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Why E3 Could Leave Los Angeles

The Electronic Entertainment Expo, the videogame industry’s largest convention, could leave Los Angeles. If it does, it would cost the city $40 million a year in revenue.

The Entertainment Software Assn., which owns E3 — this is the event’s 20th anniversary — signed a three-year deal with the Los Angeles Convention Center in 2013, and is now considering requests by other cities to host the show starting in 2016.

The ESA declined to disclose the other cities vying for the show. Atlanta has hosted E3 twice, while a much smaller version took place in Santa Monica in 2007 and 2008.

A reason for E3’s move out of L.A. would be an aging convention center that needs a major update as other cities have spent considerable coin upgrading their own facilities. Los Angeles had hoped the LACC would have been expanded as part of the construction of the Farmers Field football stadium, but no team means city officials are now considering Plan B.

One major issue for ESA and other event organizers is that the LACC splits its main convention halls into two, separated by a hallway and smaller hall. That has made some exhibitors in the South Hall feel left out of the activity taking place in the West Hall (next to Staples Center), for example. Other convention centers typically off one large room for exhibitors and attendees.

E3 had around 230 exhibitors last year, with some companies bringing hundreds of people to the show from all over the world.

Farmers Field would have been built where West Hall currently stands and add new space to the rest of the LACC.

“That is no longer going to happen,” Mike Gallagher, president and CEO of the ESA, the gaming industry’s main trade organization. “All of the city’s efforts are now focused on Plan B.”

But the Los Angeles City Council and AEG, which operates the LACC’s 720,000 square feet of exhibition space, and L.A. Live complex will have to move quickly.

Plans for future E3 shows need to be in place within the next 90 to 120 days, Gallagher said, because the show typically takes a year to plan — especially for gaming giants like Sony’s PlayStation, Microsoft’s Xbox and Nintendo that build massive booths on the show floor.

“We (still) have time,” Gallagher said. “We’re going to work through this issue and have a lot of discussions with the city and the partners in the city that are critical to making E3 a success. But the time is relatively short.”

If E3 leaves, the move would cost the city of Los Angeles around $40 million in revenue each year, which is spent on hotel rooms and restaurants by the 50,000 that attend the show each year. San Diego also has had to deal with a convention center that needs a significant upgrade — now approved — or risk losing major moneymakers like Comic-Con, which attracts 130,000 attendees.

Los Angeles Mayor Eric Garcetti and California Lieutenant Governor Gavin Newsom are visiting E3 this week to try to keep the show in the city.

Gallagher stressed that the ESA is keeping its options open. “We have to make sure we’re looking at all the options and we are and there are several. E3 is a world class show that deserves a world class venue. Other venues are ready to go right now.”

It won’t be easy for E3 to move since Los Angeles is a major media market and has an airport that makes travel for the show’s 50,000 attendees from around the world fairly easy.

Yet, the number of hotels and available hotel rooms around the convention center have been cited as an issue for attendees, as has parking and restaurants.

One thing that won’t change is the time on the calendar when E3 takes place.

“We wouldn’t move the date of the show because there’s a rhythm in how things are developed in a large segment of the industry,” Gallagher said.

While the show once took place during the Consumer Electronics Show in January, “the industry has found a sweet spot where the content is best able to be shown to the world in a quality way that fits the development schedule.”

E3 also won’t start selling tickets to consumers anytime soon.

“In this venue, the sweet spot for attendees hovers around 45,000 to 50,000 attendees, Gallagher said. “We’re already at that number. Adding consumers would be too much. If E3 was to evolve and go to another venue, those questions would be revisited anew, but we will not jeopardize the production value … the quality of the experience and the value of E3 in that process.”

Gallagher added that E3 is more accessible to consumers than ever, because of digital technologies. “It’s available on every platform, Twitch is our streaming partner … you have 50 billion media impressions off the show. It’s hard to say the consumer isn’t present at E3.”

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