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yushire said:
Why the venue was so small? What happened to E3? :(

 I'm sure someone else here has more info, but I belive this is basically what happened.

E3 was originally supposed to be an industry only event. Over the years it grew bigger and bigger, involving many people (not just industry anymore).  Many of the larger companies were spending lots of money on putting on a "show" basically and they felt the returns were not worth it.  They threatened to pull out unless changes where made, which resulted in E3 2007 being a smaller, industry invite only event.