The game industry is bigger than ever, with estimates of revenues as high as $150 billion worldwide. And it will draw billions of views this week at the annual Electronic Entertainment Expo (E3) in Los Angeles. But as it moves from subculture to mass culture with more than 2 billion gamers, it still has growing pains.
Mike Gallagher is the CEO of the Entertainment Software Association (ESA), which puts on E3. He’s also the industry’s chief lobbyist, and he has to address those pains. These include complaints from parents and politicians about video game violence, which flare up with every mass shooting. He must also address attempts to regulate games, such as recent moves to classify the sale of loot boxes (or random awards of virtual goods) as gambling.
I interviewed Gallagher with a small group of journalists this week at E3. We talked about issues such as unionization, crunch time, the creation of game jobs, the difference between journalism and influencers, and the culture-changing popularity of games such as Fortnite.
Here’s an edited transcript of our group interview.
Mike Gallagher: Investment, innovation, and impact. When it comes to investment, the industry is absolutely at a fantastic point. It has to be the peak in history, how much investment is going on around the world. That investment drove, last year, $36 billion last year in revenue in the U.S., $116 billion worldwide. That’s project to grow 10-12 percent next January when the numbers come out. All the trend lines are extraordinarily positive.
That investment is in great content, great games, and great experiences. When you look at the games Microsoft and Bethesda showed, that Sony and Ubi will show, and those that follow, they’re fantastic for gamers and for consumers. That’s happening across multiple platforms. We have the consoles, which are all three in terrific shape. The ecosystems around those have never been better, with whole game digital downloads taking an increasing piece of the market for consoles, as well as microtransactions and other things that were traditionally only available on mobile or PC. Now consoles are taking advantage of those for console gamers. That leads to an enormously healthy ecosystem for all three of them.
Two years ago that wasn’t true. We had two consoles, and we had questions about the third, the health of that. Now those questions are answered. We have a phenomenal base for the gamer to have terrific choices.
Then you look at PC and mobile. Those continue to grow and expand, especially mobile, around the world. Mary Meeker, a year ago, in her deck that covers the future of the internet, had 70 slides on our industry. She pointed then and said there were 2.6 billion gamers in the world. That’s a great number. There are still 5 billion more to go. There’s a lot of growth to be had for us. There’s also a growth in engagement levels that we can continue to take and share from other forms of entertainment. Consumers today increasingly want interactive entertainment, what you see here at E3.
On the investment side things are very strong. When you look at innovation, we continue to see new technologies, more tools in the hands of developers, more ways of creating experiences. It’s not just about the tech itself. It’s about the experience it creates. You see that over and over again, when you have a piece of technology like 3D TV, that there’s a lot of excitement and around it, but it doesn’t seem to go anywhere, because experience wasn’t top of mind when it was created. It’s a cul-de-sac.
In our industry we see that mobile has been a fantastic growth point. You look at the Elder Scrolls game that was announced last night at Bethesda. It’s beautiful. I can’t wait to go play it. It looks phenomenal. That’s leveraging the device and the continued innovation that happens on mobile. The tool kits in the hands of developers yield remarkable experiences.
Then you have VR and AR, which we’ll have on full display here at E3. Again, focused on the quality of the experience. Not just on, “Here’s a piece of hardware.” Here’s Skyrim, all of it in VR. Those types of things that are going to be innovative and break through, they happen here at E3.
Another one is 5G wireless. AT&T has a booth here where they’ll demo gaming over 5G. That makes a lot of sense for them. If you look at the audience that pays attention to E3 — the billions of media impressions, the tens of millions of viewers watching – these are customers that any wireless carrier would want to have. If you can demonstrate that you’re a gamer network, that’s very powerful. Their new technology, which is just beginning to be deployed—to have it shown here at E3 in a gaming space, it’s a tribute to the industry. It reflects the fact that 90 percent of the revenue in the Google Play store is games, and 75 percent in the iOS store. What’s driving the mobile revolution is very much the investment from gamers in playing great games.
We look at impact. The impact of the industry is cultural. It’s transcendent. It’s so powerful. When you look at what we’re able to have in the relevance with our audience—a couple of examples of that, these are well-known to you. One of them is the growth of esports. Another we’ll talk about is Fortnite. When you look at the power of these things, when they’re able to captivate the hearts and minds of people around the world, and the other leaders around culture that are imitating what’s going on in a game, like with Fortnite, it’s remarkable.
When we look at the impact of esports, here at E3 we’ll have at least three places where you’re going to see great esports. Nintendo has a fantastic tournament with Smash Bros. We all know how fun that is. We’ve all played various iterations. We could all debate which one is the best. Then you have ESL with our activation where multiple exhibitors will have an opportunity to have esports played. Finally, we have Fortnite Pro-Am, which should be really fun. The scale of that should get some attention. On the cultural part, when you have soccer players in Europe and baseball players here in the U.S. mimicking the Fortnite dance, it just shows an incredible connection with culture, and our ability to be what it’s important to so many people in what they do with their spare time.
A little bit about the show. We continue to have to follow all of those verticals. We’ve invested more in the show and broadened the footprint. It’s everything from the Coliseum to Microsoft Theater to other activations you’ll see in between, plus the show floor. We’ve always had the press briefings, as an extension of the excitement of E3. Now, I’ve heard several compliments about the kind of SXSW-style deployment this year. We’ll continue to monitor that and see how that goes. It takes pressure off the floor because we added consumers.
That’s another investment we made last year as ESA. We did that last year and we learned a lot. This year, we’ll see the product of those learnings, like extending show hours, having special access for media and for exhibitors, and then also having not just access but time. Both of those are targeted, because there’s a need for that.
This year we had advanced security. All of you have had the ability to hear why we’re doing that. It’s the right step to take in this world environment, on advice of the security professionals here in Los Angeles, the police department and others. We’ll have those features. We’ve invested an enormous amount to have that go as smoothly as possible. We also expect that there will be challenges, but we’ll work as hard as we can to answer those quickly and effectively so there’s a great show, and also a safe show, for everyone who attends.
Question: It’s a lot of metal detectors.
Gallagher: We soaked up all they had in Los Angeles, as many we could get our hands on. We’ll be very focused on that throughout the week.
When it comes to impact, you’re all aware of the social media, traditional media that attend the show. We have more than 3,000 members of the media. Half of them are international. Last year’s show did more than 90 billion media impressions, a staggering number. Only 3 billion people in the world have internet access. There’s a lot of people coming back more than once. All week long, people are coming back and checking out their favorite game makers, and our own assets where we collect all that and put it out through E3 Insider. It’s a phenomenon.
I’ll give you an example of that. Last night they held the Tony Awards, a multi-hour special on a major network. We measured everything that was sent and received on all forms of media last night by the Tonys. Again, that’s over broadcast TV. Our two publishers that had press briefings last night had more than 10 times the impact and reach of the Tony Awards. Now, they’re big voices. We’re very proud to have them and they get us off to a great start when it comes to show. But more than 10 times the impact of the Tonys between the two of them.
We still have more to come. We’re just getting started. To think about the cumulative total of that during the week, and the numbers we’ll put out over impacts on Instagram, Facebook, Twitter, and Twitch, every year we break records with those. We’ve set that pattern. We couldn’t be happier to be working with all of them. Gamers have a voracious appetite for what’s coming here. There’s a lot to see.
Question: Something we’ve all been writing about a lot, every time there’s a school shooting video games come up. There have been all these meetings. Can you update us on that? Are video games still the whipping boy?
Gallagher: One thing I think that’s sunk in, to a great degree, is the truth: video game violence has no connection to real world violence. More and more authorities accept that. If you look at the major media, this last cycle of this, say this year—major publications, top of the headlines, say that video games have nothing to do with these shootings, in Parkland or Sante Fe or Vegas or Orlando or anywhere else. If you recall, five years ago was the opposite of that. The media was feeding the notion that there was this connection. Now the media has rejected that connection. I think that’s very powerful.
We continue to have episodes where we have to intersect with public officials on the state and federal level, and also outside groups, experts or critics, on the subject of the alleged connection between video game violence and real world violence. We’ve seen from experts, from the Surgeon General, from the U.S. Supreme Court, and from your own experience that there is no connection. When we go in with the assets, with the research that’s been done, with the analysis that’s been done internationally—these games are sold around the world. There are 2.6 billion gamers. Yet this crisis of gun violence and mass shootings is uniquely American. If these games are played everywhere, we should see these outbreaks in all these other countries, especially ones like Canada. We don’t. It’s got to be something else. That’s a very powerful point, and that’s had impact.
We continue to engage on that issue. I would say, 10 or 11 years ago, when I started, that was more than half the job for me, going around and making that case. Now it’s an infrequent part of it. It’s important when we do it, and I believe we have a great team and great industry leaders making the point very well. That’s why you’re not hearing as much about it. We’re very good at making this argument and having the facts be clear, and then moving through it to get to the truth of the industry.
Question: To encapsulate, then, aside from whatever politics smokescreen stuff might be happening on the front-facing side when it’s convenient, when you’re engaging with policy makers, they’re getting it. They’re not going down that path.
Gallagher: We have an ever-growing number of policy makers that reject the notion outright. They don’t entertain it. We have a number of champions of the industry that point to us and say, “This is a great industry. There is no connection to this crisis of gun violence.” Then I would say that the industry has never been more capable and effective at making the truth known about what we are, about the creative energy of game makers, and the lack of any connection to real world violence.
Question: Did President Trump ever come back with any sort of invitation to you, after that meeting you guys had in the White House? Did any formal feedback come back about whether they were going to do something or not do something?
Gallagher: I’ll give you two levels of analysis on that. There was a media feedback and it was public. The three members of Congress who were in the room – Marco Rubio and two other Republican Congressmen – each put out statements. Senator Rubio, after that meeting, said it’s clear that video games don’t have a connection to real world violence. The points were effective on more than just the President. The two other Congressmen also put out statements, and those pointed to other factors and the need for this dialogue to be focused in other areas. There was, in real time, a reaction to it.
Then the President put out a response. We had one as well, and since then that’s covered the subject. Now, he also pointed to the so-called School Safety Commission that Secretary DeVos is chairing. There are, whatever, 24 items that commission is supposed to look at. One of them is the impact of media – that’s all media, not just video games – on youth, and specifically on rating systems, the impact of rating systems on the consumption of media by youth. We’re engaged with that commission as they have questions they’d like us to answer. We’ll of course participate and provide the information that we already provided the President. That’s the current status as to follow-up from the meeting.
Question: Were you content with your response to the situation? Is this something you want to be more aggressive on next time in terms of putting your own people in front of the press, on social media, on TV?
Gallagher: I’d say we’re never content. We’re always vigilant. Our approach—you have to ask yourself, from where we sit, what does success look like for that engagement? Often confrontation is very helpful to your industry, the media, and cannot be helpful to ours. We need to educate. We have a lot of other things we need to focus on when it comes to growing the industry and the increasingly global connectivity we have.
When you look at the ecosystem of the video game industry, 95 percent of the world’s customers are outside the United States. Outside the U.S. this issue doesn’t come to the forefront. We need to have the bandwidth to deal with other things, and then also continue to extend and protect the frontiers of interactive entertainment around the world by working with our other colleagues. This issue is not one where, if we just keep talking about it, it’s serving the industry well. Especially when it’s proven that there is no connection between the atrocities happening in our country and the entertainment our artists make.
When you answer the question that way—if I look at the response, I believe we’ve done an excellent job as an industry in responding, and the industry is bigger than just ESA. You see that in the responses, from the source of the responses, to the last go-round. You have plenty of speakers. You have academics. You have IGDA. You have us. You have individual member companies. You have gamers. All of these voices are being heard by those that ultimately are sitting in judgement, the media and policy makers. You can see that tide has turned fairly dramatically in favor of the artist and the game maker.
Question: What about when something like Active Shooter pops up on Steam? How detrimental is that to this conversation?
Gallagher: Let’s put it this way. Active Shooter is not the industry. I’ve never met these people. I don’t know them. The game’s not actually been released. I don’t have any personal knowledge of this. But it’s not something I would play. It’s not something I think many people in this country would waste their time on. Valve runs a platform. They’re a fantastically successful, very well-respected platform for the industry. They’re a great Northwest success story. I visited them to talk through this issue. Their response is very thoughtful. It’s one that they’re being very careful about. There’s more to come. That’s another thing they indicated in our conversation.
I think it’s best if we continue to let that unfold. They are absolutely motivated to do the right thing for their gamers and for their developers. We share the same motivation in our capacity as ESA. Active Shooter isn’t in the best interest of any of that.
Question: It sounds like, despite the evidence you present, that the issue isn’t necessarily one of facts. When you have this coming up over and over again, and Active Shooter is a good example of that—it’s obviously not representative of the industry, but it keeps coming up. One of the prime motivators behind that is the NRA, I think. Oliver North, despite the fact that he was in a game, or contributed to one, recently brought up video games again. What are you doing in terms of the NRA? Not the politicians, but maybe the people behind them.
Gallagher: We have a common—I won’t use the word “target.” But we have a common objective in the sense that it’s getting to the hearts and minds of policy makers with the truth. Ours is proving to be more compelling because there are fewer of those that take on the lie that is peddled, that there’s a connection between video game violence and real world violence.
Instead they have incentives to attract our industry to their states. We have 22 states that have incentives that say, “Bring your industry jobs here.” Several of those states are in the south. They’re seeing that the average wage in the industry is $100,000 a year. They’d like to have those jobs in their states. They see the industry for its truth. These other aspects are tired stereotypes that are finding less and less traction, wherever they’re coming from.
We know the NRA makes those arguments. We also know that they’re going to bear the burden of history. We will continue to be successful with policy makers as the industry continues to grow. We have a great capacity to tell the story and there’s a great receptivity from policy makers around the country. Just to keep the numbers in mind here, there are more than 7,000 state legislators in the country. You have 50 governors and attorneys general, plus federal legislators. You have to look at the whole. That’s what we’re focused on domestically.
We see continued acceptance. With things like the E-Tech Caucus, the video game caucus in Washington D.C., it’s the biggest caucus in Congress that doesn’t represent a disease or a country. It’s maybe 17th. There’s the cancer caucus or the diabetes caucus or the Italian caucus. Behind all those, the next one in size is the video game caucus. This is the type of environment we see and embrace and speak to. Our message is one of truth and optimism and hope. The others can say what they want to say. That’s going to remain our central point and our message.
Question: Three-thousand media professionals are here. I wonder if you include influencers in there. What would the distinction be these days? I would guess that a much larger part of those impressions now are coming through social media influencers. What do you notice about what’s different when it’s not all professional media driving this?
Gallagher: We do include influencers in that 3,000 figure. We’re one of the few shows that will badge Twitch and YouTube streamers as media. We see that as a very important part of the ecosystem. A lot of other shows will badge them as fans or as industry. As far as how we determine that, we look at number of followers, number of viewers they get, how often they publish.
Here’s how we look at this. If you look at the purpose of the show, it’s to connect the world with the industry. We can do that through all channels, not just through certain specific ones. When you look at the avenues, it’s our role as an industry to connect with everyone. We’ve seen gamers—they’re the ones with the voracious appetite. They’ll listen to you, but they also want to have a direct connection to publishers and game makers. E3 provides that in a major way, all at once. They know to tune in, around the world. So yes, we embrace all of those forms of media, because they’re relevant in connecting with the audience and those that impact the audience.
Question: How many attendees do you have this year?
Gallagher: It’s right around 60,000. We have 15,000 consumers, and then 45,000 industry. It’s capped. We’ve had to expand the show hours to try to relieve pressure and expand the footprint. We added a day to the Coliseum so there are more places for everyone to go than just the show floor. We’re trying to relieve the congestion there.
Question: Are outside fan events counted in that? Like when EA Play was running, that’s not part of that?
Gallagher: Correct, generally. But Microsoft is absolutely part of that.
Question: Can you comment on the current conversation around unionization and labor organizing practices? Does the ESA have any comment about, for example, Game Makers Unite and some of the conversations that are starting now?
Gallagher: This is fortunately an issue that we haven’t had to deal with much in my time as the leader of ESA. 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. The opportunities to create within the industry are abundant – multiple platforms, multiple publishers, multiple companies spread all around the company. The market is global. That provides a lot of opportunities for individuals to be fully empowered.
You see those choices being made every day. We have a map at areweinyourstate.org. It’s a map of what we count as all of the video game companies, as well as locations. The number of locations is somewhere around 3,000, around the country. 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, for game makers at whatever level, to make choices that empower themselves. I think that’s why we’ve had less—it hasn’t been a significant issue for the industry in the last 10 years.
We are, of course, paying attention. We’re listening. These issues, we’ve learned you have to pay attention to them when they’re small, because they can become big. When they’re bigger they’re much more difficult to manage. But right now, the dialogue that’s happening is at a level that is, I would say, in its infancy. To the extent that it’s going to grow, I don’t know.
Question: It seems like it’s attached to the crunch issue that has been around for a long time, and continues.
Gallagher: What I hear about that, one, yes, where crunch is in effect, there’s a definite impact. But also, I hear more and more publishers saying—they’re doing this for competitive reasons, for cultural reasons. They’re rejecting crunch. They’re saying, “That’s not how we operate.” That is an attraction for the best and the brightest, to see those opportunities and make those individual choices to go to those companies. Again, through the marketplace, which is very competitive.
Remember, the marketplace for talent and labor isn’t just video games. It’s all of tech. When you broaden it to the internet and tech, you look at the skill set it takes to be a great worker in our industry—other industry are pulling at those people as well. You just have different challenges in those industries, and probably a lot less excitement. That’s what I would say. There are other choices to be made. We’ll see how it plays out.
But yes, we’re listening. I heard a little bit at GDC, and then I had a longer conversation that provided more light on it for me when I was at the Nordic Games Conference, three weeks ago.
Question: I wanted to ask about esports and how that’s changing E3. Is that growing? Where do you see it headed? How is it going to affect the show?
Gallagher: We take this measurement after each show. Last year we had an activation right out here in Microsoft Plaza, and then we had another one inside the south hall. Those were very successful, which led to the increase you see this year.
On the bigger level, the global level, we’re seeing massive engagement. The revenue in esports is nowhere approaching the entertainment revenue you see from the platforms themselves and the core entertainment product. But the engagement levels are off the charts. When it comes to maintaining eye share and mind share, it’s fantastic that you can have esports with more viewers than game seven of the NBA Finals. Non-endemics are looking to connect with an audience.
Every August they put out the average age of major sports viewers. I think the broadcasters do it. This last August, the oldest sport is Golf, with an average age of 64. Baseball is 59. NFL is 50. The youngest, for the NBA and MLS, is 40. That’s the average viewer of these sports. The leagues are looking around—you look at what the NBA is done. They’re saying, “We need to connect with younger viewers now or we’ll lose them forever.” They’re watching esports, because the average age of esports viewers in 28. That’s the sweet spot.
That force is very strong. It’s not yielding enormous revenue right now, but if you look at the success of Activision setting up their league, it’s fantastic for them. You look at the formality of structures being set up around players, leagues, standards, arenas being built. These are the types of things that drive a lot of intensity and growth. You’re seeing that now come into E3, as E3 continues to adapt with the market we address. We’re providing outlets for the game publishers to connect with gamers. Esports is a great way to do that.
It extends beyond just, “Here’s the best in the world against the best in the world.” That’s not how sports are played. We all play sports. It doesn’t mean we have to be the best. We still like to watch other people do it, and maybe we want to play ourselves.
Question: When it comes to engagement, we’re talking about this premium demo of 18-32 year old males, high disposable income, and so on. You have all these traditional sports organizations getting involved in esports. Do you think that will spur larger network outlets like CNN, MSNBC, or Fox, on their sports sides, to start paying attention to this?
Gallagher: Change is hard for incumbent industries. We’re disrupters. We disrupt ourselves, routinely. Our industry is much more comfortable with that, and our customers, the gamer, demands that. That’s what keeps them coming back. It’s not always going to be the same. Our mindset is one where we’ll make that investment. We’ll take the risk. We’ll use new technology. We’ll use different pathways to connect. That’s our DNA as an industry, and in our consumers as well. That’s what gives vibrance to esports. It happens almost completely outside of these incumbent mindsets.
When you’ve been doing something for broadcast more than 100 years, or 40 years for cable, and you’ve been doing it a certain way, and your economic metrics are set up in a certain way, and your incentives are set up to reflect that, and you’re being judged as a public company by traditional metrics, the things that are happening on the outside can be the meteor that hits you. You get disintermediated.
If you look at what’s happening with over the top plays on the internet for access to content, traditional content, or you look at the declining number of cable and satellite subscriptions, where are people going for entertainment? The indicators are already there. Eventually those same media centers of power will either make the right decision or they won’t. Then there will be consequences. We’ve seen this play out in other technologies and other media over time. Remember that ESPN rejected esports first. Then they took it on and you can see that they’re at least dedicating some assets to it. But it feels like it should be better. It should be more.
Right now, here’s how I would look at it. I think this is also how the winners in AR and VR are going to see it. If you just say, “Here’s a traditional way of doing a video game. Now I’ll strap you in a headset and you’ll play it in VR,” it makes you sick. It doesn’t work. You have to design the game and the technology to create an experience that somebody wants to come back to. That’s experimental right now. We’ll figure that out as an industry. We’ll figure it out first, ahead of others.
When it comes to connecting with that audience, it’s probably not going to be happening out over a cable network that people don’t even subscribe to. If they’re disconnecting because they’re going over the top or getting their content in different ways, the networks are going to have to come up with their own Twitch, or a similar approach, and say, “This is how we’ll connect with this audience, because that’s how the audience wants to be connected.”
Question: We didn’t touch on monetization yet – loot boxes, subscriptions. Where do you think things are when it comes to both the rise in the use of loot boxes, and some of the legislation that’s bubbling now?
Gallagher: When it comes to monetization inside video games, our industry is built on innovation. It’s built on experimentation. You would not have free-to-play if video game companies hadn’t said, “I have a different way of connecting with the consumer where they’ll still pay for a great experience, but they’ll do it differently.”
What we’ve seen with this latest concern about the business model evolution is—the facts are really important. We engage with policy makers here and abroad, because the conversation around this, as you know, is global. It’s not just here in the United States. Loot boxes are absolutely not gambling. We’ve been definitive and clear about that from the beginning. The reason why is the gamer always gets something. The use of the monetization scheme is entirely optional. You don’t have to do it to play the game. When you do, you always get something, and then the last part of the test is, that something you get can’t be sold in the real world.
Those elements make that crystal clear to us. It’s not gambling. We’ve made that case around the country, because there have been 22 different legislative attempts by the states to focus on this. In each of those cases we’ve been successful in making the truth known, and then having the policy reflect the truth. We’ve been able to do that thus far. We’ll continue to do it.
Around the world, the same conversation is going on. There’s a disagreement—I think it’s Belgium and the Netherlands? We have two European countries that have a difference of opinion on this, and that’s going to work itself out over time. We’ll continue to make the case about the truth.
Here’s why it’s important. That innovation in business models is what drives the ability of the industry to hire the best talent, to make the next game, to make the next level, to make that magic happen for consumers over and over again. Gamers support the industry by paying for games, and then that stream is what creates what you see here at E3, and the future that lies in front of us. Those monetization schemes—the best way for our industry to address those is to get it right with the consumers.
Guess who finds out first when it’s right or wrong? The publisher gets it right away, immediately, loudly, clearly, and with impact. That’s how consumers and gamers speak to the industry directly. That force is incredibly powerful. It’s one we’ve been very responsive to. You saw that with our April changes to the ESRB rating system.
Question: You said the attempts by states—are you saying that none of those now are where they were when they began?
Gallagher: They’ve all been—there’s been no action taken, is probably the best way to say it. That’s our current state of play.
Question: You touched on Fortnite. You said it’s having an effect here, although we’re not seeing it here yet, up front.
Gallagher: Fortnite was on the floor last year! You just had to know, out of the other 2,000 things on the floor, that it was going to be the one.
Question: The bigger thing is, what are you seeing thematically as the ripple that’s going out from Fortnite? You also mentioned VR. What’s happened to the promise of VR?
Gallagher: Very quickly, the battle royale theme or genre of games—you can see the benefits of competition. There are going to be lots of choices for gamers to have similar gameplay. That’s been the history of our industry, by the way. Every time there’s a breakthrough, others come in and say, “We can do it better.” That genre of gameplay—you’ve already heard the releases that reflect that.
VR is continuing to grow, but as John Riccitiello points out, it was always going to have a different growth path than the irrational exuberance attached to it early. VR, AR, and MR all continue to be on paths of development. They launched in our industry, but their full potential will be in others. When you see it permeate the economy, whether it’s in architecture, health care, education, or other applications—you’re seeing innovations in the hardware and improvements in the experience. Those will lead to very interesting places for gamers and for the larger economy.
Question: Can you find a way to get more indie developers into E3?
Gallagher: When you have 200 exhibitors—I don’t know what the definition of “indie” is exactly, but we have incredible talent coming in. We also see every platform not just open, but soliciting and seeking indie development on their platform. That’s the same approach we take as E3, to say that all companies are welcome. We’re constantly looking to design the interface for the show so that indies can have a presence. The door is open for us to not only have them in, but to listen for ways to do it better. We do hear. We’ll continue to make those upgrades and changes. But they’re highly welcome.
Question: On the fan conversation, bringing in consumers, how do you see this changing E3 over time? Do you think this will become more of a fan fest? Microsoft is already calling that. You have EA Play. It seems like the path to success here is bringing in more consumers, and I’m not going to say less media or whatever, but making the show much more diverse in that way.
Gallagher: We did it for the first time. We took the leap last year. The feedback was incredibly positive, from exhibitors and from the gamer consumers that joined us. That’s why we’re doing it again this year. The building itself imposes limits on how many we can have. One board member last year said, “At one point Tuesday afternoon last year, it seemed like we were one hand clap away from a riot.” The show was full. We know our limits.
As you know, from years of having this discussion, the L.A. Convention Center is going to go through an evolution. It has to do that. Our industry is bursting the seams of the present construct. The new vision they’ve released just a couple of weeks ago – there was an article in the Los Angeles Times that laid out what the format could look like – gives us a much bigger footprint to accommodate exhibitors and consumers. That’s the space element. That needs to change and grow before we can do more than we have. The development around that you see here – all the cranes, the hotels – that’s helping as well. Those are additional places for the industry to deploy and have a connection with media and analysts, as well as with gamers.
Time is the other element. If we were going to have separate show days for consumers, which has been suggested—we’re well aware of how other shows are constructed. That requires access over the weekend. Our show dates that we have reserved don’t include that access at this point, but we’re working with Los Angeles and with AEG to expand that. If we were able to do that, we could accommodate with more consumers. Space and time impact E3.
We see the evolution, and consumer engagement is a super positive part of that. Some of this is symbolic. We have 2.6 billion gamers. They live vicariously the 15,000 that are here. Symbolically, it means a lot that we’re open to allowing them in, even to those who are not here.
Question: What’s the wishlist idea, though? How big do you see this possibly becoming, in terms of bringing in more people? I think of San Diego Comic-Con, way more than just what PAX does.
Gallagher: I went to PAX and Comic-Con last year, just to have hands on and see how they do. There are certain parts of that that we won’t reach or seek because the shows have a different purpose. On the other hand, there are things we’re learning from. We attend those shows and work with the organizers of those shows so that we can share that information. That evolution is going to become clearer once we have a different footprint here in Los Angeles. Once that’s known I can tell you what the vision is.
Question: That’s going to be 10 years from now, though, right?
Gallagher: No, no. They’re talking about having this done by 2020. It’s soon. But again, we’ve had this conversation with them for seven or eight years. Each year we come in and say, “Hotels, hotels, hotels.” That’s getting better. There are more. The other one is, “Upgrade the building.” Other facilities around the country are state of the art and give us an enormous canvas to paint on.