Video gamers' toned-down E3 is blow to L.A. tourism.

Tourism officials tried to put a positive spin on it, but L.A.'s convention business took a big blow last week when it was announced that the massive E3 video game industry trade show would be downsized next year.

The Entertainment Software Association is changing the meeting's business model in 2007. Rather than hold one massive annual convention for online and video game makers, the association believes it can better serve its members with several smaller meetings.

Los Angeles convention bureau officials reacted to the news that the convention center is losing one of its biggest events--the trade show fills some 36,000 room nights each May--with a memo sent to hotel general managers claiming the loss provides an opportunity to get two or three smaller commitments in its place.

According to the bureau, E3's long, 10-day setup and five-day move-out has meant that the downtown center has been off-limits for most of the month of May, despite the fact the E3 event itself only lasts about four days. May is widely considered one of the two or three prime months for conventions. Because the center has been booked, officials have had to turn away meeting planners seeking conventions in May, the bureau said.?

"What is equally clear is that the absence of E3's several weeks of move-in and -out requirements now frees us to sell what is a very high demand period of the year," Mark Liberman, president of L.A. Inc., the city's convention and visitors' bureau said in the memo. "As you might expect, sales calls are being made now to inform organizations that have expressed an interest in what had been the E3 time slot."

In making the announcement, Dick Lowenstein, president of the software association said that the E3 show--which has turned into a spectacle complete with scantily clad women--needed to be toned down so more business could be completed. During the show, video game makers such as Santa Monica-based Activision Inc. and Agoura Hills-based THQ Inc. release previews of upcoming titles and cut various deals.

"Over the years, it has become clear that we need a more intimate program, including higher quality, more personal dialogue with the worldwide media, developers, retailers and other key industry audiences," Lowenstein said in the announcement.

While most of these smaller events would remain in Los Angeles at area hotels, convention bureau officials acknowledge that the downsizing would probably result in fewer overall room nights booked, which will translate into less overall tourist spending for the L.A. economy. That's hardly a good sign when the city is trying to drum up interest in conventions amid construction of the nearby L.A. Live entertainment complex and a planned hotel.

Still, Liberman took pains to note in his letter that the software association's decision "is related specifically to the demands of its industry" and not any issues with the city or the convention center.