The Death Rattle of Large Scale Tech/Gaming Events?

A few weeks ago I attended CES for the first time. CES stands for Consumer Electronics Show. It is the largest annual consumer technology trade show in North America and one of the largest annual tech shows in the world. The first CES was held in 1967, 52 years ago. I’m glad I was able to attend this year. Not only because it was an amazing experience that I’ve always wanted to have, but also because I don’t know how much longer CES will be around.

I have been noticing a trend in recent years with big corporate tech and gaming events. They’re dying. Not all at once. It’s not fairly obvious. It’s a slow death brought on more by the winds of change coupled with rampant, unsustainable profiteering rather than some singular obvious occurrence. I’ve attended and continue to attend a number of these events for work throughout the years. The ones I have the most experience with personally are Computex and Taipei Game Show, both held in Taiwan, where I live, but my company is involved at some level with larger and smaller tech/gaming events all over the world. This gives me a level of insight that most members of the public simply don’t have access to. And it’s because of this coupled with other obvious clues that I must conclude that the current large scale events model is dying and if it doesn’t change fairly soon will be gone for good.

computex

I first started to notice this with E3 back in, I believe, 2016 when Nintendo first decided to stop attending the show in person. And I want to be clear that this trend is happening to many if not all larger events around the world and not just specific ones. Nintendo opted simply not to present at the show. They made their in house presentation and released it digitally on their own site. While we can’t know for sure, I’m fairly certain Nintendo didn’t pay E3 a single dollar to have them show the video on their screens during the show. They simply did it because they knew people would rather tune in to Nintendo’s presentation as opposed to anything else that would be shown at E3 during that time. And no other company was dumb enough to try to directly compete with Nintendo’s presentation release time slot. This Nintendo Direct concept seemed like madness when first announced but ultimately was a huge success and has continued every year at E3 since that first experiment and has since then expanded to multiple presentations a year from Nintendo not tied to any specific corporate events outside of their own calendar. Now in 2019, SONY has announced that they too will not be attending E3 this year in favor of their own currently undisclosed means of conveying information to the public and media.

It’s fairly safe to assume that E3 is going to suck this year. Microsoft/XBOX in its current form can’t carry E3 alone. EA, Blizzard, and Activision are all dumpster fires at this point. Bethesda has a lot of bad blood right now and The Elder Scrolls VI is still years away, leaving us pretty much Doom Eternal and maybe another Wolfenstein game from them? And the rest of the bit players just aren’t important enough to make E3 worth your time. The rest of these companies aren’t worth much more than a couple hours of watching trailers on YouTube and a few tweets. So if this trend continues and nothing about the model drastically changes in the near future, E3 is essentially on its way out. And that should be fairly obvious to everyone.

Sony and E3 BreakUp

In similar fashion to E3, I noticed something odd about CES. Many larger companies, including my own, aren’t actually attending CES anymore. What many companies, big and small, are now doing is showing up to Vegas, renting a suite in a random hotel, and just inviting media, customers, and other industry contacts to just come see their stuff in private by invitation. This is exactly what my company and many others did at CES this year. Some examples of companies that did this exact thing at the show this year include Patriot/Viper Gaming, Cooler Master, and Alphacool. These are all fairly well known companies in the PC DIY industry. Several smaller companies you’ve never heard of did this same thing and have for some years now. I even found this forum post from back in 2010 where some companies got caught doing this at the actual hotel CES was held at and got kicked out. So this is by no means a new practice. And I see the same thing done by a number of companies during Computex in Taipei every year as well. This practice is now the norm. The sad thing is the companies that run these events know this but aren’t doing anything to address the reasons that it’s happening. Like EA and microtransactions, they’re just pretending nothing is wrong and doing business as usual with no consideration of what this means for the future of their event and events in general.

the rent is too damn high

Let’s talk about why this is happening. There are a number of specific and easily identified causes of this trend. Not so surprisingly, all of them come down to money. The biggest issue I have identified is cost of booth space/attendance. The cost for companies to attend these events has grown to unrealistic proportions. Even companies that can afford it aren’t happy to just throw money away unnecessarily. Let me use my own company’s CES 2019 experience as an example. We rented a penthouse house suite in the top floor of a Vegas hotel for five nights to attend and present during, but not officially at, CES. This penthouse suite had two bedrooms, a dining room, a living room, and a connected entertainment space added onto the living room. It also came with three private bathrooms, multiple balconies, and a hot tub, which sadly we didn’t use. As this was a private suite, we had security, control of who entered our suite, were able to insure the safety of the products we were presenting, and we could control our own hours for presenting regardless of what the official CES booth times were. We got all of this for under $20,000 USD a night including those bullshit resort fees and taxes. At five nights, this totaled just under $100,000 USD. Now that’s a lot of money. But to get a space on the CES show floor at a smaller size than what we had but large enough to meet our minimum requirements, we would have had to pay $200,000 USD. Without the private security, control of our traffic, safety of our products, three private bathrooms, the same amount of space, and of course the hot tub, we would have had to pay more than double what we paid for that suite. That’s preposterous. And that’s just the space. It doesn’t take into account the many other costs of attending CES. You have to pay to get your staff there and their hotel rooms and their food. You have to pay the cost of shipping your products there. You have to pay contractors to set up your booth. You have to pay media to show up and make videos about your products, because they don’t give two shits about journalistic ethics or conflicts of interest. The total cost of doing an event like CES even when you save on the space is astronomical. And remember that in the case of CES, the booths aren’t even all located in the same building or location on the Vegas Strip so the idea that having a suite is inconvenient do to location doesn’t even really apply as long as your suite is in the general area of at least one of the four buildings the show is held in.

ces 2019 map
CES 2019 Map

You also have to consider the value of attending the event. These events are usually not public. Though it’s called the Consumer Electronics Show, CES is not open to the public. It is a private trade show that’s reserved for industry members and media. Of course many members of the public sneak in, but really the bulk of consumers see what’s being shown at CES, and most events like it, via media through YouTube videos, live streams, tweets, and so on. Even if the event was totally open to the public, the bulk of consumers would still rely on media platforms because the event is located in a physical location. Most people can’t afford to travel just to see the new overpriced computers coming out in the next year. One of the largest markets in the world is China. Most people can’t even get out of China. How do you think the majority of consumers will find out about the next iPhone? It won’t be because they went to some event held in Las Vegas. So you have an event that’s becoming more and more expensive to attend while the value of attending that event is forever declining as markets shift, grow, and change. This was one of the main reasons Nintendo gave when asked about the change from traditional E3 presentations to the Nintendo Direct model. Their largest market is Japan. Why would it make sense for them to spend boatloads of money to present at a show where most of the people attending/watching would prefer to see another COD or loot shooter in a language that most of their largest market doesn’t even speak? It simply doesn’t make sense from any sensible money management standpoint. It’s also considerably cheaper and more effective to produce videos in house and distribute them through in house corporate channels and free social media platforms than it is to pay media to make content based on your products and hope the content presents said products in a positive way. Remember that even though media charge companies to come check out their booths/suites and make videos about their products, there are no guarantees about what the content produced will say. They can and often do take payment, show up to the booth, and then make videos where they shit on the company’s products. Personally I think this level of honesty is a good thing and hope it continues, but media charging to create content when they rely on that content for their channels to survive is and always has been odd to me.

nintendo direct e3 2018

Finally, the need to attend events from the user standpoint is dying as well. Just last week, PlayStation had a concert by Utada Hikaru for the upcoming Kingdom Hearts III. PSVR owners could attend the concert in VR and have front row seats. PSVR is expensive for sure. But it’s much less expensive than flying to Las Vegas, getting a hotel room for multiple nights, and dealing with the various other costs of traveling. The CES badge on its own was $300 USD if you bought it at the door. At the time of writing this, I can buy a PSVR bundle with two games, one of which I tried for the first time at CES this year, for under $280 USD not including taxes and shipping. Even less if I’m willing to buy it used. Why would anyone ever pay to go to an event again if you can attend them from the comfort of your home in a high definition, possibly interactive VR experience? It simply doesn’t make any sense. It’s not exactly the same as attending the event in person, but for the average person’s needs, it’s close enough.  You charge people $20 plus the cost of the hardware to attend any event they want and don’t ask them to leave their home or even wear clothes while attending the event and most people will forgo the need to actually touch and smell the products in person. That’s the entire model of Pay-Per-View fights, minus the VR, and it’s still a profitable business model.

psvr amazon

I can go into more specific details about why events are dying, but pretty much it comes down to the companies that organize them continue to raise costs beyond the realm of practicality, companies are actively seeking out and finding cheaper alternatives to attend or circumvent the need to be directly involved in these events because of the rising costs, and the public can’t really attend the events for the most part so the value of said events is limited to begin with. Now let’s be clear, these events weren’t originally established for the public. CES, Computex, E3, and most of the other well-known ones are industry exclusive trade shows that have allowed media to get involved as a way to include the public in later years. But that was never their original intention. These shows exist for the sake of conducting business. Distributors and buyers meet with producers to try to make deals. That’s the point. And that can now all be done digitally as well, so the value of these shows even at their core is dwindling while the added burden of paid media has increased the cost of attending the shows with no concrete guarantees about the returns on those investments.

Now in a way, I think it’s sad. These events are fun. I like attending them. I find value in attending them both personally and professionally. And regardless of how little value they actually have, the public tends to like them as well. Gamers look forward to E3. It’s a waste of time and money that usually disappoints in the long run because of misleading marketing and over promising from developers, but it’s still fun. It’s an enjoyable part of the industry that brings people from all over the world together to discuss their like-minded interests. That’s a good thing. Especially in 2019 when people are so divided on everything else, including gaming itself. So I don’t want to see these events die. But make no mistake they are dying. Pretty much all of them are dying. And if something doesn’t change very soon, I do believe we won’t see CES make it to 60 years. At least not in its current form, size, and popularity.

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