Michael Gallagher

President of Entertainment Software Association

30 member companies, 90% of US market.  Represent ESA and interests in Washington. 

“The New Gamer”: Closing Gaps in Our Industry

In our growth we have grown like a tree, roots spreading out but not covering everyplace.  We’ve left groups behind.

We are now mainstream.  Videogames have arrived.  One of fastest growing industries in the US.  4:1 exceeded our GDP share.  9.5 billion in 2007.  19 billion including hardware.  268 million pieces of software.  2 billion in portable games.  Greatest growth: family entertainment.  17.2% of all games, 8.3% last year  13.4 million portable games vs 4 million iPhones.  MCI: 8 billion.  That’s the SMALLER of the two companies in Activision Blizzard. 

Halo 3 open sales revenue beat Harry Potter Deathly Hallows and Spiderman 3.  Must be bigger than 1 million or 5 million.  There are 300 million in the US, 110 million households.  We can reach more than 5% of that population.

We have “expanded the base”.  Typical gamer no longer exists.  Now includes senior citizens, business executives, hospital patients.  Average gamer 33 yrs old.  Over 50 yrs is 24% if gamers.  67% of heads of households.  38% are women.  Half of parents game with their kids.

What do we need to do?  Expand what we do, tell our story, support our interests. 

Remember our base: avid gamers are the start and when we deliver for them, they deliver for us.  Those are the guys that propelled Halo 3 past Spiderman.  Grow to mobile platform, online. 

Welcome new gamers: women, seniors.  Easier and accessible games.  Wii Bowling, Rock Band.  Shorter games for casual gamers. 

Embrace Active Play: DDR, guitar hero.  YMCA and Golds Gym use videogames as part of their programs.  Change the stereotype of the couch potato.  Become the workout tool of the next generation. 

Expand what we do: Foster entertainment relationship.  With Hollywood and music.  Beowulf’s CGI and Lara Croft.  GH3 at Sundance panel discussions.  Bruckheimer + MTV new dev studio.  Peter Jackson and Halo.  Guitar Hero and music.  Madden music tracks. 

Broaden uses of games: Serious applications.  Training for EMTs.  Education.  Government functions training.  PS3 folding@home to make largest distributed computing program in the world. 

Tell our story: expand marketing.  If everyone is a gamer, advertising must reflect that.  Seniors, women.  Appeal and attract to all of America.  Nintendo booth at the AARP convention.

Change what we say: Engage parents.  ESRB.  Parents are our partners in growth.  86% of the market was T or below.  Way more than movie equivalent.  Big investment in hardware requires parents to spend $$.  What is the line between entertainment and exploitation?    ESRB is the gold standard of media disclosure standards.  Work with retailers to make sure kids buy appropriate games.  Parental controls on all major platforms so parents can set the level of gameplay they want and have confidence in the system.

Support our interests:  Advance our policies.  Unfair taxes.  Work together to support our political mission.  Have our voices heard by political officials.  We are mischaracterized by media and devalue the cost and contribution.  Lay all societal ills at our feet.  Taxing video games to support pet projects.  ESA is proud to lead the efforts to fight this.  Attacking game piracy through education.  Trade advocacy to foreign governments.  Videogames are protected speech under the Constitution, upheld 9 times but still 100s of bills keep coming up to impose new statutes.  Winning is fine but the core of the problem is to be in alignment with parents and state govt leaders.  Also supporting tax legislation to make growth more favorable.

Join the Videogame Voters Network!  Register at vidoegamevoters.org.

Encourage young game developers.  Interest in this as a career path is growing.  Technical schools like Carnegie Mellon and USC are offering courses in videogame design and development.  Embrace this trend and create opportunities.

These gaming stats are on the gaming website…. TheESA.com, other stats come from NPD.

Q: traditional view is that our industry is insulated from economic downturn, what’s ESAs opinion on the coming recession?  Our products do well in a recession because the value is so high.  Many many hours in a game for the price of taking the family to a movie.  So our industry should be one of the more resilient ones which gives us more influence with the government – we’re not subprime.  When we’re a growth engine we get more respect.

Q: Upcoming presidential election, will we be in the crosshairs?  Keeps him awake every night.  We must be ready to be brought in, we have a history of being a political football.  We are engaged with the campaigns (easier now that there are fewer).  But you just don’t know, circumstances on the campaign trail can make us an issue.  Our goal is to make sure that the candidates are informed.  We must be vigilant!