By 1994, the video game industry had outgrown the Consumer Electronics Show and deserved its own trade show. The Interactive Digital Software Association (IDSA), now the Entertainment Software Association (ESA), put together a plan to hold the industry's inaugural event at the Los Angeles Convention Center, one of the largest convention centers in the United States. The IDSA had just recently introduced the industry-wide rating board known as the ESRB, which had been the result of some negative attention to the industry. The Electronic Entertainment Expo was planned in order to focus a positive light on the industry by inviting the world's publishers, developers, press, and other industry professionals.
The first E3 was all about the next generation. On March 9, 1995, just two months prior, Sega had officially announced the legit successor to the Genesis; the Saturn. The console had gone by the codename Katana up until that point, and it was revealed that Sega would release this new 32-bit system in North America on September 2, 1995 for $399.99. These plans were dashed when Sony announced that their first forray into the gaming industry, the PlayStation, would launch in North America on September 9, 1995 for only $299.99. This led Sega to make the first-ever bombshell E3 press conference announcement, a tradition that seems to happen at least once every year. Sega's CEO Tom Kalinske took the stage and announced that the Sega Saturn was already on store shelves as of that morning along with a handful of games and declared the next generation had begun today. Attendees were in disbelief, but his words were true.
Sony took the announcement in stride and continued with their plan to release the PlayStation later that year along with a slew of titles including Warhawk, Twisted Metal, Ridge Racer, and NFL GameDay. Nintendo continued their support for the Super Nintendo, but their eyes were also on the future. The Ultra 64 chipset was complete, but it would not be officially shown for quite some time. Instead, Nintendo offered attendees of the first E3 a look at the Virtual Boy, created by the same man behind Game & Watch and Game Boy, Gunpei Yokoi. Curiosity about the new hardware was high, but the curiosity did not translate to much enthusiasm. Then there was The 3DO Company, who showed previews to their M2 system, which would never see the light of day.
The inaugural E3 was a booming success and proved that the games industry was large enough to support such a large-scale show. Plans for E3 1996 quickly followed.