D.I.C.E. 08: Games industry has become mainstream
According to Michael Gallagher, CEO and president of the ESA, the videogame industry has become mainstream
According to Michael Gallagher, CEO and president of the ESA, the videogame industry has become mainstream.
"In little more than a generation since Pong, our industry has arrived," he told the D.I.C.E. Summit 2008 audience.
"Videogames are an integral part of the way Americans work, live and play. As such, our industry has become a powerhouse."
The videogame industry is one of the fastest growing industries in the US, whose growth has outpaced the overall pace of the US economy in its share of GDP.
Gallagher quoted statistics of 8.5 billion in US software sales last year, up 40 per cent from the prior year. That represents one game sold every 9 seconds of every day in 2007.
The 13.4 million handheld game systems sold last year substantially exceeds the iPhone.
"Our industry is at the forefront of handheld entertainment."
First day sales of Halo 3 eclipsed the opening weekend sales of Spider-man 3 and the first day sales of the most recent Harry Potter book. In short, the videogame industry is a force to be reckoned with.
Yet, according to Gallagher, the industry has not done all it can to achieve its full potential.
"Even with this huge success and other titles like [Halo 3] in 2007, we must strive to reach more than the magic million or the blockbuster five million," he said.
"With 110 million households in US, our greatest accomplishments must reach more than 5 per cent of the population."
The movement of the industry has left behind pockets of potential growth.
"In the fractured political world, success cannot be achieved only through the support of one segment of the population," he explained.
"That is also true in business. That is what we did in 2007. We have maintained the loyalty and support of our base, but extended to new demographics to an extent hardly imaginable a few years ago."
He used examples of the senior citizen throwing strikes at Wii Bowling in a nursing home or the middle-aged accountant rocking out to Rock Band as examples of gamers.
"It may be an exaggeration today to say that everyone is a gamer, but the way things are going, it's not much of an exaggeration tomorrow."
Gallagher recommended several steps that the industry should take to "close the gaps."
"While we must not abandon our traditions, we should move to expand upon them," he said.
The industry needs to remember its base even as it welcomes new gamers.
"Our industry is a multiplex. We need to reflect that to the American people so that we can take advantage of all of the marketing opportunities in front of us."
Just as the VCR and Jane Fonda workout tapes inspired an older generation of women to exercise, Gallagher thinks that we can make videogames a key component of working out for the younger generation.
Already, more than 1,600 schools use Dance Dance Revolution as part of their Physical Education curriculum.
It must foster entertainment relationships - not just with movies and television, but as Rock Band and Guitar Hero have shown, with the music industry.
While expanding marketing, the industry must also engage parents, advance its policies and allow its voices to be heard.
"Even though videogames are fundamentally about play, there are serious applications that are important and impactful on elements of our society."
Gallagher noted that videogames are used by some companies to train employees and named the Stanford University distributed computing network — the largest in the world — as an example of an important application from the industry.
"We need to improve how we talk about our business."
Parents, he said, are partners in the growth of the industry. Gallagher pointed out that the major platforms all contain parental controls, and called the ESRB the "gold standard" of disclosure organizations for consumers of media.
"Those things are very important. They put our industry in a position to thrive among parents."
Finally, Gallagher urged the audience to get involved with the Video Game Voters Network — an organisation established to defend the rights of game enthusiasts when they are threatened by state or federal governments.
"Videogames are a protected form of speech under the 1st Amendment of the Constitution," he said. "This has been decided nine times, but states don't seem to get it."
Along with 1st Amendment challenges, he sees the need to stop unfair taxes, promote growth incentives and defend IP rights.
"We need to create an environment, an ecosystem that will lead to success in future years."