As the president of the Entertainment Software Association, it is Michael Gallagher's job to worry about how the government views and deals with the gaming industry. But with a global economy in crisis and President-elect Barack Obama ready to take the highest office in US government from George W. Bush, the attention of Washington, DC, lawmakers is understandably divided.
Gallagher recently took time out to answer GameSpot's questions about how the roller-coaster ride of historic news is affecting the gaming industry trade group. He also addressed the pending appeal of California's violent game-restriction law, the re-expansion of the Electronic Entertainment Expo, and attendee apathy to E3 2008's keynote from Texas Governor Rick Perry.
GameSpot: Will having Barack Obama in the White House and increased Democratic control of the House and Senate make the ESA's mission any easier or more difficult?
Michael Gallagher: First, the ESA looks forward to working with President-elect Obama and his new administration as well as the 56 new members of Congress and the other new leaders in states across the nation. Many of these new officials are younger and likely grew up with computer and video games. Therefore, they are better positioned to understand our diverse industry and its many positive contributions.
The video game industry is a good news story for our nation and its economy. In a time of foreclosures, job losses, and financial uncertainty, our industry is a much-needed bright spot. In spite of the current economic woes, sales of our products our increasing; we are a growing source of employment in states across the nation; and we are making large contributions to state and federal tax bases. We are also working with academia to ensure that our young people have the math, science, and technology training needed to compete in this 21st century global economy.
In addition, today's games are enjoyed by more Americans than ever, as we have more gamers than nongamers in the population. At the same time, games are now being used for more than entertainment. Educators, health professionals, corporations, and issue advocates are all harnessing the power of games to further their efforts.
While there will always be controversies, many of our key issues--from encouraging and protecting creativity and innovation while educating and empowering parents--enjoy broad bipartisan support. As a result we feel our industry is well-positioned to succeed in this new political climate. With the powerful political winds of innovation, job growth, and broad-based support at our backs, we are looking forward to working with President-elect Obama and the other new leaders.
GS: A slight dip in September aside, US retailers have been posting record sales for the year. Despite that, we've seen an abundance of studio closures and publisher cutbacks, most recently with EA's plan to cut 6 percent of its workforce and THQ closing five studios and making layoffs at two more. If the overall industry is doing so well, why are so many developers suffering so much?
MG: Those questions on our individual members are best directed to the companies themselves. But, on the whole, our industry is experiencing a period of strong growth, in spite of this economic downturn. According to NPD's October numbers, this year's sales are up 30 percent over 2007, which is amazing in the current economic climate. The data shows we're ahead not only in the traditional areas, but according to PriceWaterhouseCoopers, we can expect major growth in new sectors such as broadband, mobile gaming, and advertising. These statistics all point to a positive outlook as we go into the holiday shopping season a time when more than 50 percent of games are purchased.
GS: Assembly bill 1179 is under appeal in California right now. What do you think the chances are that this will go to the Supreme Court? Do you want the matter to be resolved by the Supreme Court once and for all, or would you rather stomp out these legislative fires in lower courts one at a time?
MG: We are hopeful that the Ninth Circuit will follow the unbroken line of cases rejecting efforts at these sorts of government restrictions as unconstitutional. Twelve courts have reviewed this issue in the past six years and each time found laws restricting the sale of games unconstitutional. Furthermore, these anti-video game bills, which seek to circumvent the First Amendment, ultimately cost taxpayers millions in legal fees.
Rather than continuing legal challenges--be it California or other states--we feel the money spent in fighting these legal challenges would be better used educating parents about the ESRB ratings system and the numerous resources available to them to make wise decisions about the type of games appropriate for their children.
GS: Do you think the amount of gaming-related legislation is going to trend up or down in the coming years?
MG: We never know for sure what the coming legislative season will bring at the federal, state, or local levels, but we are doing all we can now to prepare for it. The ESA remains ready to stand up and defend the entertainment software industry and gamers, no matter what the legislative trends might be. But, we need the support of our active consumers to achieve our goals.
Our grassroots action network, the Video Game Voters Network (VGVN), had great success this year, making thousands of contacts with legislators. For example, when restrictive legislation in New York, Mississippi, and Arizona was under consideration and throughout the presidential campaign the VGVN made the voices of gamers heard. However, there is much more to be done.
We need more gamers and members of the entertainment software industry to join the VGVN and help us in this fight next year and beyond. We urge anyone who wants to join us and defend video games to sign up at http://videogamevoters.org.
GS: Was the ESA board of directors unanimous in the decision to revert to the E3 of old? Were there ESA members who still found the smaller E3 to suit their needs best?
MG: ESA and its board are 100 percent committed to the new format that is more reflective of the growth, innovation, and excitement of our industry. It's going to be a great event.
GS: Do you want people to come away saying E3 2009 was exactly like E3 2006? Somewhere in between the big shows and the small shows? Bigger than the biggest shows?
MG: We'd like people to look at 2009 E3 Expo apart from E3s of the past, including 2006. Each year is different and we learn more each time from the feedback we receive from attendees and exhibitors. We feel that the 2009 E3 will be more reflective of the current state of our industry and capture the creativity, excitement and innovation going on in computer and video games.
GS: What will keep E3 2009 from having all the same irritations and negative aspects people complained about with E3 2006?
MG: The ESA has run big E3 Expos and smaller E3 Summits. The benefit of doing both is that we were able to learn from each and take the best practices to benefit E3 2009. We've carefully considered the feedback we received from participants in the past and feel we have measures in place to address their concerns and achieve the right balance for the 2009 expo. Again, it's going to be a great show.
GS: Can we expect the basic format of the show to stay stable for a while, or could participant reaction cause the show to be resized or moved once more for 2010, 2011, and so on?
MG: Every year the show is going to change somewhat based on the qualitative and quantitative surveys we conduct. Right now we're focused on making the 2009 event a success and keeping it reflective of the robust and cutting age industry that entertainment software is today.
GS: Will the fully fleshed-out E3 conference program from 2006 and earlier be making a return?
MG: More information about the details of the 2009 E3 Expo will be available in the coming weeks at www.e3expo.com.
GS: At last year's E3, Governor Perry's keynote and your annual address drew shockingly few people. Why do you think there wasn't more enthusiasm for the presentations, and what does that say about the industry?
MG: Admittedly, the lack of attendance was indicative that too few people were at the show in general. Not only did the Governor deserve a bigger audience for his terrific endorsement of the industry, but the industry deserved it as well. Governor Perry is the highest-ranking politician who has openly endorsed our industry. He has engaged in a robust effort to support and grow the entertainment software industry in Texas and we thank him for that.
But again, we're focused on making sure that the 2009 E3 Expo is a win not only for the ESA, but for the industry. Without hyperbole, E3 is the one time and event in North America that our industry takes center stage and the world looks to us to see what is the latest and most compelling in interactive entertainment.