E3 canceled as game industry capitulates to coronavirus

The Entertainment Software Association announced it is canceling the Electronic Entertainment Expo, the big game trade that takes place in June in Los Angeles.

For its 25th anniversary, the show was clobbered by the coronavirus. But it also had some other problems, as major vendors such as Sony, Electronic Arts, Blizzard, and others had already said they weren’t attending. As early as Tuesday, a number of sources said the cancellation was coming, but the ESA announced the news on Wednesday morning.

E3 draws more than 65,000 people to the Los Angeles Convention Center and the surrounding area each year. 50,000 of those attendees are industry professionals, and 15,000 are fans. The ESA said it was discussing with members to do an online event in June.

Devolver Digital started the latest concerns on Tuesday evening about E3’s fate with a tweet.

Observers were expecting the ESA to close the show in an acknowledgment of the severity of the coronavirus, which has infected more than 119,000 people and killed 4,290. But it’s a sad day for the games business, as many companies, already reeling from the cancellation of the Game Developers Conference (originally scheduled for next week) in San Francisco and SXSW in Austin during March, Texas, were counting on E3 for doing business.

Nintendo had pledged that it would go to E3, and Microsoft was planning to reveal more details of its Xbox Series X console. With all of the major game events getting wiped out in the U.S., the next domino in the offing is Gamescom, the big trade show that draws 300,000 people to Cologne, Germany in August.

But events across the world are being canceled now, from college classes to the Coachella Music and Arts Festival. Because the coronavirus can be transferred to another human from someone who has no symptoms, fear of the virus is wreaking havoc with large gatherings of all kinds. The elderly are particularly vulnerable to the virus, but young people who go to events can be carriers for the virus.

Government officials are urging people to isolate themselves, and companies like Microsoft and Google are asking their employees to work from home. Anything that involves possible physical contact, from air travel to Boston’s St. Patrick’s Day Parade to game conferences, is getting hit. The stock market and oil prices are also getting hammered as investors fear the economic fallout.

In a statement, a spokesperson for Ubisoft said, “The health and well-being of our teams, players and partners is our top priority, so while we’re disappointed, we fully support the ESA’s decision to cancel E3 2020. E3 is and will continue to be a moment where we come together as a community and share our love of games. We’re exploring other options for a digital experience that will allow us to share all the exciting news we have planned.”

And Phil Spencer, head of Xbox at Microsoft, issued a tweet about doing an online event.

Since the pandemic began in the U.S., more than 1000 cases have been reported and 30 people have died. No event wants to be responsible for adding to that by giving germs a chance to do their thing. The silver lining for E3 is that the show organizers will get a chance to think about how to evolve the show for changing times.

Mike Gallagher, former CEO of the ESA, said in an interview he could not comment on whether the ESA was canceling the show.

On the decision to cancel E3, he said, “The pressure on E3 as a global event is clear and overwhelming.  Since COVID-19 caused the cancellation of GDC, major sporting events, concerts, and tournaments have all been delayed or canceled.  Based on what is known, unknown, and the decisions of other credible actors,  not having the show in June is the painful and responsible course of action.  The weight of the guidance of lawyers, insurers and those focused on health and human safety is greater than those focused on brand, marketing, and tradition.”

On the issue of what’s next for E3, Gallagher said,  “The question for the industry now is much the same as when I started in 2007 and E3 was ‘Barker Hangar.’  What’s next? Back then it took the board and the ESA team over a year to come up with a better, stronger, more balanced event – and that foundation drove a decade of E3 holding the world stage. What is that path forward for a stronger E3 in 2021?”

And Gallagher said about the impact of the potential loss of in-person marketing for 2020:  “In a year where the industry will lose many if not all mass in-person events to drive marketing, it will be a test of the industry’s evolved business models: digital, social, and interactive. The pressure will be on evolving the robust direct connections the industry has with gamers through their own platforms and others such as Twitch and YouTube, amplified by social media, to deliver the excitement that drives topline growth.”

Update, 9 a.m. Pacific with reaction from Microsoft and Ubisoft.

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