ESA pres Doug Lowenstein opens E3

LOS ANGELES--With just a couple of hours to go before the opening of the E3 show floor, and with much of the show floor operating with limited electrical power, Entertainment Software Association President Doug Lowenstein likely had other concerns on his mind as he took the podium to give his official media greeting.

"I want to welcome you here to the 11th annual E3 trade show, our ninth year here in Atlanta..."

A chorus of laughter and a quick correction later, the ice was broken and Lowenstein took the potential crisis in stride.

"I'm so excited to be here. I'm particularly excited because this is the first year we've ever tried to do E3 without power. It's going to be great."

Moving on to business, Lowenstein compared the gaming and film industries for the first of many times in his speech, and commented on the increasingly common claims that the video game industry is bigger than Hollywood.

"Let me set the record straight. It's simply not true," Lowenstein said. "We like to say it. It feels good to say it, but it's not true yet."

While game hardware and software sales together exceed the motion-picture box-office figures, Lowenstein pointed out that such a comparison doesn't factor in the sales of DVDs and VCRs and rental and television revenue. When taking everything into account, Lowenstein said the actual breakdown shows film as a roughly $45 billion industry, with gaming trailing behind at $28 billion.

"That's not too shabby for an industry that's just 30 years old," Lowenstein said. "The outlook clearly is for continued growth, especially if piracy can be cracked, thus opening new markets in places like China, Russia, and South America.

"I gave a version of this talk yesterday, and some people said it sounded like I was putting down the industry instead of being a cheerleader for it. ... Rather than putting down the game industry, the point of my earlier comments was to inject a note of reality into the discussion of where video games fit in our entertainment pantheon today and to create a context for what I really want to discuss, which is 'What will it take for the video game industry to be as big or bigger than the film industry in the decades ahead.'"

Lowenstein went on to list six issues that need to be addressed for that to happen, the first of which was to broaden the game audience by making more games with mass-market appeal.

Despite oft-touted statistics that show that 62 percent of gamers are 18 or older and that 43 percent of gamers are women, Lowenstein acknowledges that these nontraditional market segments are more casual gamers and that most game publishers generally don't cater to them. Lowenstein pointed out the tremendous profitability to be found by appealing to nontraditional markets with another comparison to the film industry, this time to The Passion of the Christ.

"This isn't an appeal to make religious games per se," Lowenstein said, "though I think that would be welcome. I mention Passion of the Christ as an example of the powerful market-expanding potential inherent in making games for less-traditional audiences than we're accustomed to."

Lowenstein also called for publishers to make more games that were socially and morally relevant, as well as a departure from the mind-set that the only path to making an industry blockbuster like Grand Theft Auto: San Andreas or Halo 2 is to start with an M-rated title.

The second thing Lowenstein said needed to happen was that the industry needs to produce more-compelling game experiences with more emotional impact.

"We need games with better stories, more interesting and complex characters, games that keep you up in the middle of the night wrestling with whether you made the right ethical or moral choices, games that stay with you when you're done with them," Lowenstein said.

"We cannot let the lure of onrushing technology blind us to the essence of what makes games great entertainment," Lowenstein warned. "Great entertainment, whether books, films, or games, must engage us on some emotional level."

Lowenstein's third point was that games need to be more accessible and easier to play. In addition to simpler gameplay concepts, Lowenstein proposed moving away from gameplay models built on frustration and repetition and suggested releasing simpler, shorter games at lower price points.

"Of course, part of the problem is that the inbred game culture itself will look down its nose at such games," Lowenstein said. "Game reviewers...will likely abhor such offerings as limited, simple, or shallow. But that's the point. We need games that are limited, simple, and shallow, just like we need movies that don't tax our intellect and psyche but do provide a few hours of forgettable pleasure."

Next, Lowenstein called for new financial models that provided financing for game development beyond the traditional publisher model that dominates the industry today. The problem with the current model is that the investments required by the publisher tend to make them fund mostly sequels and licensed fare.

Lowenstein specifically pointed out that publishers do still fund breakthrough games, but he said that ideally more risky and potentially innovative games would find funding somehow.

The fifth factor in the game industry's continued growth would be continued support of burgeoning platforms like online and mobile gaming, Lowenstein said. He specifically made a point of the explosive growth of the entertainment industry in China and how the online and mobile gaming markets are better suited to thrive in such a piracy-rich environment than traditional hard-goods industries like movies and music. "Ours is the only entertainment sector even capable right now of capitalizing on this trend in China," Lowenstein said.

The final key point in Lowenstein's presentation was that the industry needs to overcome cultural resistance and fear that lie at the heart of efforts to regulate game sales to minors.

"All of the proposals to ban game sales are unjustified, unnecessary, unconstitutional, and, ultimately, most importantly, they're ineffective," Lowenstein said. "They will never be enacted, and they won't do a single thing to help a single parent."

Even so, Lowenstein said the industry disregards the concerns of the people supporting this legislation at its own risk.

"They are the moms and dads who buy our games and increasingly play them," Lowenstein pointed out. "Disrespecting their concerns is dangerous indeed."

To that end, Lowenstein called on the industry to take a larger responsibility for shaping the quality and values of our culture and weigh the benefits of achieving a desired artistic vision against the negatives of pushing the envelope with questionable content.

Taking a longer view, Lowenstein acknowledged that complete cultural acceptance of gaming will not happen overnight.

"In the end, culture cred will come as the video game generation itself grows into positions of power and influence over politics and culture, as today's GTA fans become tomorrow's senators and editors."