Analyzing Activision's Defection from ESA

May 7, 2008 -

Game biz guru Keith Boesky offers his thoughts on last week's stunning news that Activision and Vivendi have pulled out of the ESA.

While the decision of Activision and several other publishers not to participate in this year's E3 got much of the attention of the gaming press, Boesky sees the ESA defections as the real issue - and we agree:
 

The ESA is this industry’s most important advocate. The organization’s impact as a lobbyist in Congress is effective, but not really tangible... We can however point directly to litigation efforts, which... beat, every legislative attempt to restrict or impair the sale of video games... If not for The ESA, video games would likely not be considered an expression of free speech...

...many are speculating about disappointment over [ESA CEO] Mike Gallagher... We can expect a less confrontational organization than the old ESA and again, it is too early to know whether it is a good thing. I don’t think Mike’s presence... drove the decision...


 

Activision... simply did not want to pay the fee. ESA membership fees are based on revenue. The soon to be largest publisher in the world will be paying more than anyone else, and it did not sound like fun. As far as the impact on lobbying... Activision... can pay a portion of the money they would otherwise pay in membership fees and target their own issues...

Moreover, we have yet to see whether this action is truly a withdrawal, and not a negotiating posture to revise the fee structure has yet to be seen. If it is a withdrawal, it could signal the end of The ESA as we know it.


Meanwhile, The Escapist offers its take:
 

[Activision's] walking away from a long-standing industry group like the ESA is not something done lightly... In light of the news that other industry majors are also dropping out of E3, it leaves the impression that the ESA is standing on some rather shaky ground...


 

An imploded ESA... leaves the industry without any form of organized political influence in Washington. With anti-videogame hysteria swirling around releases like Grand Theft Auto IV and Bully while the general public is subjected to a steady stream of misinformation... the lack of a unified voice speaking for the industry could be devastating.

 


Comments

Perhaps the dissatifaction among the ESA'smembership has less to do with the fee structure and more to do with a perception that the ESA's lobbying efforts aren't producing any meaningful results -- and, hence, are a waste of those fees. Haven't most all of the real victories against the anti-gaming forces been the result of legal battles in court? If I'm paying a lobbyist to block anti-gaming legislation and, because they've failed to do so, end up paying attorney fees to have the legislation overturned as unconstitutional, I may as well forego the losing battle and, instead, focus those resources on the winning battle. Simply put: fire the lobbyists and hire more lawyers.

[...] wrote an interesting post today onHere’s a quick excerptGame biz guru Keith Boesky offers his thoughts on last week’s stunning news that Activision and Vivendi have pulled out of the ESA. While the decision of Activision and several other publishers not to participate in this year’s E3 got much of the attention of the gaming press, Boesky sees the ESA defections as the real issue - and we agree: The ESA is this industry’s most important advocate. The organization’s impact as a lobbyist in Congress is effective, but not really tangible… We can however point directly to litigation efforts, which… beat, every legislative attempt to restrict or impair the sale of video games… If not for The ESA, video games would likely not be considered an expression of free speech… …many are speculating about disappointment over [ESA CEO] Mike Gallagher… We can expect a less confrontational organization than the old ESA and again, it is too early to know whether it is a good thing. […] [...]

I have a feeling the ESA have not been focused enough on key areas, particularly outside of the USA. From my point of view, the US constitution seems to be doing its job, upholding the first amendment rights of devs and publishers constantly under fire. Yet millions of dollars continue to be spent there.

However, outside the USA, these problems are constantly an issue. The UK is always in an uproar about something, as well as Germany and Australia. These are huge markets in which the ESA seems to be failing their members.

If the ESA is in fact imploding, I see it as the step toward a more global equivalent. I dont see the Entertainment Software community leaving themselves open without a voice.

Keith, ESA represents the interests of publishers in the US and does NOT operate abroad at all. Other countries have their own equivalents of ESA. That's not the issue.

There is no way there will ever be a global ESA. I may be wrong, but I have a vague recollection that some of the regulations lobbyists have to abide by law forbid participation in lobbying other Governments. I may be wrong on that though. Nevertheless the interests of the game industry are so different in different parts of the world that that alone will mean a global ESA will never succeed.

I don't think the ESA lobbies hard and loud enough.

98% of the game news I hear is negative.
2% is positive.

I do not hear the positive anywhere but blogs and game-related websites. I've yet to hear, read or see any advertising or responses from the ESA in the media. Maybe I'm missing it?

I think the escapist article is a bit paranoid and gives the ESA too much credit.

The ESA ought to spend a heck of a lot more on PR and organise trips for the media to visit developers, publishers and even gamers in order to perpetuate a more positive message.,

In other words, the ESA ought to be the mechanism by which the vg industry can go on a charm offensive. At the moment, I see them putting out fires but not necessarily building any bridges.

These companies leaving the ESA had better have some kind of plan to fight off the anti-game zealots. If not, this imploding of the ESA could be the death knell for creativity in games.

I still stand by my assessment that the games industry will ultimately loose the battle for creative freedom- it is too disogranized to fight back.

The ESA has failed on this simple fact:

You have NOT seen the United States gov't formally back the ESRB rating system. A real victory would be a public advisory on TV discussing the ESRB rating system AND where to get more info from the website just as we already have for cigarettes, drugs, alcohol, and firearms.

Right now I firmly believe that the ECA will accomplish this long before the ESA does.

Before someone smacks me upside the the head verbally with the "ESA represents game publishers" I'm very aware of that. However, the ESA failed when they did not involve US the game purchasing consumers in their equation. You can't protect an industry by only protecting those who produce the product. You have to protect the entire system which includes the consumer.

With JT going on and ON about age verification they should have addressed that. We have been right that a credit card sale is ok as age verification, but as a goodwill gesture ESA could have EASILY allowed people to sign up online for an ESRB age verification ID card. Make it a club for all ages. Throw in the symbols on the card that the kid is old enough for. This isn't hard. Then tell the parents and get them to have their kids sign up. Give advertisers the opportunity to have a Master Chief card or the Cloud card or GTA logo or whatever.

*sigh* What I'm describing is the EXACT problem. Gamers shouldn't have to protect the industry. EA and game publishers under the umbrella of the ESA SHOULD be protecting and organizing the industry.

What difference will it make for these companies withdrawing from the ESA anyway? The way I see it, they'll save more money and with that money saved up they'll be able to actually do something that the ESA is supposed to be doing for them: defending them.

Beyond the stories I read here at GamePolitics I've never heard of the ESA or any of their accomplishments. If these companies are spending money on something that is meant to protect their interests but isn't then they're better off just hiring lawyers to do that very thing for them and actually, oh I don't know, get results. But hey... this is just a rant from someone who's really never heard of this organization before coming to GP.

@ Jeff

You know, I never heard of them before coming here either. If their income is a percentage of revenue from the publishers, I'd presume they have a pretty large revenue stream.

Assuming such, it isn't a far-fetched assumption to think I'd have seen/heard ANYTHING from them. I read myriad gaming magazines, websites and even a few RSS feeds from sites I don't visit often. Until GP, ESA might as well have been the Elephant Savers Association.

Save the elephants.

Maybe it's like a family reunion, and the wealthiest member of the family always has to host the thing, and everything's going good...weenies are roasted, kids in the pool...dogs lazing in the sun...and then drunk uncle Take 2 shows up with his pitbull GTA and all hell breaks loose. Maybe Activision is tired of the whole family being hauled off to jail for disturbing the peace because uncle Take 2 can't act like a civilized person for more than 5 minutes.

Oh sure, he was in rehab for a few days and played a bunch of ping-pong. But that didn't last...oh no. Now the porch is on fire, little Sissy has been touched inappriopriately, Activision's wife is crying and threatening divorce, and the cops think it's all Activision's fault.

And no one got any ice cream...snifff.

Activision Shrugged.

@Vinzent:

You raise a good point. On some levels it kinda don't make much sense for Activision to give the ESA a chunk of their Guitar Hero profits so the ESA can spend that money defending T2's GTA series.

Of course, there's always the "united we stand, divided we fall," "we're all in the same boat," "today it's me, tomorrow it's you" counter-arguments. But, nevertheless, the economics of your point do make sense (at least from Activision's perspective).

Vinzent

Wow. You hit a good nail there. Take some (not forcibly) a company's profit and use them for the benefit of other companies.

Damn, that's like capitalist socialism. I think my head will now explode.

Again, ESA=NO BALLS!

Activision’s/Blizzard’s decision is equivalent to someone hiring an overpriced bodyguard (ESA). The bodyguard is hired for the express purpose of protection and in this case A/B’s bodyguard has woefully underdelivered in this regard. Their decision to “fire” this bodyguard is a good decision on their part because it means a) money isn’t going to waste on a pussy bodyguard, and b) should the need arise they can just hire some cheap thugs off the street (lawyers) to bash the crap out of the bully who’s been picking on them.

Geez, it's like running a Guild in WoW. If there are problems, people seem to /gquit like rats leaving a sinking ship rather than helping to fix it. If companies are going to quit the ESA, shouldn't they have a place to land first?

Mjnam, the problem is that, like the guild in WoW, they are powerless to fix it and those running the guild are either blind to the problem or unwilling to fix it. Sometimes the best way to vote is with your feet. Unlike a WoW guild, Activision doesn't need a place to land as they can solo what requires a raid team. The ESA doesn't do anything that they can't do for themselves and given that the ESA isn't doing what they should be doing it's something they have been doing for themselves as far as Activision is concerned. Rather than carry the weight of the ESA and still have to do their own work, Activision Shrugged.

The ESA is also responsible for E3, which was run into the ground at flank speed. Perhaps Activision doesn't feel like throwing its money into an organization that destroyed what was previously the most successful trade show of its kind.

The biggest complaint from gamers lately seems to be the lack of voice calling against all the misinformation regarding games and gamers by these uninformed politicians.
If the ESA hasn't done a very good job (jds' post above says the same ) then perhaps this will bring about a new forum for the Gaming Community and Creators / Industry to start letting its voice be heard.

Stand up for your medium before its taken from you.

Perhaps they felt it simply wasn't necessary. Activision and Vivendi haven't made any controversial games lately, so it's possible that they felt that it wasn't worth paying the largest fees of any ESA member when they don't really benefit all that much from the ESA's lobbying. Neither one's released all that many violent videogames over the last couple of years, neither one has has been criticized by the media or by politicians for the major violent videogames they have been responsible for, and both companies' biggest games are completely family-safe. They don't really need lobbying right now, because their Guitar Hero and World of Warcraft revenues wouldn't be hurt even if M-rated games were banned completely. Thus they were essentially paying a fee for the purposes of defending OTHER companies, and on top of that they were going to be paying the now significantly increased fee to an organization whose new leader they consider to be significantly less effective.

In other words, they felt this wasn't worth it. And, honestly, I think it'd be interesting to see what happens if the ESA collapses. Currently, every member of the ESA foots the bill for repairing relations between videogame companies and politicians when one company (usually Rockstar) tries to push the envelope and stir up controversy. If the ESA collapses, though, each company gets to target their lobbying toward their own interests, and companies who don't really do violent videogames (such as Nintendo) won't be stuck helping Rockstar clean up their latest mess.
 
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