E3 is not the boon to publishers that it once was, says Penny Arcade's director of business development Robert Khoo, who as the organizer of the PAX fan expo clearly has an interest, to say the least, in how things turn out.

"The reason that E3 imploded in recent years was because the publishers felt that it turned into this sort of pissing contest between them... where they were trying to figure out who could one-up each other," Khoo said. "They all thought to themselves that it just wasn't worth it."

The controversial decision to re-format last year's E3 into a smaller, more toned-down event was what Khoo calls "a self-correcting measure by the members of the ESA," in an effort to address its constituency better.

"I would imagine that that show is still trying to look out for what the publishers want - that's the whole goal of that trade association, which is to deliver the needs and try to figure out what their members actually want."

Neither Khoo nor Penny Arcade are ESA members, so he couldn't speak to whether the association is acting optimally to assure its members' best interests. "The real question is whether a show like E3 is something publishers want," Khoo said. "I guess Activision, Sierra, Blizzard, Vivendi feel that is not the case."

Earlier today we reported that several companies skipping E3 blamed their departure on "business issues," which analyst Michael Pachter pinned on poor timing for the July event, inconvenient to those companies' fiscal calendars and overlapping with times during which they must observe a "quiet period" and avoid communicating with investors.

"That blackout period is definitely interesting," Khoo said. "We don't really deal with that at all, just given the timing of our show, because its smack dab in the middle of the quarter. I'm sure that is a genuine concern, but since the third quarter ends at the end of September, it doesn't affect us at all."

According to Khoo, the years where publishers knew what to expect from E3 appear to be over, and that's hurting the event and potentially the ESA by association. After last year's "transitional period," quite a bit looks still to be up in the air, he said.

"It's in flux, and since publishers have that level of uncertainty, that is an unattractive trait to have going into a fairly large investment not knowing what you're going to get out of it."

Several industry sources expressed the same opinion as analyst Pachter: that Gallagher's lack of involvement in the industry not only results in poor planning and poor communication regarding E3, but may weaken the ESA's power to serve the video game industry in the long run.

When prior president Doug Lowenstein gave his final, impassioned speech at DICE 07, he vented his frustration at developers and publishers who refuse to defend their creative work when it's controversial, saying, "Don't duck and cover when the shit hits the fan."

But that's largely what Gallagher did when the association failed to publicly defend Mass Effect during the infamous Fox News "SeXbox" controversy. In an interview with GameDaily, he promised to "support the thrust of the industry activities and the reaction of the video gaming community," but refrained from taking any public position on behalf of the ESA.

However, plenty of the major publishers, including Capcom, Take-Two and EA, continue to support both E3 and the ESA. "It seems that at least four very large members are on the floor and doing press conferences, and it seems like a fifth unaligned company is doing a large event contiguous to that," said EA's Jeff Brown, VP of corporate communications. "That means that there's going to be no problem getting a crowd into LA for E3 this summer."

For the first time in several weeks, Take-Two is in agreement with EA on something: "As a member company, Take-Two Interactive supports the Entertainment Software Association, its leadership and its efforts on behalf of the industry," said CEO Ben Feder. "Mike Gallagher has done an outstanding job as president of the ESA and we look forward to participating in the E3 Media and Business Summit this July."

"No plans to drop out, no issue with Mike, no comment," Capcom said, when asked for their thoughts on the usefulness of the ESA and the fate of the event.

Atlus USA is one of the companies declining to participate in this year's E3, but spokesman Aram Jabbari stopped short of placing the blame on the ESA. "The nature of the show changed when they changed it from a consumer show to an invite-only press show," he said. "A lot of things have changed, but our participation doesn't have to do so much with the changes... we just chose not to exhibit this year and we do wish the ESA and all the exhibiting companies the best of luck."

NCsoft said its refusal to attend E3 was related to a timing issue with their internal development schedule and not with any conflicts about E3, but PR manager Mike Crouch declined to comment on potential issues concerning the state of the ESA. "One of the primary functions of the ESA is to manage E3," Crouch said. "And we still believe in E3, and we would have gone this year had the timing worked out for us. In that regard, we don't have anything negative to say about the usefulness of ESA."

"We would have definitely found E3 useful had it fit into our schedule this year. The judgment would be the ESA serves its purpose as far as we're concerned, as far as E3."

"I personally think that, with a lot of respect for the Microsoft guys...I think they're foolish to even worry about who's first and who's second. I think that's just stupid.

You can be second or third and still make a buttload of money...I don't ever hear Activision or Ubisoft saying that they just hate being second or third and that they envy EA so much that they can't stand it. They both make a lot of money, and are very happy to thrive.

Pachter: MS Shouldn't Worry About Being #1 [Next Generation]

"We expect that in order to save face, Take-Two management will withdraw its demand that any discussions wait until after the launch of GTA IV, and we think that management will engage in discussions with EA,"

GTA IV to sell 9m units, ship 6m in first week [GamesIndustry.biz]

"In the US, I think it will be close all year, with 360 outselling PS3 most months due to its lower price points (at least as long as it remains lower priced)," Pachter told videogaming247. "Sony gains a huge competitive advantage when HD monitor sales pick up at holiday, as I expect retailers to push PS3 as a Blu-ray player to anyone buying an HD monitor. By year-end, I think PS3 will outsell the 360 in the US by a little."

Pachter on late 2008: "PS3 will likely outsell the 360 in Europe by 20%-40%, and will kill 360 in Japan" [videogaming247, via GamePro]

For EA, sports is enough to pay for the whole [$2 billion] thing. If you get rid of sports competition, you suddenly add Take Two's $200 million per year in sports revenue and EA doesn't compete on price anymore.

Currently [EA and Take Two] compete in pro basketball, college basketball and hockey. So by taking out all of that, EA has a monopoly in sports. If these guys have a monopoly, they're not going to cut pricing on sports games as quickly. We've been seeing sports games come down [in price] before Christmas the last couple of years. That'll never happen again.

Pachter: Sports Drives T2 Deal for EA; GTA is "Gravy" [GamePolitics]

Trust me, Electronic Arts, when they threw out the 300 million [for Bioware and Pandemic]—that is multiplatform—that is not 360 only...It has to [come to PS3], I wouldn't be shocked if Mass Effect 1 came to PlayStation 3.

Bonus Round (video interview) [via PSU]

These figures imply that Microsoft will sell 1.5 million Xbox 360s in December in the U.S., that Nintendo will sell 1.7 million Wiis, and that Sony will sell around 800,000 PS3s.

Wii and Xbox 360 Sales Neck and Neck in December, says Analyst [gamedaily] [image]

First Mitchell enters the ring, loudly proclaiming that Nintendo's first party success hurts third party publishers. Then The Pachtman jumped into the ring and smacked Mitchell about with his Incomplete Analysis power move...but Michael Pachter is only one man. Then BAM! In comes IDC analyst Billy Pidgeon, taking Mitchell from behind with a metal folding chair! He's down! He is down!

"With N64 and GameCube, Nintendo suffered from a lack of third-party support and most of the third party titles that were published on Nintendo's platforms were slapped together ports of games for other systems...Now, however, things have changed: "That publishers are eager to seize the opportunities is obvious from the strong third-party support and development investment in Nintendo's platform."

Taken by themselves, analytics like these are pretty dry, but when you put them all together you can really see what a vicious bunch these guys are. One of them says something, and then guys crawl out of the woodwork to tell him he's wrong. Come to think of it, they're like our commentors! We're not all that different after all. Michel Fahey

Wii offers new challenge for third parties, says analyst [GamesIndustry.biz]

In the other corner, we have superstar analyst Michael "The Pachtman" Pachter, who argues that both EA and Ubisoft are 'laser-focused' on the success of the Nintendo consoles, predicting that Nintendo's first party share will drop 10% this cycle due to third party releases.

Pachter went on to state that he believes Mitchell offered "an incomplete analysis", arguing, "His conclusion is that Nintendo's success on the GameCube and GBA will translate to future success on the DS and Wii, so he's basing his opinion on a view that Nintendo will capture somewhere around 30 per cent market share on each of its new consoles. This is naive.

While not an analyst myself, I'd imagine one analyst saying another offered an incomplete analysis would be like another member of the gaming press telling me I write like an IGN staffer. If anyone needs me I'll be in hiding. Michael Fahey

Success of Wii does not "bode poorly", says Pachter [GamesIndustry.biz]

Blake Snow over at GamePro.com has written an article that explores this tactic, citing the famous example of Twilight Princess for the Gamecube, delayed in order to move more Wii's at launch. He speaks with industry analyst extraordinaire Michael Pachter on the subject.

But even though quality is a major reason for game delays, it's far from the only reason. "Delays occur for both strategic and quality reasons," says analyst Michael Pachter. Contrary to what you may think, publishers are just as likely to delay a game for strategic reasons as they are quality ones.

The Real Reason Behind Game Delays [GamePro.com]