July 30^th, 2006 (3:27pm) - The videogame industry’s largest and most glamorous event, E3, is likely to change considerably next year with a change in format and scale. The Electronic Entertainment Expo (E3) generally brings in excess of 60,000 attendees and features over 400 exhibitors a year and is now expected to shrink considerably beginning with next year’s show.

Rumors have arisen that discussions between the Entertainment Software Association (ESA) and general E3 exhibitors have been taking place that address the future of the industry’s annual trade show. A handful of industry publications, such as GameSpot, have spoken with some sources to confirm that the event would dramatically shrink in size and even be moved from its Los Angeles Convention Center venue to somewhere smaller.

Opposed to having 540,000 square feet for publishers and developers to showcase their games, the show will now take place at a location that would generally be the size of a meeting room, like that featured in a hotel, and will only have products showcased to a small amount of attendees ranging in the hundreds rather than the thousands.

Many reasons are being given for the traumatic downsizing of the event, one of which is the increasing cost for exhibitors, which includes the demand to assign a large number of staff to focus on the show, the cost of travel and housing, and the developer blitz to polish up demo builds of the game for attendees.

For many of the larger companies, such as Nintendo and Sony, this downsizing will not affect their game promotion much since they often participate in tours which showcase their games at various events across the nation, independently. However, this may pose to be an obstacle for smaller companies which rely on the glitz and glamour of the show to bring their games attention since they may not have the capital needed to market the games effectively enough on a larger scale.

An official statement is expected from the ESA on Monday.