History Lesson: The story of E3

1995 was an iconic year for video games.

It was the year of the first PlayStation, the Sega Saturn… the Virtual Boy. It was also the year of Donkey Kong Country, Yoshi’s Island, Command and Conquer and Worms.

And it was the year of the very first Electronics Entertainment Expo.

The birth of E3 was partially driven by the determination of Sega’s US boss Tom Kalinske.

Back in the early 1990s we always used to show at CES in Las Vegas,” recalls Kalinske

We were there alongside the guys that were showing their new computing systems, or TVs, or telephones.

And the CES organisers used to put the video games industry way, way in the back. In 1991 they put us in a tent, and you had to walk past all the porn vendors to find us.

That particular year it was pouring with rain, and the rain leaked right over our new Genesis system. I was furious with the way that CES treated video games, so I started planning to get the hell out of CES.”

Sega launched its own independent trade show in 1992, where it invited third party publishers and retailers to the Silverado Country Club. It was a huge success, and the following year Sega went even bigger, and even invited its arch nemesis Nintendo. But they didn’t show,” laughs Kalinske. We were just so competitive back then.”

Meanwhile, as Sega began its slow transition away from CES, the US games industry was embroiled in a debate over violence. The US Senate was worried that Mortal Kombat was damaging the minds of children, and called for a video games age ratings system.

We at Sega had our own rating system,” says Kalinske.

We started that in 1992 and it’s like the ESRB one we have today. I said to the US games industry, we need a market-wide rating system and we need an association to police it.

At the time the software publishers association, in our opinion not just mine, wasn’t doing an adequate job in representing the games industry. They were more concerned about PC software. It took a while but I finally got us all to agree to start the Interactive Digital Software Association (IDSA). The next step was to adapt a rating system, and then to create an industry show – because we were important enough to have one.

To get it going initially, Sega lent the IDSA $300,000 and so did Nintendo. We financed the association, the rating system and the first E3.”

1995’s E3 saw PlayStation and Sega go to war.

Sega had a surprise up its sleeve, it was going to announce that its new Saturn machine would launch the same week as the show.

I didn’t want to announce that,” says Kalinske.

The Board at Sega said that as Sony is launching in the Fall, then you have to launch immediately. But we didn’t have enough hardware or software to fill the shelves. I had to make an awful decision, because I couldn’t give every retailer hardware and software. So we picked a couple of retailers and we launched with them immediately that day at E3. That’s not how you launch a console.”

Sega ended up alienating retailers, while Sony hit back at its own press event with a speech that just featured the PlayStation’s (much cheaper) price – ‘299′.

Oh the speech? The shortest speech in the history of E3,” laughs Steve Race, who was in charge of PlayStation US at the time.

Up until the very last minute we were debating what the price was going to be. It was varying between $299 and $399. We finally got the go-ahead early in the morning. I have no idea what I’d have said if they’d have insisted on $399. You could probably tell, but I didn’t have a speech prepared.”

The names may have changed, but 21 years later, and E3 remains an exciting industry battleground.

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