Kotaku is reporting today that the ESA paid a $5 million penalty last year to move E3 out of Los Angeles and into nearby Santa Monica. The penalty was triggered by the ESA's decision to break a contractual agreement to hold the event in L.A. through 2012.

According to the report, the penalty, coupled with significantly lower revenues from the downsized E3 resulted in significant dues increases for member companies. The jump in dues may have triggered Activision, Vivendi and LucasArts to rescind their membership in the ESA, which represents the interests of US video game publishers.

Everyone agrees that this year's E3 in Santa Monica didn't quite work out.

So the Entertainment Software Association is moving the show back to the Los Angeles Convention Center. The announcement comes this morning by way of an ESA press release. E3 '08 will run from July 15-17.

Despite the return to the LACC, the conspicuous consumption flavor of E3 circa 1998-2006 will likely remain a thing of the past. From the press release:
 

The event will continue to focus on the business of the computer and video game industry, with an emphasis on press events and small meetings with media, development, and other key sectors. While there will be opportunities for game demonstrations, the 2008 E3 Media & Business Summit will not feature the large trade show environment of
previous years.

ESA head honcho Mike Gallagher commented:
 

We look forward to welcoming the media and top industry executives to a centralized, business focused and personalized experience. Our program of high-level meetings, networking and personal dialogue, and industry-shaping panel discussions will capture the explosive growth we have seen in 2007 and lay the foundation for the 2008 video game marketplace.

 

Another case of Big Gaming oppressing the little guy?

As reported by Joystiq, CheapyD of CheapAssGamer has been forced to hire a lawyer to deal with Circuit City. The retailer's ire was apparently triggered by leakage of upcoming price reductions posted on CAG.

In particular, Circuit City is pressuring CheapyD to give up the identity of Speedy1961, a user who regularly posts about price drops before they happen. Most recently, Speedy1961 revealed the $100 reduction on the 60GB PS3 ahead of the official E3 announcement.

CheapyD's lawyer has filed a motion to quash Circuit City's subpoena and we certainly hope it is successful.

Beyond that, how clueless is Circuit City management? Websites like CheapAssGamer create buzz and help drive sales.

GP: We encourage you to write to Circuit City and tell them how you feel about their ham-handed legal tactics. Sounds like a clear case of SLAPP (strategic lawsuit against public participation)...

Jim Ward, president of game publisher LucasArts, spoke about the political side of the video game business in a wide-ranging interview with Mike Antonucci of the San Jose Mercury-News.

Ward also serves as the current chair of the ESA board. His thoughts:

What we wanted to do was focus the ESA on that No. 1 issue, which is governmental, state and local legislation against games. In a macro sense, maybe he's right. But my concern, quite honestly, is that as we enter this political cycle, we become a hot potato...

And, by the way, at any moment, if some kid in West Virginia goes and blows away 32 people, and they find out that he played a video game, guess what, we've got a problem again. Just as if he had watched a movie and then done that. Or just as if he had read "Catcher in the Rye" and blamed it on J.D. Salinger...

Most importantly -- and this is a belief system that you either buy into or not -- you have to believe in the sanctity of First Amendment rights. We believe you have to protect that, no matter what.

This must be Capcom's day for troubling ethnic issues.

This morning, GamePolitics reported that Resident Evil 5 was receiving harsh criticism over its depiction of African villagers as zombies to be mowed down by a white protagonist.

This afternoon the Council on American-Islamic Relations (CAIR), which describes itself as America's largest Islamic civil liberties group, issued a press release announcing that the phrase Allahu akbar ("God is most Great")  would be removed from Capcom's Zack & Wiki: Quest for Barbaros' Treasure. The puzzle adventure is scheduled for release on the Wii in October.

From the press release:

CAIR contacted Capcom after receiving a complaint about the use of the phrase in Capcom's "Zack & Wiki" game. The Arabic phrase is one of the most frequently repeated religious statements made by Muslims and is used often in daily Islamic prayers...

In an e-mail to CAIR, a Capcom spokesperson wrote: "We have already contacted the team working on the game, and the phrase has been removed from the game and will not be heard in future videos released to the public."

Said CAIR Communications Coordinator Amina Rubin:

Capcom's Resident Evil 5 hasn't even got a release date, but it' s already drawn the ire of a blog devoted to African women.

Black Looks calls into question the game's setting as depicted in the trailer, first shown at this year's E3 in Santa Monica:

The new Resident Evil video game depicts a white man in what appears to be Africa killing Black people. The Black people are supposed to be zombies and the white man’s job is to destroy them and save humanity...

This is problematic on so many levels, including the depiction of Black people as inhuman savages, the killing of Black people by a white man in military clothing, and the fact that this video game is marketed to children and young adults. Start them young… fearing, hating, and destroying Black people.

The point has been made by some gamers as well. In fact, GamePolitics reader Quad9Damage raised the same issue in a letter to GP just the other day.



UPDATE: Bonnie Ruberg has an article on this topic in the Village Voice.

...the one in which GP explains that when you meet the new ESA boss, he's not the same as the old boss...

Catch it only on Joystiq

Hey, console makers... just be straight with us gamers, please.

Microsoft still hasn't come clean on the extent or the cause of the red ring of death scandal which has vexed so many Xbox 360 owners - although they do earn props for extending the system's warranty to three years.

Now, under the harsh glare of E3 media attention, Sony has been caught engaging in manipulative PS3 pricing.

As most readers know, Sony kicked off E3 by announcing a $100 price drop ($599 to $499) on the standard 60gb PS3. Oh, and they were also introducing an 80gb model with a pack-in game for the old $599 price.

It turned out to be a tangled web, as PlayStation Europe boss David Reeves, perhaps inadvertently, let slip that when the $499 PS3's currently in inventory were gone, so was the lower price. That meant that the standard PS3 would be the 80gb model, priced at... $599.

SCEA spent most of Friday trying to get its story straight, as is well-documented by Joystiq. Indeed, Sony boss Kaz Hirai (left) confirms that the $499 PS3 will be short-lived in thsi video clip from VGTV:

The $499 price adjustment that we did for the 60 GB version for the American market, we're no longer in production for that product. So once that product is gone from the retailers shelves, then we're back to the $599 SKU only, so it's not like we have a two price strategy here in the U.S. market...

Waiting for T2 press event to start. I had heard he wouldn't be here, but new boss Strauss Zelnick is on hand...

Wondering who T2 pissed off to get such an ungodly (8AM) start time. Here we go. Zelnick onstage, says his remarks will be brief. Reminds us once again that no recording devices are permitted. "I will hunt you down," he jokes.

Introducing Sid Meier to talk about new Civilization Revolutions franchise for consoles/handhelds. Running trailer for Civ: R... Sid is onstage, gotta love the guy. Showing some game play. Says the "revolution" in the title refers to bringing Civ to next-gen consoles. Says console players don't want to read manuals, just want to get into the game. Not sure if that's a backhand compliment or not. Game looks great, not sure what system they're showing it on. Sid says release next Spring.

Zelnick now introducing 2K Sports crew with All-Pro Football 2K8. Showing trailer... looks a little arcadish, talking late hits, etc. Visual Concepts onstage. Game looks great. First 2K football game since 2006, took a shot at Madden:

So GP is at the Nintendo press briefing right now. It starts in about five minutes.

I got here early, about 8:05. Ran into Nintendo exec George Harrison, chatted, found out he is originally from nearby the GP homestead in Bucks County, PA. Nice guy...

Bumped into Chris Grant and Ross Miller from Joystiq, Shawn Sines from the Columbus Dispatch/Filefront and Curt Feldman, late of GameSpot and soon to announce something new. Sounds exciting. Curt's a pro...

While I wait for the show to start, I'll share a little E3 gossip: ECA prez Hal Halpin was seen having lunch yesterday with new ESA boss Mike Gallagher in the grill at the Fairmont Miramar, E3 2007 HQ. They spent about two hours together and seemed to get on very well.

Okay - Reggie is now onstage, touting the broad appeal of games:

Even Peter Moore seemed subdued.

When, near the end of Microsoft's E3 press briefing the normally irrepressible pitchman uveiled a special-edition olive green Halo 3 Xbox 360, the crowd hardly reacted. Perhaps sensing this, Moore quickly stashed the console - for which no price was mentioned - and moved on to some Halo 3 video clips.

From where GP sat, it was like that all night long - a press conference overly long on details, short on new information and lacking the hoped-for price cuts on 360 hardware.

The night started strong in the outdoor ampitheatre at Santa Monica High, as a five-piece band described as Halo fans played some stirring music from the game series. The woman soloing on the violin was especially good.

But it was all downhill from there - nothing unexpected, nothing exciting. Perhaps it was the smaller, more professional media crowd which lacked the usual enthusiasm of past E3 events packed with fanboys. Maybe it was residual gloom over the 360's ongoing hardware troubles, which have the potential to move from problem to scandal status in the near future.

In any case, not a good showing by Microsoft.

GP is wheels-down in Santa Monica, typing this from my hotel room (over broadband wireless, which I highly recommend over those often unreliable hotel wi-fi networks).

Anyway, since this is E3 week, things will be slightly different on GamePolitics.

GP expects to do some live-blogging of events and maybe dish about some of the E3 nightlife. As far as game news, there's no way we can - or should - compete with bigger outlets on those kind of announcements, so we'll stick to passing along the flavor of E3.

A portion of our show coverage will be channeled through short bursts on Twitter, so be sure to sign up there and add GamePolitics as a friend. And watch our Twitter channel as it updates in the right sidebar!

Entertainment Consumers Association prez Hal Halpin and his ECA headquarters crew are also here at the show. 

And despite all of the E3 craziness, we'll still have the kind of hard news coverage that you look for on GamePolitics.

GP's Tuesday Schedule:

??? - head over to the Fairmont Miramar and pick up E3 badge

5:30 - ESA reception, Fairmont Miramar

8:30 - Microsoft Media Briefing, Santa Monica High School (this is kind of a cool location, plus it is right behind my hotel - an easy walk)

9:30 - Sony Killzone 2 party (invitation-only) Sushi Roku, Santa Monica (I'd like to check this out if I can get my story done for the Philly Inquirer in time; deadline is Wed. morning)

We note this morning that Joystiq (where GP pens The Political Game column) has gotten an extreme makeover.

Looks good from here. What do you think?

E3 will certainly be different this year. But will it be better?

GameSpot has interviews with a number of companies who aren't attending for a variety of reasons.

Most notably, Tecmo boss John Inada was highly critical of the new E3:

New show management didn't seem to know what they were doing. I don't have money to waste on an experimental project. Previously, we were not treated very nicely by the old E3 management, so we didn't feel obligated to cooperate this year. I also heard that a lot of the [retail] buyers weren't coming.

A unnamed source described as close to a large, non-attending publisher also cited concerns over flagging retailer participation:

GameStop's not really going to be there, Best Buy's not going to be there. Why should we bother dealing with the ESA's confusion when we can meet with our retail partners separately and then stage our own gamers' day event later on in the year where we set the rules? It just doesn't make any sense.