FTC gives games industry mixed report card

The Federal Trade Commission yesterday released its fourth report on the marketing of violent movies, music, and games to children. The report noted important successes of game industry's advertisement standards, called AdCode, but also pointed out several areas that the FTC feels need improvement. AdCode is designed by the Entertainment Software Rating Board (ESRB), the industry's self-regulating body.

The Commission found "substantial, but not universal, compliance" with the game industry's advertising regulations. According to the current ESRB standards, companies cannot place ads for M-rated games where children under 17 make up a certain percentage of the audience--35 percent for television and 45 percent for print. However, some shows--the report named Total Request Live as an example--continue to run ads for M-rated games.

As part of the report, the FTC performed an undercover survey of teens shopping for games, determining that 69 percent of unaccompanied shoppers under 17 were able to buy an M-rated game at a retail outlet. The success rate for stores with programs for restricting sales to those under 17 was only slightly lower, at 55 percent. However, the report notes that the overall statistic has been dropping, from 78 percent in 2001 and 85 percent in 2000.

The FTC also took issue with the advertising of T-rated games. Unlike for M-rated games, AdCode does not restrict the advertising of T-rated games by a certain percentage. Criticizing the ESRB for having no definitive yardstick for TV programs and publications that have a largely preteen audience, the report noted that many advertisements for T-rated games appeared in Nintendo Power, 42 percent of whose readers are under 13.

On a more positive note, the report generally praises the prominent placement of ESRB rating labels in advertising and game packaging. While the FTC would like to see some additions, such as content descriptions in television ads, the report states that "the game industry’s rating disclosure requirements go far to ensure that parents have access to rating information when considering product purchases."

In response, the Entertainment Software Association, creators of the ESRB, issued a largely sunny statement from President Doug Lowenstein. After pointing out the positives of the FTC report, Lowenstein disagrees with the report's constant recommendations to restrict ads based on the "popularity" of a show or magazine with a certain audience, stating that "a popularity standard is impossibly vague and impractical." Lowenstein asserts that the current standards are both "reasonable and effective."