DISCLAIMER: those are my thoughts, based on my research, my experience as a member of the gaming industry, and my views as a consumer. I don’t pretend to know it all.
The title is pretty straight-forward and serves also as a TL;DR.
Before diving into PlayStation’s decision and what I think of it. Let us first talk about the Electronic Software Association (ESA).
“[The] ESA offers a wide range of services to interactive entertainment software publishers, including conducting business and consumer research; providing legal and policy analysis and advocacy on First Amendment, intellectual property, and technology/e-commerce issues; managing a global content protection program; owning and operating E3; and representing video game industry interests in federal and state government relations”.
Important: They are also the ones behind ESRB, a games rating board in North America, similar to PEGI in the UK or CERO, Japan’s rating board.
This is how the ESA describes E3:
“E3 is the world’s premier trade show for computer and video games and related products. The show is owned by ESA, the US association dedicated to serving the business and public affairs needs of the companies publishing interactive games for video game consoles, handheld devices, personal computers, and the internet.”
The ESA and E3 are both industry staples, there is no doubt about that, and for good reason:: they earned their spot. As consumers and fans, we have this desire to see all the glitter, all the announcements, to connect to one another, and celebrate like other industries do. E3 is the answer to that desire. Everything is shiny, publishers try to one-up each other through announcements, conferences, booths and in a more general way: with the experience (read: spent millions) they offer to the attendees. Aside from that, you need to have a trade organization to streamline everything and ensure that as an industry you can thrive. But at what cost…?
With almost 7 million USD spent in 2017 for lobbying, which is more than the NRA for instance, the ESA doesn’t hesitate to flex its muscles to ensure that its political and commercial needs are taken into account. While the ESA is mostly focused on the US, their decisions still have a global impact, because the industry and the world is more globalized than ever.
Among the numerous topics the ESA have tackled the past few years, we have the gaming industry’s sweetheart: loot boxes/microtransactions (commonly abbreviated as MTX). As you can imagine, they don’t want governments to meddle with that. Instead, they prefer a self-regulated approach adding a mention on the box/description of products mentioning in-app purchases. However, this move doesn’t solve the actual issue: predatory in-app/MTX. It’s like putting a patch and blowing a kiss on a severed limb. Now hear me out: I don’t want governments to meddle with that either, I just hope for a better (self-) regulation. While I understand their point of view, and how vital microtransactions & digital content are for a company to generate profits and create new games, it is pretty dangerous to let this run out of control (Hi Battlefront 2).
This year saw its fair share of outrages and (not-so) shocking revelations regarding the gaming industry: sexual harassment, discrimination, horrible working conditions, abusive and power-hungry managers etc. We have plenty of examples: Riot Games, ArenaNet scandal, Naughty Dog’s allegations last year, Telltale’s story, Red Dead Redemption 2’s 100h weeks and many others. Of course, the ESA has to be aware of this as the leader of the industry, right? Well… four months ago, during an interview with Waypoint, Mike Gallagher (CEO of the ESA who stepped down since then) said (emphasis by me):
Waypoint: “I was wondering if you could comment on the current conversation around unionization and labor organizing practices, and if the ESA had any comment at all about, for example Game Workers Unite, and some of those conversations that are starting up.”
Gallagher: “So, this is fortunately an issue we haven’t had to deal with much in my time as the leader of the ESA, and I think there’s a reason for that. The wages in the video game industry are very high. The barriers to exit for employees are very low, and the opportunities to create within the industry are abundant. [There are] multiple platforms, multiple publishers, multiple companies, spread out all around the country.
The market is global, so that provides a lot of opportunities for individuals to be fully empowered. And you see those choices being made every day. We have a map called “Are we in your state?” and it is a map of what we count, as all of the video game companies, as well as locations. The number of locations is something around 3,000 around the country. So the industry has been democratized. The tools to make games have been democratized. The returns and the revenue have never been higher.
When you put all of those elements together, it’s created great opportunity for individual laborers, or the game makers, at whatever level, to make choices that empower themselves.So I think that’s why we’ve had less… it hasn’t been a significant issue in the game industry for the last ten years.”
There is a massive discrepancy between what ESA’s CEO is saying here, and the reality of things. Journalists such as Kotaku’s Jason Schreier have been writing about the conditions in gaming companies for years now, hell, he even wrote a book about it! Not all the domains allow you to get competitive salaries: for instance, PR pays approximately 30% less in gaming than other industries (and I’m not even speaking about the salaries Silicon Valley tech firms are offering). Due to the nature of the industry, it’s mostly about passion, it is very easy for the companies to get the best of their employees and package that as “hey, you get to work on games that millions of players dream about“. Yeah sure, that’s cool, but that doesn’t pay rent, nor does it pay the doctor bills due to stress/back pain etc. Even worse: if you don’t want to do that job, someone else will probably do it for cheaper because… passion (and bills, someone obviously has it worse than you).
As you can imagine, one of the solutions for this could be better labour laws, but we’re speaking about the US (sorry friends…), or unions. The US has been the theatre of some of the most violent strikes over the centuries, and have a long history of battles between companies and unions (some are extremely famous, such as the Homestead strikes), meaning that everytime a company hears the word “union”, they aren’t exactly happy. However, as discussed in this article by Waypoint, companies/workers are discussing the possibility of unionizing. As you can also imagine, the ESA isn’t keen on any of the solutions above, because it might dilute their power and control.
Not everything the ESA does is bad, however, I must admit that they also did some good things, too. Namely: E3.
Since I was a kid, reading imported gaming magazines in Morocco I wanted to attend E3. Luckily enough, my weird life path led me to work at BANDAI NAMCO Entertainment and I attended the event several times. Going there as a member of the industry made me extremely proud, because when you work on events and meet the press, influencers, and fans: you can see the impact your work has on someone (Of course, we’re not doing open-heart surgeries, but to each his illusion :)).
However, I also got to see the less shiny side of E3: its ridiculous costs. Without going too much into details, because those are companies’ budgets that I’m not supposed to talk about. But it is absolutely ridiculous to have to spend millions to be on the show floor or have a decent space on the upper floor. Everything about E3 costs got out of control:
- Hotels
- Food on-site
- Available floor space
- Agencies
To put things in perspective, this preview event I organized for DARK SOULS III (2 days, more than 150 journalists and influencers, 50 gaming stations) costed 1/4th of what a publisher would pay for a handful of meeting rooms at E3.
While the costs have been rising steadily over the past few years, some questions need to be asked:
- Is it worth it to spend millions when you can talk to your consumers and fans directly and regularly, at a much cheaper price?
- From a communication standpoint, is it worth it to have all your big announcements at the same time as everyone else? The answer is no.
- From a development standpoint, do you want to keep rushing your teams to have a build ready for E3?
For years, E3 has been the “grand messe” of gaming, with everybody preparing for it during months. It allowed us to have some of the best conferences ever:
But we need to question its existence, especially when one of the very few changes they brought to the table was… opening it to the public while keeping the same size.
As everybody knows, Nintendo decided to stop the conferences years ago, and shifted towards a “Tree House”, and Directs all over the year. At first, consumers and press were a bit taken aback by it… But nowadays, everybody looks forward to these pieces of digital content, and to attend smaller events to try the games. Of course, not everybody has the same brand awareness as Nintendo, but it is worth trying to build a digital content strategy like they did. Microsoft is doing it with their different digital events, and it’s starting to bear fruit as fans are more engaged than ever. While it’s cool to blow everybody’s minds with crazy booths and wild parties, we need to think further than that and think long term.
Now, does it make me sad to not have a PlayStation conference? Yes, it does. I was there when they announced FFVII Remake, when they announced Horizon Zero Dawn and it was just awesome to see the room shake and everybody lose their minds. But from a strategy standpoint, it does make sense for them to move away: the budget can be shifted towards other more fruitful endeavors, they can decide their own timing, and they can get with the times. We are in 2018, and E3 in its current form is a relic of the past.
As you can imagine, the ESA had to prepare a press release to counter PlayStation’s announcement, and as you can imagine, it is straight up boasting about numbers and having quotes from… PlayStation’s rivals.
To add to this already long post, Game Informer’s Imran Khan wrote an excellent piece on the topic, with the only statement Sony has given to press:
“As the industry evolves, Sony Interactive Entertainment continues to look for inventive opportunities to engage the community. PlayStation fans mean the world to us and we always want to innovate, think differently and experiment with new ways to delight gamers. As a result, we have decided not to participate in E3 in 2019. We are exploring new and familiar ways to engage our community in 2019 and can’t wait to share our plans with you.”
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To conclude this article, I want to reiterate that E3 has to change. Otherwise, others will follow suit. Opening to the public is the first step, but they need to:
- Revise costs
- Find better locations (yo, it’s scorching hot and packed in LACC during June)
- Livestream their events under another form
- Have smaller ones across the US, Europe, and why not Japan
I have loved E3, and will keep loving most events pertaining to the gaming industry, but we have to celebrate it all year long, not only in June, at crazy costs.
Thanks for reading and thanks a lot to Steve for helping me out!
Rachid
Rachid's notes. 