GameSpot has learned that tomorrow the Entertainment Software Association (ESA) will announce changes to the format and scale of the Electronic Entertainment Expo (E3), the game industry event that typically draws in excess of 60,000 attendees and includes over 400 exhibitors.

On July 28, the Web site of UK trade magazine MCV reported discussions had taken place between the ESA and E3 exhibitors which addressed the future of the annual trade show. GameSpot spoke with informed game industry sources late Friday and Saturday and learned that the show would radically shrink in size and move from its usual Los Angeles Convention Center (LACC) venue to a smaller location.

Sources said that rather than fill the 540,000 square feet of the cavernous LACC, the show will take place at a location that would support exhibitors in meeting room space only, with companies showing their wares to a select group of attendees numbering in the hundreds rather than thousands.

One reason behind the downsizing of the show can be attributed to the dollar cost of the event to exhibitors, including the demands on companies to assign large numbers of staff to focus on the show, expenses associated with travel to the show, and the added expense to polish game builds and demos to be shown to attendees.

While the largest of E3 exhibitors could support their own marketing and promotion of upcoming games, the smaller companies which rely on the attention that E3 generates may have no recourse other than to market their games independently. But a smaller E3 would impact more than the game industry: the local hotel and related entertainment and service industries in Los Angeles take in more than $50 million during E3--the estimated amount attendees and businesses spend over the course of the three-day event.

One source added that the new format of the show may actually result in a more productive environment to demo games to the media, although they stopped short of full disclosure: "My lips are sealed until after the weekend," the source said.

An official statement from the ESA outlining the changes will be released on Monday, numerous sources said. E-mails to the ESA for comment were not returned at press time.