I'll be attending the opening keynote. At least, that was my plan up until the keynote speaker was announced.

a roadmap for other state executives who want to transform their state economies for the 21st century." I won't downplay the achievements of Governor Perry - served in the military, 20 years of public service leading up to his Governorship - but is this really a good fit for E3? What does Governor Perry know about video games? The impact of the industry upon popular culture? The challenges that are currently facing the industry?

After scouring Governor Perry's official website, there's not even an inkling that he plays Minesweeper when he's bored. But there is plenty of information about his economic strategy for Texas, which amounts to speaking around the United States and even overseas that "Texas is Open for Business." In terms of political strategies and economic growth, that's a very good tact to take but it seems to be a very broad and incongruous message to be presenting at an event like E3. Although Lowenstein never struck me as a gamer, he always came across as genuinely knowledgeable about the industry and the forces that were acting from within and without.

This seems to further cement in my own mind that the ESA is headed from troubled waters to ocean swells ten stories tall.

To carry the boat metaphor a little further, the rats have been leaving the ship, which is never a good sign. Some companies that have recently dropped out of the ESA include Activision/Vivendi, LucasArts, and id Software. The ESA has spun it a little saying these companies just decided not to renew their memberships - either way, these companies are no longer part of the ESA. There's rumor and speculation that the guy helming the ESA isn't inspiring much confidence, which lead to the above companies to depart. id Software stated flatly that it costs a lot to be part of the ESA.

Upon closer examination, the ESA would appear to be losing money, badly. Reading between the lines of a story that GameSpot ran, the ESA reports that dues went from $1 million to $4.5 million in the span of a year. The ESA was attempting to bring in revenue because their biggest cash cow, E3, had been kicked in the gut and given a hard left cross to the beefsteak when E3 was dramatically downsized in 2007. The ESA coughed up $714,000US to lobby lawmakers, fight piracy, etc. in the first quarter of 2008, which is hardly scratching the surface when you compare that to the "$18 billion" games industry. In case your calculator can't input enough zeros, it works out that the percentage of the annual revenues created by the industry against what is spent "defending the industry" is 0.0039% (for Q1 2008)!

While I have my calculator out, there are 24 members of the ESA, including Nintendo, Sony, THQ, Ubisoft, Konami, and Eidos. Let's use $4 million as a baseline for their ESA dues (also assuming that each member pays the same fee). That's $96 million in round figures. The percentage of the ESA dues against what is spent "defending the industry" is 0.7437% (for Q1 2008)!

So, the big question here is, where the hell is all the money going? Is it any wonder why ESA members are leaving? When the "Return on Investment" is in the neighborhood of a collective 3% why bother paying those hefty fees? That was the very reason that E3 2007 was such a downsize from 2006. Many of the companies complained that they weren't getting enough of a return on their own investment for the dollars they paid to attract attention so they started holding their own (controlled) events in advance of E3.

The ESA is in a crisis situation whether they want to admit it or not. Their choice of E3 keynote speaker, no matter what Governor Perry actually says, will do nothing to rally the ESA and its membership or make the game industry sit up and think the ESA is a relevant organization rather than a sinking ship.

- Omni