The story of the first E3

Pat Ferrell almost blew his chance to launch E3. At the moment he was supposed to be pitching his new idea for a game industry show, he was sitting in an Italian restaurant enjoying a lunchtime plate of pasta.

It was a Thursday in the summer of 1994. Ferrell, the man in charge of GamePro magazine, was oblivious to the impending disaster. In fact, he was feeling pretty good about himself. He had a slick presentation all prepared for the board members of the Interactive Digital Software Association (IDSA). The next day, he planned to mosey on up to Electronic Arts’ offices and make his pitch for a brand new trade show. It didn’t have a name, as yet, but the concept was sound.

True, he’d be following a morning pitch by the might of the Consumer Electronics Show, which had its own plans for a games industry trade event. But Ferrell was, and remains, a person confident in his own abilities. For the moment, he tucked his tie into his shirt and set about his delicious penne with sausage and tomato.

Unhappily, his pleasure was interrupted by the arrival of an assistant, who informed him that Friday’s scheduled meeting was, in fact, a Thursday meeting, and that the board members were waiting for him and wondering why he hadn’t shown up for the presentation. They’d been trying to call him on his cell, but the restaurant had a strict policy of no cell phones. His phone was in the car.

“I drove up to EA like a bat out of hell,” says Ferrell. It turned out that there had been a calendar error on his invitation to the meeting, but knowing it wasn’t his fault was cold comfort. “I knew those guys wouldn’t be interested in excuses.”

Lacking the final, polished presentation documents, Ferrell improvised. He was well known to the board members, who were CEOs and senior executives from the top U.S. video game console and games companies. Ferrell was GamePro’s founder and president. As a top consumer magazine at the time, GamePro held a lot of sway. It was a primary marketing tool for mid-’90s games companies.

Ferrell knew that the CES group would have put on a good presentation. “They always came prepared, with lawyers and the whole thing,” he says. The games companies had been exhibiting at CES for years. The notion of splitting from the show and going it alone was novel. There was a disagreement among the IDSA’s senior members about the wisdom of a split with CES.

On one side, Sega wanted a new show. CEO Tom Kalinske felt that CES did not have the best interest of the game industry at heart. He had organized a Sega-specific show. At the IDSA, he was the prime agitator for change.

On the other side, Nintendo was adamantly opposed. CEO Howard Lincoln, and the company’s senior team in Japan, preferred the prestige and guaranteed traffic of CES. After all, they argued, games consoles are consumer electronics devices. They belong at the world-leading consumer electronics event, one which attracted more than 120,000 visitors to each of its six-monthly events.

Other companies, like newcomer Sony and veterans EA and Acclaim, wanted to hear the details. Presiding over the meeting was Doug Lowenstein, president of the IDSA. He was looking for unity, a showcase for the game industry, and a source of funding for his newly formed organization.

“I thought my pitch went well,” says Ferrell. “It was only afterwards that I realized my tie was still tucked in, and there was a big splash of tomato sauce on my shirt.”

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New ideas for a new era

That first E3, back in 1995, was an enormous success, attracting large numbers of visitors, fat profits, and massive media exposure.

It was a pivotal moment in gaming history, set between an era dominated by the Super Nintendo and the Sega Genesis and the world of the PlayStation and the Nintendo 64. New games, new technologies, and new ideas were everywhere. It was also an era of experimentation: of the 32X, 3D0, Neo-Geo CD, Virtual Boy, and Atari Jaguar.

Like all E3s, it was a show about the games that would define the year ahead. Visitors were treated to the likes of Chrono Trigger, Descent, Donkey Kong Land, Earthbound, Killer Instinct, Panzer Dragoon, Rayman, Resident Evil, Ridge Racer, Vectorman, Virtua Fighter, and Wing Commander 3.

The games industry attracted celebrities too. Michael Jackson was at the Sony party. Seal sang at the Nintendo party. Steven Spielberg and Sylvester Stallone showed up.

Next week, 24 years later, E3 2019 will take place. It’ll be in the same venue, the Los Angeles Convention Center. It will attract a similar number of visitors, around 55,000. Most of the big games companies will make announcements and will show off their new products. The show will attract media attention.

Over the years, E3 has changed in more ways than can be counted. It’s now firmly a part of the gaming establishment, an icon of social media buzz. It’s difficult to recall how bold the show was, how far it created a moment of affirmation for a burgeoning industry which desired that its power be recognized.

It was also a rebellion against gaming’s marginalization by older, more established industries. It was the point at which gaming ceased to be a branch of consumer electronics, and began its life as an entertainment industry.

But in its earliest gestation, it was far from a done deal.

Porta potties and porn

Before the advent of E3, every summer the games companies exhibited their wares in a tent in a parking lot outside CES in Las Vegas. “They put some porta potties out there and a little snack stand where you could pick up a cookie,” says Ferrell. “Everyone was like, ‘This is bullshit. This is like Afghanistan.’”

Tom Kalinske was especially bothered by the way CES seemed to marginalize the games companies. “You had to walk past the porn section to get to the video game section,” he says. “One year, it was raining and the water leaked onto my Genesis machines. I turned to my team and I said, ‘That’s it. We’re never coming back here again.’”

But the games companies needed shows like CES and New York Toy Fair. They were the places where retail buyers came and saw for themselves the products they’d be stocking for the holiday buying season. There was no one more important to a games publisher than the games buyer at Toys “R” Us, KB Toys, or Sears.

Kalinske held a Sega-only show at a golf resort in Napa Valley. “The retail buyers loved it,” he says. “My third-party games publishers loved it. We said, ‘Let’s have our own industry show.’ And so from that moment on, I started talking with all the rest of the guys, including Nintendo, about having our own show.”

The IDSA — it has since changed its name to the Entertainment Software Association — had been formed the previous year, to tackle the threat of government investigations into video game violence. A former political journalist and congressional aide, Doug Lowenstein, was hired to head up the IDSA’s lobbying efforts.

“The first question was, how do we fund this organization?” says Lowenstein. “The leadership felt that the trade show model would be a good revenue model.”

John Rousseau was Ferrell’s executive vice president. “The games companies had been caught with their pants down with the whole violence in games thing,” he says. “So when they formed the IDSA, they needed to fund it, and a trade show was the obvious way to do that.”

The IDSA held a meeting in which they invited CES head Gary Shapiro to hear their grievances. “I sent one of my guys to the meeting, to find out how pissed off the games companies were,” says Ferrell. “The CES people showed up and said, ‘Look, you guys make toys. We don’t really consider you to be consumer electronics, but you’re welcome to exhibit at our show.’ Basically, live with it. So my exec came back and told me the games companies were really unhappy. I said, ‘OK, let’s launch a show.’”

GamePro was owned by media giant IDG, which included a huge department with experience running now-defunct events like MacWorld and Agenda. “They knew how to organize a show, how registration works, how to keep the coffee hot,” says Ferrell. “I called them up and said, you handle the marketing and we’ll look after the sales.”

Back at CES, Shapiro got wind of IDG’s plans and reacted by announcing plans for a game-only show. That’s when the IDSA called a meeting at EA’s offices, to hear the pitches.

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Taking a cut

“I remember that the two pitches were very different,” says Kalinske, referring to Shapiro’s and Ferrell’s presentation styles. Shapiro was all facts and figures, detailing his power to leverage CES to launch a games industry event. Ferrell focused on the game companies’ point of view. He’d been selling magazine advertisements to these guys for the last five years and understood their perspective.

He also offered something that CES was unwilling to give. He offered them a slice of the show.

“The IDSA asked for some ownership in the show,” says Farrell. “We said, sure, we’ll give you a cut. We thought that if the industry owns part of the show, we’ve got it for life.” In the first year, according to Farrell, the IDSA took “about five percent of gross.” In later years, IDG sold the whole show to the IDSA.

“The CES offer signaled to us a lack of respect,” says Lowenstein. “They didn’t understand that we were becoming a behemoth of an industry. We partnered with IDG because they made a significantly better financial offer than CES. Pat and his team were already committed to the game industry, they had a lot of deep contacts and they understood us.”

Ferrell had won over the IDSA, but its individual members were not bound to exhibit at the new show. He recalls: “The assholes at Microsoft and Nintendo said, ‘CES is the show. We’re backing Shapiro. Sorry Ferrell, but you don’t stand a chance in hell.’”

“I assumed it was because I was driving this,” says Kalinske. “Nintendo just didn’t like me very much. It was part of their anti-Sega strategy.”

Ferrell, along with Lowenstein and Rousseau, even went to Japan to try to convince Nintendo to get on board. “The Japanese executives thought that leaving CES was kind of like a blasphemy,” says Rousseau. “There was a real fear of pissing off CES. What if the new show flops? Will CES even take us back? Some people questioned if we were ready to support a show, as an industry.”

Ferrell came up with a name for the show: Electronic Entertainment Expo. “I called it E Cubed,” he says. “Like, E to the power of three. But all you guys in the games media were like, no, that’s stupid, it’s E3. It’s just a lot easier to say and to type. So we got used to E3 very fast.”

E3 was originally booked to take place in Las Vegas in early summer. Meanwhile, Gary Shapiro booked exhibition space in Philadelphia for his show. “They didn’t want to lose that revenue,” says Ferrell. Shapiro timed his show for the middle of May. (Polygon tried to get hold of Shapiro, who remains a powerful figure in the tech sector, but was not successful.)

CES bows out

Ferrell is garrulous, pugnacious, and competitive. It’s not hard to see why he was popular with the hearty, blokey top brass at American games companies in the ‘90s. He has a rough and ready humor and a bottomless store of anecdotes. He revels in his past victories, and laughs at his missteps.

When he saw Shapiro’s plans, he realized he’d been outwitted. The earlier date of the show would suit the retail buyers, who liked to have their orders wrapped up by the summer.

“I thought, ‘Goddamnit, he’s got an advantage over us.’” Ferrell says. “So I contacted L.A. [Convention Center] and I said, ‘You got these dates free?’ I thought, maybe L.A. will be better anyway, because it’s only a single flight for the Japanese companies.

“They said yes. So I booked it for the same dates as Shapiro. I mean, day-for-day,” Ferrell laughs. “So if you’re a games company, you’ve got one booth, and you have to pick. There’s no way you can go to both.”

Ferrell hired a PR company and blasted out press releases every time a new company signed up to E3. He created jokey picture postcards that showed a business exec lining up at a porta potty, contrasted with another exec enjoying a luxury convention center restroom.

Within a few weeks, E3 had booked 180 booths, including Sega, Sony, Acclaim and Electronic Arts. This attracted positive commitments from retail buyers. Still, Nintendo and Microsoft held out for CES. “I had a good relationship with Nintendo, but they were a pain in the ass,” says Rousseau. “They were always a difficult company to deal with.”

But time was running out for CES. With so many companies committed to L.A., the Philly event was looking shaky. Worse, Shapiro was nearing the deadline when he’d have to spend tens of thousands of dollars on a non-refundable venue deposit.

Ferrell says: “My assistant Diana comes into my office and she goes, ‘Gary Shapiro’s on the phone.’ I go, ‘Really?’ So she transfers it. Gary says, ‘Pat, how are you?’ I say, ‘I’m good.’ He says, ‘You win.’ And he hangs up.” Ferrell holds his hand up while he’s laughing. “Hand to God. True story,” he says.

Later that day, Ferrell got two more calls, one from Microsoft and one from Nintendo. “They were both in Seattle. They wanted to know when I can be up there to show them where they are going to be exhibiting at E3. I said, ‘I’m on my way.’”

Nintendo’s return

It’s hard to tell the difference now, but back in ‘95, the Los Angeles Convention Center’s South Hall was brand new, while the West Hall dated back to the early 1970s. Games companies wanted to be in the South Hall, not the West. Nintendo was especially insistent on this point, according to Ferrell.

“When I got to Nintendo, Howard Lincoln and all the top brass were there. I showed them the floorplan and they wanted to be in the middle of the South Hall. I said, ‘Sorry, we sold that to Sega and Sony.’”

Ferrell was in the mood to have some fun. He pointed out that Sega and Sony’s booths were so large because they’d booked early. “I was basking in the glory,” he says. “I said, ‘You guys backed the wrong horse.’ I pointed at a little booth space in the corner of the South Hall and asked them if they were interested. They didn’t find it funny. They had to take the West Hall, but they were pissed about it.”

As a sop to Nintendo, Ferrell directed that registration take place near the West Hall, in order to encourage traffic toward Nintendo. But, in the end, it didn’t matter. Lack of footfall was definitely not a problem at the first E3.

When IDG ran out of floor space to sell, it began booking up nearby hotel ballrooms. Those sold out too. “People were begging me to buy even a 10-by-10 [minimum-sized booth]. I said, ‘I’ve already swallowed up 12 hotels. We’re completely out of space,’” says Ferrell.

“We ran out of things to sell. Every bus siding, every taxi top, every napkin had a logo. We actually had the printed name of a company on the drinking straws. People would call us up and go, ‘Do you have anything else, because we’ve got an extra ten grand in the budget?’ I’m drinking a cup of coffee, I say, ‘How about the tops of coffee cups’ […] they’re like, ‘I’ll take it.’”

Marissa Roth/The LIFE Images Collection/Getty

The press conferences

The media narrative of winners and losers at E3 began in that first year, as the companies made their pitches during a series of keynote speeches. They were mostly dull speeches that took place in an auditorium in the convention center. Very little gameplay was shown, but lots of stats and PowerPoint screens were called upon

Even so, the keynotes delivered some big moments that have taken on an almost mystical significance in game industry lore.

Nintendo’s indecision about the show meant that it didn’t have much new to announce. The Nintendo 64, then known as the Ultra 64, was still a year away from a full launch campaign and was displayed in unfinished form. The company’s main hardware focus in ‘95 was a curiosity called the Virtual Boy, which turned out to be a commercial turkey. Nintendo’s biggest focus was Donkey Kong Country 2 on the Super Nintendo. At his keynote, Lincoln spent much of his speech on the evils of software piracy.

The 3DO Company and Atari both had booths for their respective 3DO and Jaguar consoles. But by then, both companies were broadly understood to be of marginal interest.

The real battle was going to be between Sega and Sony, which were both preparing new console launches. At first, it looked like Sega had got one up on its new rival Sony, when Kalinske announced the surprise that its new console, the Saturn, was immediately available in stores.

But it soon got about that the numbers of units available was inadequate, and it was well known that there weren’t enough games ready for the console. It would come to be seen as a moment in Sega’s decline.

“Sega in Japan were worried that we might be preempted by Sony and we would lose some momentum,” says Kalinske. “They felt that it was the right thing to do. I hated doing it, and I think history shows that I was probably correct. The whole thing was just a disaster.” Saturn was priced at $399.

Sony had the first drop-the-mic moment in E3 history. The company began its presentation with an overly long video about its pedigree in consumer electronics, one which visitors to the company booth were also forced to watch before they could enter the gameplay area. Then Sony’s Olafur Olafsson gave a long talk about CD-ROM technology before finally teasing a price announcement and introducing Steve Race, the man in charge of launching PlayStation in the United States.

Race walked onto the stage, said “two-ninety-nine” and walked off to whoops and cheers. Sony would be coming to market at $100 cheaper than Sega. This was massive news both in the media and among gaming’s retail elite.

Nemer Velasquez was a junior marketing assistant for Sony at the time. He was in the hall for the announcement. “For Steve to drop the $299 announcement and walk off was a huge statement,” he says. “It was one of those ‘wow’ moments. We just killed it. I was in the room and I was ecstatic. I knew this was going to make the biggest noise for us.”

Andrea Vassallo was in charge of public relations for PlayStation. She says, “Before the show there were a lot of skepticism with regard to what we were bringing to gaming. Steve Race was laser focused on our objectives and our timeline. I felt like that show solidified our position.”

The show floor

In 1995, Anthony Parisi worked at a games retail store. He made it his business to go to CES, and then to the first E3. He remembers that there were a lot of people in suits at the first E3, as well as constant stage shows and “booth babes.”

Parisi, a keen photographer, took more than three hours of video footage of the first E3, which he released on YouTube in 2017. He has fond memories of the way games were exhibited back then. “A lot of companies were just showing alpha or beta versions of their games,” he says. “There were no polished demos. You could pick up a SNES controller and play a game or have one of the reps from a developer jump you to somewhere deep in the game. If it crashed, it crashed. No one cared. Now the demos are all carefully curated.”

As a games retailer, he found the experience useful, especially on those days before internet use was widespread. “When I was back and working in the store, [customers] would all come in and just hang out and we would talk about what was there and what I saw and played. It was like they were getting inside info before anyone else.”

Christian Svensson was working for a Jaguar fansite when he visited the first show. He later became an executive for various games companies, including Midway and Capcom.

“E3 was definitely a major step up from the industry’s efforts at CES,” he says. “Booths were bigger and flashier and there was a decidedly different feeling of a game show versus an electronics show. But, looking back, it was still very amateur relative to E3 today. The stands were all much smaller than today.”

“The booths were drapes and poles in the beginning,” says Rousseau. “It wasn’t like it became in the next few years. Part of the plan was to increase the number of members of the IDSA, so we made sure not to price the little guys out. Because we had the big guys, we could afford to give the little guys a break.”

Still, there was the usual problems with noise levels. “Sega kept turning their music up,” says Ferrell. “They turned their speakers towards Sony. The Sony guys couldn’t hear themselves talk in their meetings with retailers. I had to tell them to turn it down. I felt like the guy at a high school breaking up fights.”

There were other teething problems. The registration lines were too long. Musical entertainers were hired to ease waiting visitors’ frustration, and coffees were brought out to those in line.

For a time, it looked like the show might need to close its doors due to high volumes of traffic. In those days, entrance to E3 was trade only, but a business card was usually enough to get in.

“The official number for that show was around 55,000, but we estimated it was probably 10,000 more than that, at least,” says Ferrell. “We were printing 25,000 copies of the official show daily [magazine] but they were always gone by 10 a.m.”

Lowenstein says: “At one point on the first day the LACC, people came to us and said they were worried that the fire marshall would shut the show down because of the crowds. I was delighted. I thought, there’s no better story than the show being so popular that the fire marshall has to shut it down for an hour or two. But that didn’t happen.”

The media latched onto the popularity of the new show. It moved on from narratives about violence to the increasing cultural impact of games. “They just wanted to talk about how popular it was, and how many people were there,” says Ferrell. “I spoke to ABC, CBS, you name it. I went from one mic to the next giving interviews. My mom called me the next day and said, ‘You’re all over the TV!’ It was incredible.”

The show goes on …

“It was extraordinarily gratifying and satisfying to feel that we had all pulled this off together,” says Lowenstein. “At the time, there were many people who said that we’d made a mistake by going up against something as powerful as CES, but we’d done it.

“After the first show, after the exhilaration had worn off, I knew that we had to start work on doing it again. We needed more space. We needed to create another show the next year that was even bigger.”

In the following years, the IDSA learned enough about hosting a trade show to buy E3 outright. IDG had no choice but to sell. Without the games companies who made up the IDSA, there was no show. IDG carried on as a contractor, organizing elements of the event.

In the years to come, there were serious missteps, such as the decision to relocate to Atlanta for the third and fourth E3s, and the scaling down experiment in 2007 and 2008, when the show became a staid business convention, held in hotels scattered around Santa Monica.

In more recent years, the show has sought to extend its reach by opening its doors to an increasing number of public visitors. Even so, major games companies often decline to take space on the show floor, staging events elsewhere in L.A. This year, Sony is a notable absence, taking a pass for the first time in E3 history.

Even if filling the floor space is an enduring difficulty, the show’s live announcements are global media events, broadcast live around the world to millions of viewers. That is part of the first show’s early legacy, when cramped ballrooms played host to business execs making pricing and release date announcements that achieved real drama.

“That first year. you could hardly move on the show floor,” says Ferrell. “The crowds here enormous. But people were euphoric. I remember thinking, soak this in because it’ll never happen like this again. I knew that in the future people would complain about the crowds or the food or whatever. But that first year they were just happy to be there.”

Keep an eye on Polygon’s E3 2019 coverage, as the show unfolds.

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