches its mobile social gaming network in the U.S.

Video game sales crashed 42 percent in April compared to a year before, according to NPD game stats. But those numbers don’t include “digital” sales, or those sold via online distribution or games played on mobile devices or social networks. If you look at that broader market, the industry is healthy, Taylor said.

Taylor notes that a big hit can generate much more revenue today than in the past. In 2006, the top seller, Electronic Arts’ Madden NFL 2007, sold more than 1.8 million units in its first week on sale. But Diablo III, launched last month by Blizzard Entertainment after a nine-year development cycle, sold more than 6.3 million units in the first week. He also noted that digital revenues for EA exceeded $1 billion in 2011.

The attendees include media, retailers, and game company executives. The attendance number is just about the same as the numbers for the past two years, Taylor said. The ESA still restricts the size of the show so that it retains its value to the movers and shakers in the industry. And the show remains closed to the general public.

Big game company press conferences will kick off with Microsoft on Monday morning, Sony on Monday evening, and Nintendo on Tuesday morning. Then the actual exhibition will run from Tuesday through Thursday.

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As for the trends of the show, Taylor said, “Your guess is as good as mine. But we’ll see all the entertainment that people will enjoy for the next year. There are titles I’m exciting about and some surprises, too.”