10 Years of E3
ESA President Doug Lowenstein discusses gaming's past, present, and future

In his annual speech to E3 media on Wednesday, Doug Lowenstein, president of the ESA, celebrated the 10th anniversary of E3 and the striking and unpredictable changes and evolutions that have characterized the gaming industry since the event's inaugural show in May of 1995.

"I thought it would be interesting to start this celebration with a look at what was and what is, so in no particular order, here are my nominations for 10 of the most notable changes between the E3 we attended in 1995 and the one about to open here this morning in 2004.

Number 10: Back then, barely anyone on Wall Street followed our industry; today, most major investment firms track game company stocks, and attendance from the financial community at the show is at record levels. Interactive entertainment, it seems, is big business indeed.

Number 9: Back then, EA was a $500 million company with a market capitalization of $1.8 billion; today, EA is a $3 billion company, and with a market capitalization of $15 billion, it is the fourth largest capitalized software maker in the world, behind Microsoft, Oracle, and SAP. EA is just one of several game publishers that have grown ever larger over the last 10 years.

Number 8: Back then, some of the leading industry names were Virgin Interactive, Spectrum Holobyte, and Viacom New Media; today, all of them are gone, replaced by companies virtually invisible a decade ago, like Take-Two Interactive and THQ. Unlike a decade ago, the message is: Only the strong survive.

Number 7: The quality of games has taken a quantum leap forward. Back then, the top-selling titles were Donkey Kong Country, Mortal Kombat III, and NBA Jam. Recently, we've had Grand Theft Auto III, The Sims, Call of Duty, and Knights of the Old Republic. In short, the games that were the buzz of 1995 look simple and charming by today's standards.

Number 6: Back then, the initials MMORPG looked more like a typo than a trend. Today, online gaming is poised to explode.

Number 5: Back then, wireless games were, well, they were not even a glimmer in anyone's eye; today, 18 percent of the products on the floor are for wireless platforms.

Number 4: Back then, the buzz was that the PC was ascendant with the introduction of CD-ROMs, and industry wags were forecasting the gradual decline of the console business; today, PC games, far from burying console games, are a $1.2 billion market, representing just over a third of total game sales.

Number 3: Back then, total North American sales were $3 billion; today, total North American console, PC, and handheld game-industry revenue is $10 billion, including hardware. Worldwide revenues of game hardware and software top $25 billion, not including online and wireless revenue. Throughout the decade, interactive entertainment has been the fastest-growing entertainment sector in the world.

Number 2: Back then, Nintendo and Sega dominated the hardware business and Sony was the upstart underdog vying for credibility. Today, Sony is currently the dominant console maker, and Microsoft--a struggling PC game publisher 10 years ago--has joined Nintendo in the battle to unseat them.

Finally, back then, the core gaming market was teenage boys; today, the average age of gamers is 29, the core demographic is 18 to 35 years old, and a third of game players are women. Literally, the faces of our audience have changed."

Lowenstein went on to discuss many of the changes that will affect the future of the industry, including developer opportunities to innovate in such areas as gameplay and story, the growing influence of videogame studies programs, the inevitability of direct download, and the evolution of community-based gaming. "All of this," Lowenstein explained, "will help expand the overall game market by giving consumers a wide variety of choices when deciding what kinds of games fit best with their interests and lifestyles, and they are a key driver that will continue to bring us to a mass-market audience." He also described mobile and handheld gaming as "the final frontier ahead."

"If and when we sort through issues related to standards, compatibility, data rates, and network speeds," he said, "we will see a new kind of smart-phone with a built-in GPS that allows for the creation of mobile games that depend heavily on social contact, communication, and community.

Overall, Lowenstein noted that the last decade has been exciting both for the gaming industry and for the people involved in it. "I've got many other memories from the last 10 years," he said, "and perhaps the best way to sum them up is to recite the lyrics of Robert Hunter as sung by the Grateful Dead: 'Sometimes the light's all shining on me; other times I can barely see. Lately it occurs to me; what a long strange trip it's been.' And so, looking ahead to the future, let's keep truckin' on."

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