The floorspace shouldn't be the issue, if it is then it should just be moved somewhere cheaper.

The lavish list of optional extras is what's causing the problem:

build - don't build a million-dollar set. Try 20 machines and some big signs instead.
parties - duh, no time to party if you're hooked on an excellent game
hotels - you don't have to put your team up at the most expensive hotel in the area.
flights - you don't have to pay for people's flights. If they want to come, they will.
security - well, ditch the multi-million dollar setup and you won't need as much, will you.

Pretty obvious points to me, perhaps I've oversimplified them but it's like mobile phones: Don't throw your mobile phone away if it's a rubbish games console, it's a phone, not a console/camera/disco/PDA/helicopter.

Can't afford the noodles served with truffle garnish and vintage champagne? Just the noodles will do then.

Hint:
Don't cancel your main Expo if the over-pretentious one-upmanship is costing you too much, at it's core it's actually good marketing and half the techies I know would swap an eye for an E3 ticket.

Why are the companies coming if it is too expensive? If they can't afford it, then they shouldn't come. That's what the capitalist model is. Those that can afford, come. Those that can't, host parties in hotel rooms ;-)

I don't understand why the whole thing has to be shut down because of that.

Anybody who has been to E3 would realise that the majority of the people there are not in the industry and don't belong.

Trade shows are meant for conducting business, not wading through a sea of kiddies looking to grab free swag.

It sounds like E3 just fell on its own weight with costs and complexity of operations. E3 was originally about promoting games but with lavish parties, huge hotel rooms and all the money and attention going into setting up booths, it may not be profitable for many companies to promote their products at a venue like that anymore.

See what happens when you abandon the booth babes? Lesson to all you kiddies out there - remove the sex, remove the sizzle.

I hope E3 stays alive...
Going to E3 is on my to-do list before I die.

The fact that some companies are complaining is an indication that the organizers should change their methods/prices. Then it is also the exhibitors fault if they spend too much on plasma tv's/models/big flashy things. The big companies have dedicated PR people for these things, if it is too expensive then the PR is not doing their job well. Maybe the companies are trying to out-"flash" each other and that is starting too hurt them. Maybe the organizers should put a restriction on this to make it fair. People like Microsoft with their $500m marketing budget will complain but in the back of their heads they would understand.

These are all speculation on my part, since I have never been.

Here in South Africa, a local gaming magazine, New Age Gaming or NAG ( www.nag.co.za ), runs an annual game expo/megaLAN called rAge (Really Awesome Gaming Event - www.rageexpo.co.za ). It is small by E3 standards, but it made a great boost for gaming awareness here in SA. A niche stays a niche without expos or conventions.

Makes sense. People don't need these shows anymore.

Nooooo, all the booth babes will go to waste! Exploitation of the female body is what I LIVE for, man!

In a word: No

E3 hasnt been botched like COMDEX was.

When you hear that E3 is taking a "hiatus" for a year then you know it will be dead.