Creation of E3

The Electronic Entertainment Expo, commonly referred to as E3, is a premier trade event for the video game industry. The Entertainment Software Association (ESA) organizes and presents E3, which many developers, publishers, hardware and accessory manufacturers use to introduce and advertise upcoming games and game-related merchandise to retailers and to members of the press. E3 includes an exhibition floor for developers, publishers, and manufacturers to showcase titles and products for sale in the upcoming year. Before and during the event, publishers and hardware manufacturers usually hold press conferences to announce new games and products.

Origin
As the game industry grew rapidly during the early 1990s, industry professionals felt that it had outgrown the older trade shows. According to Tom Kalinske, CEO of Sega America, "The CES organizers used to put the video game 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 rain, and the rain leaked right over our new Genesis system. I was just furious with the way CES treated the video game industry, and I felt we were a more important industry than they were giving us credit for." Sega did not return to CES the following year, and several other companies exited from further CES shows.

Separately, in 1994, the video game industry had formed the Interactive Digital Software Association (IDSA, later becoming the Entertainment Software Association, ESA, in 2003) in response to attention the industry had drawn from the United States Congress over a lack of a ratings system in late 1993. The IDSA was formed to unify the video game industry and establish a commission, the Entertainment Software Ratings Board (ESRB) to create a voluntary standard rating system that was approved by Congress.

The industry recognized that it needed some type of trade show for retailers. According to Eliot Minsker, chairman and CEO of Knowledge Industry Publications (which produced and promoted the show with Infotainment World), "Retailers have pointed to the need for an interpretive event that will help them make smarter buying decisions by interacting with a wide range of publishers, vendors, industry influentials, and opinion leaders in a focused show setting." Attempts were made between the video game companies and the Consumer Electronics Association (CEA) which ran CES, to improve how video games were treated at CES, but these negotiations failed to produce a result. Pat Ferrell, creator of GamePro which was owned by International Data Group (IDG), conceived of an idea for starting a dedicated trade show for video games, building off IDG's established experience in running the Macworld convention. Ferrell contacted the IDSA who saw the appeal of using their position in the industry to create a video game-specific tradeshow, and offered to co-found the Electronic Entertainment Expo with IDG.

Though several companies agreed to present at this E3 event, Ferrell discovered that CEA had offered video game companies a dedicated space at the next CES, which would have conflicted with the planned E3 event, requiring the companies to pick one or the other. Most of the IDSA members supported E3, while Nintendo and Microsoft were still supportive of the CES approach. After about three to four months, Ferrell was told by CEA's CEO Gary Shapiro that he "won" and had cancelled the CES video game event, effectively making E3 the premier trade show for the video game industry.