Q&A: ESA president Michael Gallagher

The head of the gaming industry trade group talks to GameSpot about President-elect Obama, the economy, the new E3, and the near-vacant keynote from last year's show.

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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.

ESA president Michael Gallagher.

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.

Discussion

27 comments
jer_1
jer_1

My god, people still really seem to believe that we are getting something worthwhile out of sending young people off to die in foreign countries. There is nothing to be won there, killing people in Iraq only provides fuel to the fire. We are making "terrorists" faster than we can actually kill them. It's all about the profit margin of the military industrial complex, which just so happens to be in a skyrocketting position. We will never win in a war that is designed to never be won. The "tiny" trillion+ dollars we have lost to this war could have really helped this country and, if used properly, could have prevented the US from slipping so deep into the ression which we are now currently stuck in. If nothing else it could have provided massive infrastructure funding, which we need very badly in many circumstances. Good luck with the never ending stream of "blowback" we will be experiencing for years to come, we really should have been listening to Ron Paul from the get-go, he is spot on ONCE AGAIN.

KOSMOSEngineer
KOSMOSEngineer

"580,000,000,000 dollars is not very cheap." No, but out of $13,300,000,000,000 it is (that's GDP). Frankly I'd prefer my share of the taxes that go into social security ($544,000,000,000 in ONE year. Your cost of the war is over seven). I'm not arguing for the war, I'm just saying, when you're talking about the United States economy, $580 billion over seven years really isn't all that much.

Merl57
Merl57

I respect this man for everything he said he is logical and uses facts to back up his points unlike people who blame video games for everything

KSigMTSU
KSigMTSU

Understandibly, I can see how you would want to mislead people and say the iraq war was cheap, but 580,000,000,000 dollars is not very cheap. Thats about 1/20th of our total national debt right now. Seeing how approximately 305,000,000 people live in the united states, thats a significant amount of money. Approximately 2000 dollars each. Thats how cheap it's been. Don't care about your gdp figures, how you try to justify that as cheap, it wasn't cheap, we got nothing in return for it, and we did it based on a huge sack of lies. If you want to step up and send me the 2000 dollars for my share of paying for the war you think was cheap, I can send you my address. Don't forget my wifes share, and all of my kids share. That 305,000,000 people counts a ton that don't pay taxes. I can bet on paying, myself, probably 15 grand because President Bush was a bonehead. I could use a new car. Too bad Bush picked the Iraq war for me instead.

lostn
lostn

This guy dodged a lot of questions about E3 09. I don't think he gave a straight answer to any of those questions.

buffdaddy69
buffdaddy69

"afrosud12 Posted Nov 21, 2008 4:32 pm PT agree with clqtte. and if we do pay taxes for wars at least give out men some body armor and post traumatic stress treatment so they can be fine after the war." We do. It's called the The United States Department of Veterans Affairs. They take care of the Disabled Veterans and The Veterans who suffer from post tramatic-stress syndrome, by offering them the services on their lot (Being able to go to them to get you're needs, like food, cloths and designer cloths ect, at discounted prices) They offer them full medical support (My father had to get half of his foot amputated due to the hospitals not doing there jobs, so the VA, sent him to an actual hospital that actually takes care of people, paid for it and they are now helping him with a lawsuit against the first hospital), Plus the VA offers said Veterans kids with the ability to go to a college or trade school and fully pay for it until the child turns 24. Plus the VA gives the Veteran a check at the end of every month ranging from 500 dollars to 1600 a month depending on age and how much of you're benefits you actually have. The thing is, Due to there being so many War Heros and Veterans, there is a list and you will actually have to wait a bit and get the full 100% of you're VA Benifits to be able to do any of the stuff i said.

endocrine
endocrine

To all you people complaining about taxes being spent on war: around 1% of our gdp is being spent on Iraq. This number is less that The Spanish-American War (which goes to show you how little impact it has had on our economy). Learn the facts before you complain because the Iraq war costs this country next to no money, and the only thing it costs is the lives of brave men and women that defend your right to be ignorant of political issues.

endocrine
endocrine

This guy is a little misleading. Yes the game industry is making record profits, but they are laying off many people. The problem is that while game companies are making more money today than last year, their operating expenses have also gone up greatly. Last quarter EA made record profits, yet they still lost money over all. I'm sorry but the game industry is not currently in a healthy state, which is why the excess is being trimmed by many major companies. While you will see the game industry grow next year, the workforce may not reflect it (just like it did the past quarter of this year).

Lord__Darkstorn
Lord__Darkstorn

Good. It looks like Obama will be doing video games some good.

Cheddarchet
Cheddarchet

"-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." That would be nice.

Langway
Langway

Wow. That whole thing read like a pre-recorded response, to questions Gallager already knew. Boring.

The_Corinthian
The_Corinthian

Sorry but it's not my job to educate someone's stupid kids. I don't know where people get off thinking that it's the government's job to educate their kids when they allow those same kids to run roughshod over teachers and administrators with the support of their parents. You can pour multi-trillions into education and all you'll get is a bunch of fat unions and stupid kids puking out the other side. Until the lock on education is broken, I think I'd like to cut education to the quick. I can assure you if you do , you'll have the same amount of morons still being passed on through the system.

Sarcerok
Sarcerok

E3 of old had literally thousands of vendors. Recently this number seems to have fallen far short of 100. Trying to step on independent developers to protect the "old guard" stiffles innovation and hurts the industry as a whole. Trying the protect the market share of the largest companies might seem logical from an egocentric point of view. What has not been factored in is that many vendors and others use E3 as an opportunity to share ideas in a casual environment. This sharing causes an acceleration of technology and innovation that helps everyone in the industry in the long run.

djmillard2
djmillard2

the industries that won't be hurt in economic times: alchohol, nicotine, caffeine, illegal drugs, VIDEO GAMES. see a trend?

Saije
Saije

Well they do have body armor, though they could probably have better body armor. In this age of super-tech we should have some kind of bad combat exo-skeleton by now. That would be sweet.

afrosud12
afrosud12

agree with clqtte. and if we do pay taxes for wars at least give out men some body armor and post traumatic stress treatment so they can be fine after the war.

punisher619
punisher619

Hey at least we know where to go to find out info on E3. lol

clqtte
clqtte

We do need to pour money for math,science,research,technology and education and create jobs,not stupid wars like Bush did it.....I never work and pay tax for wars......

ezacharyk
ezacharyk

I have a hard time figuring out why no one asks this guy about the obvious conflict of interest in the ESA owning a Consumer Group. Would the ESA really let the VGVN have a serious campaign against something that conflicts with publisher interests such as the DMCA or the PRO-IP Act?

Amir29
Amir29

For those who don't want to read that whole thing, read this instead: GS: How is the current economical situation effecting the gaming industry? MG: It's not. We show a large growth in sales through out. Though some publishers are failing, the gaming industry as a whole is doing better year over year. GS: We want to pester you with a ton of questions about E3 in 2009. Is that OK? MG: Sure, but don't expect any details. ... And there you have it. LOL!!!

gigarisch
gigarisch

You've got that right wreck2002. Gallagher does not answer the questions, he merely responds to them that way that any politician would do. I guess the gaming industry needs these types as well.

Trajectorize
Trajectorize

Actually I thought it was a pretty interesting interview. GS asked some good questions and some of the responses were promising.

SonyMarksman70
SonyMarksman70

[This message was deleted at the request of the original poster]

wreck2002
wreck2002

Can u have a longer article to say basically nothing?