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TheStreet Open House

At Video Games Confab, No Bells and Whistles

SAN FRANCISCO -- It's a make-or-break year for the E3 Media & Business Summit, one of the biggest events in the $18 billion video-game industry.

Stripped of the glitz and hype of the past, this year's show, which opens next week, is a smaller, quieter affair that is struggling to keep retail distributors, media and investors interested.

The biggest news is expected to come from the major console makers, including a possible price cut, a look into new games and hands-on time with some upcoming releases.

In all, it will be a critical year for E3, says Tal Blevins, vice president of games content for IGN.com. "This year will be a big test to see if there will even be another E3 or who will participate next year," he said. "Companies will see how much coverage they get out of the show and how much value they are getting out of the conference."

"E3 is significant this year only because Sony (SNE) and Microsoft (MSFT) are claiming they are going to unveil something big at the conference," says Dan Ahrens, portfolio manager for the Ladenburg Thalman Gaming and Casino fund. "That's important because we know what happens with the PlayStation and Xbox 360 can drive what happens to the independent publishers' games."

For investors, E3 is likely to be a mixed bag. Analysts say announcements from E3 are unlikely to impact any video-game stocks in the short term, but they hope to be there to watch what to expect later in the year.

"The conference used to offer retail, media and investors an early look at games and an opportunity to speak with company managements," says Michael Pachter, an analyst with Wedbush Morgan. Now the games have long since been announced and the event is virtually useless for retail and for investors."

This year, E3 is off to a rocky start. The conference has seen a change of venue from Santa Monica to Los Angeles.

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