David Bloom is a Deadline contributor.
It’s a huge question for the Electronic Entertainment Expo, which opens Tuesday after the Big Three makers of game consoles – Microsoft, Sony and Nintendo – each do their annual pre-show media extravaganzas by turns beginning Monday morning. Disney will unveil games tonight based on its movies The Lone Ranger and Monsters University, though it’s possible they may also talk about games based on their Marvel and Star Wars movie franchises, especially after recently laying off many of LucasArts game designers. Other big game publishers will also unveil titles in pre-show events Monday afternoon.
All the hoopla comprises something of a return to the game industry’s heyday, say 10 years ago, when the expo was a noisy, massive, overwhelming beast that consumed the Los Angeles Convention Center for a week. It attracted tens of thousands of media and industry insiders, who faced something of a death march through game company “booths” costing millions of dollars, with dozens of often outlandishly attired staffers, followed by evening parties for 10,000 people featuring performers such as Beck and India.Arie.
Then, a few years after the Microsoft Xbox 360, Nintendo Wii and Sony PlayStation 3 consoles were released in the early 2000s, technology shifts and a bad global economy turned the business upside down. One year, the expo even tried to save money by limiting booth sizes and audiences for a small event held in a Santa Monica hangar.
Related: Next-Gen Xbox One Unveiled With Content Including Spielberg-Produced ‘Halo’ Series
The resulting marketing debacle sent the industry scuttling back to the convention center and a bigger physical and mental footprint. Nonetheless, many now question whether there’s even a reason to buy an expensive next-gen game console, especially when you have to spend another $60 for a game. Instead, millions of players these days prefer to spend 99 cents for a quick-hit title they can play on their smart phone or tablet. Or they’re diving into a “free-to-play” game, perhaps on their Web browser, that makes its money with premium add-ons.
The ground has shifted dramatically since the last time Sony, Microsoft and Nintendo released a new game console. And now, those new devices are finally here, or almost here, and desperately need the boost of a big, splashy E3 to get consumers to care again. Both Microsoft and Sony have partially unveiled successors to their consoles the past few months, but still have plenty to reveal, including key details such as launch date and price.
In Microsoft’s case, the new console’s name advertises its ambition – to be the only box you need attached to your TV to bring all kinds of entertainment, information and more to your living room. The Xbox One unveiling a few weeks ago focused heavily on Microsoft’s many entertainment initiatives under former CBS honcho Nancy Tellem, including a Steven Spielberg-produced Halo TV show. Just last week, Tellem and Microsoft CEO Steve Ballmer were in LA meeting with Hollywood heavyweights in film, TV and music to talk up the box’s entertainment potential. For an E3 audience, however, the company likely will mute that talk and focus more on the games themselves.
Sony’s initial PS4 launch event in February didn’t spend much time on consumers or entertainment – the company was trying to make nice with game developers still grumpy about the PS3’s high initial price and difficult programming interface. But the company has for years pushed its game consoles as do-it-all devices that play DVDs and CDs, stream the Internet, stream or download games, movies and music and more. With Sony’s movie studio, significant TV operations and major record label, such a focus is hardly a surprise. Expect much more of that Monday, even as Sony talks up exclusive, stunningly movie-like games such as the post-epidemic The Last of Us and Beyond: Two Souls, which features not only the voice but the likeness of Ellen Page and Willem Dafoe.
The new devices also raise the stakes for Nintendo, the industry pioneer that launched its own next-gen console, the Wii U, to substantial consumer indifference last year. Nintendo received another blow when Electronic Arts, the No. 2 game publisher, said it isn’t developing any more games for the Wii U. Nintendo is struggling to remain viable, and needs to demonstrate why anyone would want its machine, given all the competition.
For that matter, all three companies can no longer depend on the business model that sustained the game industry for its first 30 years. All three must persuade millions of consumers why they need a game machine when so many other options are out there. More and more people are playing games, but they are playing the games in browsers online, on smart phones and tablets and through Facebook or other social-media sites.
Even here, the business is built on treacherously shifting sands. Zynga, the publicly traded company whose hit Facebook social games fueled its early success, announced last week that it was laying off 18 percent of its workforce and focusing on games for smartphones and tablets. The great irony of E3 in 2013 is that the game business has never been bigger, but the companies that have sustained it for most of its existence have never been more challenged, or need more for E3 to be a big success.