Game Biz Opposes Utah Bill

March 4, 2009 -

The video game industry is beginning to respond - and not in a positive way - to yesterday's passage of HB353, a Jack Thompson-conceived bill, by the Utah House of Representatives.

As GamePolitics reported late yesterday, the Entertainment Merchants Association, which represents a large bloc of game retailers, remains opposed to the measure.

That news seemed to contradict bill sponsor Rep. Mike Morley's assertion during yesterday's hearing that amendments to the proposal had caused "retailers" to drop their opposition. However, Morley was apparently referring to the more general-purpose Utah Retail Merchants Association (more on that below).

The Escapist heard from Dan Hewitt of game publishers' trade group the ESA:

[HB 353 is] a solution in search of a problem. The fact is, Utah has a 94% [retailer ratings] enforcement rate when it comes to video games. Also, Utah state legislators are unfairly targeting video games. Representative Morley's anti-video game bill would expose game retailers to frivolous lawsuits if the store promotes the ESRB rating system.

The perverse effect of this bill is that Utah retailers will stop promoting the ESRB rating system, which has been applauded by media watchdog groups like the National Institute on Media and the Family and the Federal Trade Commission. In short, this is a step back for parents and undercuts the positive work of the ESRB and others who promote the tools and resources available to parents.


ESA Lobbies for Broadband Deployment

March 3, 2009 -

The Entertainment Consumers Association (ECA) has been lobbying for Universal Broadband for some time. Now, game publishers' trade group the Entertainment Software Association (ESA) appears to be moving in that direction as well.

Congress Daily reports that ESA CEO Michael Gallagher sees affordable high-speed Internet access as "connective tissue" that member companies need to weather the widening recession.

It's not hard to see why. Modern gaming staples such as DLC and online multiplayer require fat pipes. Gallagher elaborated on the issue:

We're the only form of entertainment online that's interactive -- movies and music are linear. We're very pleased with the president's strong embracing of broadband deployment as a high value goal for our country.


The administration and Congress have a huge amount to contribute to make sure that resources are available and make sure that rules of the road encourage investment and give companies and customers access to it at reasonable prices and terms.

Gallagher also dished on piracy and legislative issues.

FULL DISCLOSURE DEPT: The Entertainment Consumers Association is the parent company of GamePolitics.


Nice Work If You Can Get It: ESA, ESRB Heads Make the Big Bucks

February 27, 2009 -

Despite a bumpy two-year run which has seen a 25% membership drop and a disastrous 2008 E3, Michael Gallagher, CEO of the Entertainment Software Association, is doing okay for himself.

IRS records filed by the ESA indicate that Gallagher was paid $789,929 for the reporting period of April 1, 2007 to March 31, 2008. Since Gallagher didn't take over at the ESA until late May of 2007, or almost two months into the reporting period, we can probably assume that his annual salary was actually a bit higher. Additionally, Gallagher collected $19,015 in benefits.

By way of comparison, Gallagher's predecessor, Doug Lowenstein, earned $744,344 for the prior year, plus a benefits package valued at $96,616.

It's only fair to point out in Gallagher's defense that many of the conditions which led to a downsized E3 and drastically elevated membership fees were in place before he was hired.

On the same document the ESA reports the salary of ESRB President Patricia Vance as $535,397. It's apparent that the head of the video game industry's rating body has bounced back nicely from the 2005 Hot Coffee fiasco. Highlighted by a successful outreach program to parents and public service messages delivered in concert with various state-level political officials, the ESRB seems to be performing at peak efficiency.


Cory Doctorow Has a Brilliant Idea to Fix EULA Mess

February 26, 2009 -

Writing for UK newspaper The Guardian, author Cory Doctorow offers an eminently sensible fix for those confusing, consumer-unfriendly End User License Agreements:

Here's the world's shortest, fairest, and simplest licence agreement: "Don't violate copyright law." If I had my way, every digital download from the music in the iTunes and Amazon MP3 store, to the ebooks for the Kindle and Sony Reader, to the games for your Xbox, would bear this – and only this – as its licence agreement.

"Don't violate copyright law" has a lot going for it, but the best thing about it is what it signals to the purchaser, namely: "You are not about to get screwed."

Cory also finds irony in the approach which content rights-holder take on the copyright issue:

The copyright wars have produced some odd and funny outcomes, but I think the oddest was when the record industry began to campaign for more copyright education on the grounds that young people were growing up without the moral sensibility that they need to become functional members of society.

The same companies that spent decades telling lawmakers that they were explicitly not the guardians of the morality of the young – that they couldn't be held accountable for sex, drugs and rock'n'roll, for gangsta rap, for drug-fuelled dance-parties – did a complete reversal and began to beat their chests about the corrupting influence of downloading on the poor kiddies.

Ditto for the video game industry. As GamePolitics has reported in the past, game publishing lobby group ESA hopes to takes its anti-piracy "education" program into elementary schools.


ESA Hopes Bigger E3 Will Permit "Restructuring" of Inflated Membership Fees

February 26, 2009 -

Over the last year, video game publishers' lobbying group the Entertainment Software Association has lost a quarter of its members.  New financial data reported by Gamespot may shed some light on just why the defections have occurred.

Back in 2007 - at the demand of its member companies - the ESA scaled back its annual E3 show, reducing the number of attendees from more than 60,000 to around 5,000. Despite the downsized event pulling in nearly $15 million less than in 2006, the ESAʼs 2007 revenue dropped less then $1 million, thanks to hefty membership fee increases - 1700% hefty.
Dues collected for the year of the Santa Monica E3 (April 1, 2007 - March 31, 2008) rang up at $17.41 million; the prior year's total was $4.47 million.  The year before that, the ESAʼs total income from member fees was just over $1 million. 
Although NCsoft has gone on record that its decision not to renew its 2009 membership with the ESA was not financially motivated, itʼs a good bet that for some of the memcos (including financially-battered Midway), money was indeed a big factor.
For its part, the ESA told Gamasutra that it's revisiting its membership dues structure in addition to aiming for a bigger, better, and more profitable E3 2009.  Said ESA CEO Mike Gallagher (left):

The positive restructuring of the E3 Expo allowed us to revisit the ESAʼs dues structure.  It is our hope that this new model will make the ESA an attractive and accessible option for small and mid-sized publishers so we can more fully represent our industryʼs diversity.

-Reporting from San Diego, GamePolitics Correspondent Andrew Eisen


BREAKING - Appeals Court Terminates Gov. Schwarzenegger's CA Video Game Law

February 20, 2009 -

The 9th Circuit Court has affirmed a U.S. District Court decision which struck down California's 2005 violent video game law.

As GamePolitics reported last November, a three-judge panel of the 9th Circuit heard the state's appeal in Sacramento. In upholding the District Court's 2007 ruling, the 9th Circuit rejected several research studies presented by the states as failing to demonstrate a causal link between violent video game play and negative behavior:

Nearly all of the research is based on correlation, not evidence of causation, and most of the studies suffer from significant, admitted flaws in methodology.

The Court also rejected as unconstitutional a section of the law requiring retailers to label violent games with a four-inch square label with "18" printed on it.

Reactions to the ruling are beginning to come in. Jennifer Mercurio, Director of Government Affairs for the Entertainment Consumers Association, said:

We couldn’t be happier. Federal courts have found all nine legislative attempts to curtail the sale of violent video games invalid under the First Amendment, definitively showing that video games are protected speech, just like other content such as books, comic books, movies and music.

Bo Andersen, CEO of game retailers' group the Entertainment Merchants Association, said:

Retailers are committed to assisting parents in assuring that children do not purchase games that are not appropriate for their age. Independent surveys show that retailers are doing a very good job in this area, with an 80% enforcement rate, and retailers will continue to work to increase enforcement rates even further. The court has correctly noted that the state cannot simply dismiss these efforts.

I understand that some government officials will push for the state to ask the U.S. Supreme Court to review this decision. The state should not acquiesce in this demand, particularly in light of its budget difficulties. The state has already wasted too many tax dollars, at least $283,000 at last count, on this ill-advised, and ultimately doomed, attempt at state-sponsored nannyism.

ESA CEO Mike Gallagher called the ruling "a win for California's citizens."

With the 9th Circuit's rejection of the California video game law, the question now becomes whether Gov. Schwarzenegger will appeal the ruling to the U.S. Supreme Court.

FULL DISCLOSURE DEPT: The Entertainment Consumers Association is the parent company of GamePolitics.

ESA Mum on Midway Departure

February 20, 2009 -

We've asked three times, but the Entertainment Software Association apparently won't confirm - or even respond to - our inquires as to whether bankrupt Midway has relinquished its membership in the software publishers' lobbying group.

As GamePolitics reported earlier this week, Midway has recently been removed from a listing of member companies on the ESA website. On several past occasions such removal has preceded an ESA acknowledgement of a member's pullout.

The reason for the silence is unclear as we've had normal communications with the ESA on other topics this week. One knowledgeable source speculated that the ESA might be acting at Midway's request.

In any case, it is hard to fathom what the ESA - which has been doing a much better P.R. job in recent months - gains by not making a clean break with the information.

ESA Hires New Govt. Relations Head

February 18, 2009 -

Game publishers' lobbying group the Entertainment Software Association announced today that it has hired a new head of government relations (i.e., lobbying).

Jennifer Manner comes to the ESA by way of Skyterra Communications and the Federal Communications Commission, where she was senior counsel.

Manner replaces Ed Desmond, who exited the ESA for a post in the toy biz last September.

Interestingly, an ESA press release makes it a point to mention that Manner is a "long-time Democrat." We don't recall seeing a similar industry hiring announcement addressing an appointee's political affiliation.

Of Manner, former FCC Commissioner Kathleen Abernathy offered high praise:

Jennifer is an outstanding choice for this position. With her broad experience communicating effectively with multiple public and private sector stakeholders and tackling complex regulatory matters, the industry and the ESA will benefit from Jennifer’s leadership.


ESA Slams Western European Nations for P2P Piracy

February 17, 2009 -

Western Europe is a hotbed of P2P piracy, said the Entertainment Software Association in a press release earlier today.

The trade group, which represents the interests of U.S. video game publishers, included its findings as part of a report to the U.S. Trade Representative by the International Intellectual Property Alliance.

The ESA says that it studied P2P sharing of 13 popular game titles in December, and logged nearly 6.5 million illegal downloads. Italy was the leading offender, followed by Spain, France, Germany and Poland.

The ESA also indicated that it found "high demand" for console and handheld titles, which it says translates to "widespread availability of circumvention devices and game copiers in many leading markets."

Here's what the ESA had to say about Italy:

For a popular AAA racing title alone, Italy had close to 590,000 downloads... Telecom Italia’s networks were implicated in 11.6% of the completed downloads observed globally, making it the world’s most heavily utilized ISP in the course of the industry’s study... It was also found that with greater incidence of video game piracy through P2P networks, there appeared to be a corresponding and dramatic decrease in legitimate sales of entertainment software. Individual member company online monitoring confirms these trends.


The industry is also plagued by the easy availability online of circumvention devices, such as mod chips. This situation was exacerbated by a court decision in Bolzano, Italy, holding that mod chips were not illegal under Italian legislation implementing the EU Copyright Directive. Fortunately, the Supreme Court in 2006 reversed this court decision and found that circumvention devices are illegal under Italian law, but the damage was done and continues.


Video Game Biz Still Targeting Canada Over Mod Chips

February 17, 2009 -

Those pesky Canadians!

Copyright lobbying group the International Intellectual Property Association has once again called upon the U.S government to add neighboring Canada to a list of copyright-violating rogue nations, reports the Los Angeles Times.

The Entertainment Software Association, which lobbies on behalf of U.S. video game publishers, is an IIPA member. Indeed, much of the IIPA's angst with our friends to the north seems to revolve around Canada's more tolerant attitude toward mod chips. From the L.A. Times:

Specifically, [the IIPA is] asking the Obama administration to add Canada to the "Priority Watch List" alongside Mexico (hey, it's a NAFTA reunion!), Russia, China and other countries with a reputation for disregarding copyrights, patents and trademarks...

In particular, the IIPA wants Canada to do more to block the manufacture and sale of video game "mod" chips and other equipment to circumvent electronic locks; raise the statutory penalties for unauthorized copying, even when it's done for personal use; crack down on the manufacture and sale of bootlegged DVDs; and require ISPs to take down infringing material upon request, rather than simply passing a notice of infringement on to the customer responsible for it.

The Bush administration essentially blew off the IIPA's previous entreaties to target Canada. It's doubtful that the group will have any better luck with the Obama team.

Meanwhile, as we were preparing this story, the ESA dropped a press release on the topic with the obligatory doom-and-gloom piracy quote from CEO Mike Gallagher:

Piracy is the single greatest threat to the innovation, artistic commitment and technological advancements enjoyed by millions of consumers worldwide. Piracy is a job killer that the world economy cannot afford in these difficult economic times. Countries that skirt obligations to combat piracy need to understand the unacceptable damage they are facilitating —and those countries that invest  in protecting intellectual property rights and ensure that piracy is not tolerated at any level should be lauded.

The ESA also cited what it termed "alarmingly high volumes of illegal game downloads" on P2P networks BitTorrent and eDonkey.


Midway Says Adios to ESA?

February 17, 2009 -

Bankrupt game publisher Midway has apparently left the membership ranks of the Entertainment Software Association. The Washington, D.C.-based ESA represents the interests of U.S. game publishers.

GamePolitics notes that Midway, which filed for bankruptcy last week, has been removed from the list of member companies on the ESA's website. Such removal has preceded the ESA's official acknowledegment of memco departures in several recent cases.

The move probably speaks more to Midway's desperate financial straits than anything else. With Midway's exit, the ranks of the ESA have dropped to 20. At the beginning of 2008, 28 companies belonged to the organization.

We have asked the ESA for confirmation.


Are Booth Babes Returning to E3?

February 7, 2009 -

The Entertainment Software Association banned booth babes from E3 in 2006, but they may be returning to the game industry's big dance in 2009 as the ESA seeks to restore the expo's former glory.

In an interview with Danny Pena of GamerTag Radio, ESA exec Rich Taylor alludes to - but doesn't quite confirm - that booth babes will make a comeback.

Play the one-minute clip to hear Taylor's comments.


Guv Declares "Entertainment Software Day" in Texas

February 3, 2009 -

Gov. Rick Perry (R, at left) has proclaimed today "Entertainment Software Day" in Texas.

The declaration is apparently the first of its kind in the United States.

In addition, both chambers of the Texas legislature have passed resolutions recognizing the video game industry's contributions to the Lone Star State. Those resolutions were sponsored by State Sen. Bob Duell (R) and Rep. Dawnna Dukes (D), both of whom have worked on financial incentives for Texas game developers in the past.

The news comes by way of a press release from the Entertainment Software Association. The trade group which represents U.S. video game publishers enjoys a strong connection to Gov. Perry. GamePolitics readers will recall that the Guv delivered the keynote speech at E3 2008.

ESA CEO Mike Gallagher commented on the Texas-sized salute to the game biz:

The support of Governor Perry, Senator Duell and Representative Dukes for the entertainment software industry in Texas is an endorsement of the artistic and economic contributions our industry has made to the state.

These lawmakers are helping grow our industry as we work to create new jobs for Texans; boost the state’s economy; and help discover new ways computer and video games can improve the ways Americans live, work and play.

According to the ESA, Texas's game industry adds $395 million to the state's economy.

Activision Returns to E3

February 2, 2009 -

Activision's back!

The Entertainment Software Association has issued a press release which offers new details on E3 2009. But the biggest news is that Activision, which was not an official exhibitor at E3 2008, will be on the show floor when E3 opens in June.

While Activision will be exhibiting at E3, it has not, apparently rejoined the ESA's membership ranks.

As for ESA, the game publishers' trade group seems to be improving its P.R. efforts.  E3 2009, for instance, has a great-looking new website and the ESA has also established an official E3 presence on both Facebook and Twitter,


Game Biz Sales Topped $22 Billion in 2008

January 28, 2009 -

While recent studio closures and layoffs have shown that the video game industry is far from recession-proof, game publishers still managed to post record-breaking sales numbers for 2008.

According to a press release issued by the Entertainment Software Association this morning, video game hardware and software sales exceeded $22 billion last year. That figure represents a 23% increase over 2007.

Nearly $12 billion of total industry revenues came from game software sales. The industry finished the year strong, with December sales topping the $5 billion mark.

ESA boss Mike Gallagher commented on the impressive revenue figures:

Even in difficult economic times, the video game industry continues to support our country’s local, state and national economies with record-breaking sales figures and rapid technological innovation.


Our industry’s exceptional creators, artists, and storytellers, coupled with a commitment to providing unparalleled entertainment, have fueled high-octane growth, turning video games into the most sought-after medium on the market today.

The ESA also broke down sales by ESRB rating:

  • E rating - 45.3%
  • E10+ rating - 12.1%
  • T rating - 26.7%
  • M rating - 15.9%

The sales data included in the ESA press release was compiled by the NPD Group.


ESA Lobbying Adds Up to $4 Million in 2008

January 27, 2009 -

The Entertainment Software Association spent a record amount on lobbying in 2008, according to a report by Gamasutra.

The trade organization, which represents the interests of U.S. video game publishers, spent $4,244,364 for the year, including $1,135,500 in the fourth quarter. That's roughly a 25% increase over 2007. So what issues was the ESA focused on? Gamasutra reports:

The ESA's filing cites activity in both chambers of Congress on broadband deployment, online gaming governance and immigration issues, and throughout Washington at the U.S. Trade Representative, Department of State, National Security Council Patent & Trademark Office and other agencies on trade regulation, anti-piracy and patent modernization.

Filings for the three firms retained by the ESA—Smith-Free Group, Jenner & Block, and Telemedia Policy Group—reveal that their efforts were focused almost exclusively on Congress towards matters concerning the regulation of games themselves and perception towards ESRB ratings.

Another filing reveals that the ESA added the services of the Monumental Policy Group -- whose existing clientele includes Microsoft, IBM and Sybase. Monumental's quarterly disclosure filing shows the firm lobbied Congress and U.S. Customs and Border Protection on trade and copyright matters.

The immigration issues mentioned by Gamasutra refer to the topic of H-1B visas for highly skilled foreign workers. A document obtained by GamePolitics doesn't specify which side of the issue the ESA was lobbying, but it's safe to assume they are in favor of H-1Bs.

Media Coalition Gets First Amendment Scholar as New Chair

January 8, 2009 -

The Media Coalition, a free speech defense trade group which numbers the Entertainment Software Association (game publishers) and Entertainment Merchants Association (game retailers) among its members, has a new chair.

As reported by Video Business, First Amendment scholar and author Chris Finan (left) will succeed the EMA's Sean Bersell at the reigns. Of the transition, Bersell commented:

I am extremely pleased that Chris Finan, who is incredibly knowledgeable about free speech issues and well respected, is assuming the chair of Media Coalition. The leadership and credibility he brings to our efforts will enhance our ability to counter government censorship of publications and entertainment.

Speaking about his new assignment, Finan said:

Media Coalition plays a critical role in protecting what the American people can see, read and hear.


ECA's Hal Halpin Expects ESA to Lose More Members in 2009

December 30, 2008 -

In a recent feature, Crispy Gamer named its Top 21 News Stories of 2008. Coming in at #16 was the  series of member defections which plagued game publishers' trade group the ESA.

Hal Halpin, president of the Entertainment Consumers Association, commented:

I’m not sure that there’s a lot more I can add to what has already been said about the defecting companies or their impact on the [ESA] apart from that I do believe it will continue. Things have fundamentally changed in the past few years and the recession’s impact on the industry is far from over…


That fact alone could drive one or two more publishers to leave, given the rising dues costs. Having a strong association representing the industry is important for us all, so I hope that things will change for them in ’09… perhaps with the newly restructured E3.

The ESA began 2008 with 28 member companies, but will end the year with just 21. Exiting were: Activision, Vivendi, LucasArts, id, Codemasters, Crave, and NCsoft.

FULL DISCLOSURE DEPT: The Entertainment Consumers Association is the parent company of GamePolitics.

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Video Game Biz Involved in Effort to Lobby Obama Transition Team

December 15, 2008 -

Barack Obama does not take office until January 20th, but the video game industry is already lobbying the President-elect, via an intermediary.

The game industry's issue, at this point, is copyright protection. Along with the likes of the RIAA (music biz) and MMPA (movie biz), video game publishers trade group the Entertainment Software Association belongs to an organization known as the International Intellectual Property Alliance. It is the IIPA which is doing the actual lobbying.

Toward that end, the IIPA has provided the Obama team with its list of Copyright Industry Global Challenges for 2008, and is believed to have met with them as well. For its part, the Obama team, in an effort at greater government transparency, has listed all outside lobbying efforts - including the IIPA's - at its remarkable website.

Among the game-related concerns cited in the document are:

  • Internet-based piracy
  • Optical disc piracy
  • End-user piracy
  • Cartridge-based video game piracy
  • Open access to foreign markets

GP: There's nothing new or especially egregious in the IIPA document - unlike the MPAA's separate effort to convince Obama to adopt IP enforcement measures which would essentially throw consumers' due process rights under a bus.

On C-SPAN, ESA's Gallagher Predicts New ESA Members

December 8, 2008 -

On the very same day GamePolitics broke the news that NCsoft had dropped its membership in the Entertainment Software Association, Mike Gallagher, CEO of the game publishers trade association, predicted that new, "exciting" member companies would join the ranks of the ESA.

Gallagher's comments came during an appearance on C-SPAN's The Communicators on Saturday.

Gallagher was interviewed by C-SPAN's Pedro Echevarria along with Mike Musgrove, who often writes about games for the Washington Post.

The half-hour program, which touched on a number of issues, is worth a look. Here are samples of Gallagher's comments:

How the ESA looks at the incoming Obama Administration:

If you look at President-elect Obama's technology platform, he specifically calls out protection of intellectual property overseas, but also protection of intellectual property at home. So, we're encouraged by what we see there. We also just had the PRO-IP act passed which places an intellectual property coordinator in the White House. So, we're very encouraged by that...

Whether the ESA will pursue RIAA-style IP enforcement tactics against consumers:

[Game cosnumers] see great value in paying the price points for the software that we make... We're in a far different position than music... Our companies have seen that threat coming and we've built some protections in. We also have a better value equation with our consumer and with our customer so we look to foster and grow that as our primary means of defeating piracy, making sure it's always worth it to buy the game, as opposed to burning it.

Whether industry self-regulation of its content rating system is working:

It's not me saying it, it's the Federal Trade Commission says it. In May they issued their report which was very strongly in favor of the industry. And then just recently, the National Institute on Media and the Family issued their annual assessment of the industry and gave the ESRB and retailers very high marks...

The future direction of ESA:

You'll continue to see  a strong focus on federal and state policy... In the states, we're seeing tremendous opportunity. Gov. Rick Perry from Texas came to E3, our trade show... he came with the idea of attracting more of our [business]. Georgia, Louisiana, Michigan passed tax incentives to attract our industry...

Gallagher's comments on ESA member companies dropping out:

That was Activision's decision to leave... We have a mission on behalf of this industry that we're going to execute on... We continue to have good communication with [Activision], but we're moving forward. We're going to see some interesting changes this year when it comes to membership. I think we'll be adding some members that will be exciting for ESA as well as the industry... Whether certain companies are in or out or not doesn't really change our focus.

Near the end of the program, Gallagher gets busted doing a bit of subtle anti-Activision lobbying: 

Musgrove: Please give me something I can walk away with here. I know these are both represented companies of yours, but - Rock Band 2 or Guitar Hero World Tour? They look kind of the same to me...


Gallagher: I've got to come down pretty heavily in favor of Rock Band 2. 84 tracks, it's a great product... Rock Band is really terrific...


Musgrove: Oh, wait a minute, Guitar Hero is from Activision and they're not in the ESA right now... (laughs)


NCsoft: ESA Departure Not Based on Finances

December 8, 2008 -

On Saturday, GamePolitics broke the news that MMO publisher NCsoft was the latest company to leave the ranks of game industry trade association the ESA.

At the time GP speculated that the move might have been financially motivated. NCsoft has, after all, experienced some setbacks in recent months.

However, NCsoft's Director of Public Relations, David Swofford, assures us that the decision to leave the ESA is not related to those issues. NCsoft released this statement concerning its ESA membership:

While we appreciate what the ESA does for our industry, we can confirm that NCsoft has elected not to keep membership with the ESA for 2009.

This decision was not financially motivated, as indicated in your story. There have been many changes in the gaming industry over the past couple of years and, like other developers and publishers, we have decided to wait to see how related industry events and organizations further develop before rejoining. We will be reviewing our membership status on an annual basis.

In a phone interview Swofford elaborated on NCsoft's position and pointed out that, prior to leaving, the company did not have a long history as an ESA member:

We joined [ESA] for one year and then we decided we wouldn't [renew].  We think everything the ESA does is great. Right now the timing is just not right for us to be a member of the ESA.

Swofford also told GP that trade show issues are very important for NCsoft, which exhibited at PAX this year, but not E3:

Everyone is looking to see how E3 plays out now.

So, might NCsoft rejoin the ESA fold at some point in the future?

Absolutely. We're going to assess that on a yearly basis.


Gamasutra Talks to ESA, PCGA about Piracy

December 7, 2008 -

Leigh Alexander takes a look at piracy from the industry side in a two-parter for Gamasutra.

In the first installment, Leigh speaks with Ric Hirsch, the top IP enforcement guy for game publisher's trade group the Entertainment Software Association. Hirsch talks about the ESA's efforts to combat piracy, but points out that its work is undertaken only on behalf of its member (i.e., not on behalf of Activision and the six other publishers which left the organization in 2008):

Part of the problem is [that piracy is] vast... And that's exacerbated by the internet, which has the effect of anonymizing a lot of activity... We use an outside vendor through which we monitor instances of infringing activity involving our members' game product.  Based on the reports... we send takedown notices to ISPs all over the world.

We are trying to pursue some of the principal players... at the top of the piracy food chain, members of warez groups who within days of a game's release and sometimes before, manage to get pirate versions of games available out there on the internet for download.

Over the last eight to 10 years, the U.S. government has stepped up its efforts in addressing IP piracy, in which game piracy is a small but growing part... Part of our mission is to make law enforcement understand better the problems that game piracy creates for the development of local game markets and how it impacts businesses and tax revenues from the game sector...

Meanwhile, in part two, Bo Svensson, a spokesman for the fledgling PC Gaming Alliance, discusses the controversy surrounding digital rights management (DRM):

[Stardock CEO] Brad [Wardell]'s approach is very hands-off. I think that if the PCGA as an organization is going to be all-embracing, if Stardock were to become a member and EA were to become a member, I think there are very obvious differences in their strategy as pertains to DRM. As a PC gaming organization, we probably need to be able to embrace both approaches, and still be able to make recommendations.

I think it's fair to say that, along the continuum of what is the best experience for the consumer and what provides the highest level of protection for developers and publishers, there's a whole realm of grays in there. I don't think that anyone has the right answer today.

GP: Hirsch also discusses the ESA's efforts to get the anti-piracy message into elementary schools. While I don't disagree with the message, as a parent and a taxpayer, I find the idea of permitting a corporate lobbying group to waste valuable educational time to be fairly outrageous. It's surprising that watchdog group the Campaign for a Commercial-free Childhood hasn't weighed in on this one.

There's much more to Leigh Alexander's story than we can summarize here. If the topic interests you, be sure to check it out.


Has NC Interactive Left the ESA?

December 6, 2008 -

It would appear that financially-troubled NC Interactive (the US arm of Korea's NCsoft) has left the membership ranks of game publishers trade association the Entertainment Software Association.

Last month, NCsoft announced that it plans to shut down underperforming MMO Tabula Rasa early in 2009. Facing a difficult financial picture, NC Soft has laid off a number of employees at locations in both the US and UK. The publisher also recently parted ways with famed Ultima series designer Richard Garriott. 

Departing the ESA is likely a cost-cutting measure for NC, which also chose not to exhibit at E3 this year. Game publishers pay significant fees to belong to the organization. While no announcement was made by either NC Interactive or the ESA, the trade association's membership page no longer lists NC among its ranks.

It has been a difficult 2008 for the ESA, which began the year with 28 member companies. As NC exits there are now just 21, meaning that CEO Mike Gallagher's outfit has lost a quarter of its membership in 2008.

As GamePolitics reported in October, Codemasters was the most recent company to depart. Game publishers confirmed as leaving the ESA this year include:

  • Activision
  • Vivendi
  • LucasArts
  • id
  • Crave
  • Codemasters

We have a request in to the ESA for confirmation on NC's apparent departure.

UPDATE: Confirmed by ESA Senior VP Rich Taylor:

We can confirm that NCsoft decided not to renew its ESA membership.  We respect their decision and remain committed to serving the public affairs needs of the computer and video game industry.

UPDATE 2: NCsoft's David Wofford has told GP that the decision was not a financial one. See our follow-up story.


NIMF Fires Back at GP

December 4, 2008 -

Yesterday on GamePolitics I wrote that watchdog group the National Institute on Media and the Family has been co-opted by the video game industry.

It wasn't the first time I've taken NIMF to task for accepting a $50,000 grant from the Entertainment Software Association, the lobbying group which represents US game publishers. Not surprisingly, NIMF took umbrage at my comments. Spokesman Darin Broton told GameCyte:

We’re never going to stop putting the [video game] retailers or the [video game] industry’s feet to the fire... You can rest assured that we’ll be talking publicly in 2009 about the issue of gaming addiction.


[NIMF accepted the ESA grant because] we’re working on a project to create an online tool for parents to tackle the issues of online predators, cyberbullies, etcetera. It’s not a blank check. It’s for a specific spot on the website.


Yes, there was hesitation [about accepting the ESA grant], and if there wasn’t hesitation, I don’t think any of us would be doing our jobs. But I think the end result of giving a parent another useful thing for them to make better decisions at home with their kids is worthwhile.


I’ve actually laughed at GamePolitics, because before this, GamePolitics was a frequent critic of NIMF for being too harsh on the industry. It’s a case of wanting to have your cake and eat it too.

I look forward to seeing what GamePolitics has to say in early 2009, and see if they still think we’re in the back pocket of the industry.

GP: I'm glad to see that my comments struck a nerve - they were meant to.

That said, I should point out that I have a great deal of respect for Dr. David Walsh and his organization. But there are certain lines which a self-proclaimed watchdog group like NIMF just shouldn't cross. And accepting money from the very industry you claim to be watching is one of those lines - maybe the biggest, brightest one of all. It's the reason why you won't find any paid video game advertising on GamePolitics, which is owned by the ECA, a game consumer advocacy group.

And while I haven't always agreed with NIMF's conclusions or its methodology, I've always believed that the organization's heart was in the right place. Over the years, David Walsh has been unfailingly respectful in his treatment of the gamer community and gaming press. As we all know, not every game critic behaves with such decency.

Beyond that, it's not a bad thing to have rational game industry watchdogs at work. When operating appropriately, groups like NIMF provide a useful checks-and-balances function. Yes, we may chafe at some of their conclusions, but sparking a dialogue about games and their potential effects on young people can't hurt.

In taking GamePolitics to task, Darin Broton indicates that NIMF will have some watchdog-worthy comments early in the new year.

We'll be watching.

FULL DISCLOSURE DEPT: The ECA is the parent company of GamePolitics.


ESA Denies Pursuing RIAA-style IP Enforcement

December 1, 2008 -

A Slashdot article posted just before the Thanksgiving break speculated that game publishers lobbying group the Entertainment Software Association might be turning to the aggressive, anti-file sharing tactics which have made music industry trade group RIAA infamous.

In response to an inquiry from GamePolitics, however, an ESA spokesman said the organization had not altered its response to piracy issues.

The question arose on Slashdot - and quickly disappeared into the mist of the Thanksgiving holiday - last Tuesday when Slashdot quoted a user named "cavis":

My organization just received an e-mail from the Intellectual Property enforcement division of the [ESA]. It accuses one particular IP address with 'infringing the copyright rights of one or more ESA members by copying and distributing unauthorized copies of game products (through peer-to-peer or similar software/services).' It goes on to name the filename and the application: Limewire. Has anyone had any contact with this group? Are they following the RIAA's lead and pursuing litigation for peer-to-peer piracy? I'm just trying to evaluate what I am in for as I try to battle P2P within my network." ...The [ESA's] letter reads in part...:

The... ESA is authorized to act on behalf of ESA members whose copyright and other intellectual property rights it believes to be infringed as described herein.

Based on the information at its disposal on 24 Nov 2008... ESA has a good faith belief that the subscriber using the [IP address] infringing the copyright rights of one or more ESA members by copying and distributing unauthorized copies of game products (through peer-to-peer or similar software/services), in violation of applicable copyright laws, through internet access that [agency name] provides directly to the [IP address] or through a downstream provider that purchases this access for [IP address].

While Slashdot headlined the article, Entertainment Software Association Following RIAA?, some follow-up comments to the story questioned that interpretation. So GamePolitics put the question directly to the ESA. Ric Hirsch, the lobbying group's Senior VP for IP Enforcement, responded:

Recent press inquiries regarding ESA notices to ISPs about possible online infringements of ESA members’ IP rights have questioned whether these notices represent a new enforcement tactic on the part of ESA.  


The ESA has been sending notices to ISPs regarding online infringements for many years, dating back to 2000. In short, this is not a new enforcement mechanism or a new front in our efforts against piracy. Rather, this is an example of the ESA’s ongoing vigilance and proactive work in detecting and deterring illegal activity.

GP: While the ESA's recent selection of a RIAA's former attorney as its general counsel initially fueled speculation that the organization might adopt the RIAA's draconian approach to file-sharing issues, that would not appear to be the case, at least not in this instance. Most notably, there's no apparent demand for a cash settlement in lieu of a lawsuit. And while the full ESA letter is not cited by Slashdot, it appears to be more of a takedown notice than anything else.

We'll update if more info becomes available.


Florida A.G. Once Fretted About Wiimote, Now on ESRB Bandwagon

November 28, 2008 -

When gamers last heard from Bill McCollum, the Florida Attorney General was fretting that the motion-controlled Wii version of Manhunt 2 would have a generation of kids practicing to be killers. As GamePolitics reported in June of 2007, McCollum apparently got that idea from Jack Thompson.

These days, McCollum is, like many political colleagues in other states, urging parents to follow ESRB content ratings while shopping for holiday gifts. A press release on his official website quotes the Republican A.G.:

Though the holiday season is one of the busiest times of year, it is also perhaps the most important time of the year for consumers to make sure they know what they're buying for their loved ones. The ESRB rating system provides parents and others with age and content information which can be informative tools when purchasing games for family and friends.

McCollum's press release also quotes ESRB head Patricia Vance as well as ESA CEO Michael Gallagher.

But not Jack Thompson.


ESA Boss Answers 10 Questions... GP Has One More

November 26, 2008 -

GameDaily is running a feature in which ESA boss Michael Gallagher answers 10 questions from readers.

Although it sounds juicy, there are no real fireworks in either the questions and answers. Here's a sample:

9. What areas of the ESA do you feel need improvement in terms of serving the needs of the U.S. game industry, and what are you doing to address these?

Fixing the E3 Expo is a critical step forward. We need an industry event that captures the energy, creativity, and growth on our entertainment medium. I look forward to the lift ESA will get from the much improved show next June. In addition, it is critical for our industry to elevate its participation in the political process – through the ESA PAC as well as through the hundreds of candidates ESA supported on the state level. We need to boost those resources and improve targeting going forward.

On the grass roots level, we need to continue to grow, excite, and unleash the Video Game Voters Network in the policy arena... The video game industry is dynamic and fast-growing – and ESA must continue to foster and represent those qualities on behalf of the industry, its innovators, entrepreneurs, artists, and consumers.

Gallagher also talks about his view of what the Obama administration will mean for games. Interesting, but he has already tackled this subject in some detail.

GP: I would have liked to have asked if Gallagher really imagines that the VGVN can legitimately represent game buyers when game sellers are paying the freight? Isn't that a bit like asking General Motors to represent drivers?

Sure, the interests of gamers and publishers converge on issues like censorship. But those interests diverge wildly when it comes to a number of issues which affect consumers such as DRM, the DMCA and used game trades.

And, yes, I recognize that I've got an inherent conflict of interest on this topic due to the ECA's ownership of GamePolitics. It's really the main reason I haven't been more vocal on this issue. But given the many controversies over anti-consumer measures like SecuROM, I'm frankly surprised that other outlets in the gaming press don't weigh in.


Feds' Mod Chip Raid Ended a $2.5 Million Piracy Operation

November 24, 2008 -

A 2007 investigation by Homeland Security agents led them to conclude that a Texas company was raking in as much as $2.5 million per year through the importing and reselling of mod chips obtained from a supplier in China, GamePolitics has learned.

When installed in video game consoles, mod chips allow for the playing of pirated copies of games, but have other more legitimate uses as well. Although they are legal in some countries (Canada, Australia, UK), mod chips are prohibited in the United States under terms of the Digital Millenium Copyright Act.

To date, federal law enforcement officials have kept a tight lid on "Operation Tangled Web," their code name for a wide-ranging investigation into mod chip distribution in the United States which culminated in a series of raids in August, 2007. However, a detailed search of publicly-accessible court records by GamePolitics has turned up signed copies of warrants authorizing investigators from U.S. Immigration and Customs Enforcement to seize two accounts controlled by a Texas man, identified by investigators as Manuel S. Diaz-Marta of Dallas. The warrants were sworn to by ICE Agent Vaughn Johnson, an asset seizure specialist.

GamePolitics readers may recall that on August 1, 2007, ICE agents raided 32 locations in 16 states, seeking evidence of mod chip distribution. Federal agents received technical assistance in the case from video game publishers trade group the Entertainment Software Association.

According to the documents obtained by GamePolitics, the investigation into Diaz-Marta began in November, 2006 when ICE Agent William Engel of the agency's Cleveland Field Office made undercover purchases of PlayStation 2 mod chips from An ICE check of domain registration records showed that the URL was registered to a Dallas company, NonStop Technologies. Feds then traced a money order used to make their undercover purchase and found that it had been deposited into a Wells Fargo Bank account registered to NonStop Technologies and Diaz-Marta. ICE alleges that Diaz-Marta listed his gross annual sales as $1,800,000 on Wells Fargo account application forms. When investigators seized the Wells Fargo account on August 1, 2007 it contained $109,100.55.

ICE also alleges that, between August, 2006 and February, 2007, the Wells Fargo account was used to make forty wire transfers totalling more than $500,000 to Supreme Factory, a Chinese company which federal investigators say is known to them as a distributor of mod chips. During the same time period, more than $1.2 million was deposited into the Wells Fargo account, presumably from mod chip sales within the United States. At that rate, federal investigators calculated that would have been generating roughly $2.5 million per year in sales.

During the August 1, 2007 raid, investigators searched Diaz-Marta's residence, according to one of the affidavits signed by Agent Johnson. At that time agents discovered more than 100 mod chips as well as invoices from Supreme Factory for additional devices. Agent Johnson estimated that 80% of NonStop Technologies' business derived from mod chip sales, writing in a seizure affidavit:

The business cycle for NonStop Technologies more closely resembles that of a drug dealer than that of a provider of legitimate consumer goods. The sales volume and turnover being conducted by NonStop Technologies is indicative of the sale of a highly sought after and scarce product...

As a result of the search of Diaz-Marta's residence, agents also moved to seize a Scottrade account. No funds were contained in that account, however.

GP: Today's GamePolitics exclusive coverage is the first public indication that 2007's Operation Tangled Web was a major investigative success for the feds, as well as something of a coup for the ESA's anti-piracy team. Heretofore, the only publicly available information on the case has consisted of scattered, largely unofficial reports concerning apparent small-fry who were caught up in the sweep. Now, with evidence of NonStop Technologies' impressive revenue stream and large wire transfers to China, the picture of the investigation has changed considerably.

It is important to point out, however, that no information has been released by the U.S. Attorney's Office regarding potential indictments of anyone involved in the case, including Diaz-Marta. ICE declined GP's request to comment for this story. We should also point out that 31 other places were raided on August 1, 2007. Very little is known so far about what was found at most of those locations.

Document dump:

1.) seizure warrant for Wells Fargo Bank account

2.) seizure warrant for Scottrade account


ECA's Hal Halpin Dissects the Political Side of Gaming

November 23, 2008 -

In a no-holds-barred interview with Crispy Gamer, Entertainment Consumers Association president Hal Halpin dishes on the uneasy relationship between Washington, D.C. and the video game community.

As part of his leadership role with the ECA, Hal does quite a few interviews, but this one with CG's James Fudge is probably the most in-depth yet. Here are some of Hal's thoughts:

On game publisher group the ESA's new (in 2008) practice of making campaign donations:

The [ESA] represents the rights of game publishing companies and as such has a duty to do what it can to influence legislators by lobbying. I know that starting up a PAC (Political Action Committee) was a decision that they grappled with for over a decade... PACs can be effective tools, but yes, you do run the risk – nowadays – that the ends may not justify the means...

On game ratings and whether the industry does enough to keep mature-themed games away from minors:

I’ve been a fan of ESRB for quite some time. Of all of the ratings systems... it really is the most comprehensive and valuable... That said, there’s always room for improvement. Perhaps ESRB having more independence from the ESA would be one great step. Another might be to work more closely with us... which we’re working on...


I do [think the industry is well at keeping M-rated games away from minors]...

On supposed tensions between the ESA (publishers group) and the ECA (consumers group):

We should be clear that the ESA represents the rights of game publishing companies, not gamers... It’s a trade association that looks after the interests of their member corporations... That said, much of the legislative work that the ESA has done over the years, with regard to First Amendment in particular, has benefitted the sector as a whole – gamers included.


As Mike Gallagher (ESA president) and I have discussed several times, the vast majority of the time ESA and ECA are on the same page... but there are clearly other times where our interests are necessarily divergent. Inherently, Mike’s issues will sometimes be in opposition to the best interests of consumers solely because they’re in the best interests of publishing companies...

On frequent game violence critic Sen. Joe Lieberman (I-CT):

Joe Lieberman has been largely misunderstood and painted with a very broad brush in my opinion. While I haven’t agreed with much of what he has said in the past, he alone among legislators was responsible for effecting non-legislative change in our business and did it with a lot of class, I might add.


Again, back when I was running [game retailers group] IEMA, I received a call from one of his staff inviting me to his office in Hartford. We had a frank meeting in which he requested that game retailers begin carding for the sale of mature-rated games in much the same way that movie theatre owners were doing, via self-regulatory efforts, with R-rated movies. The IEMA retailers... met the challenge head-on and reacted quickly and efficiently – changing the way in which games were sold, forever.

On game rentals and used game trade-ins by consumers, which some publishers and developers would like to see ended:

I understand the concerns that developer friends of mine have about not getting a second bite of the apple... In the movie business, they produce a theatrical version and then DVD, Blu-ray, Video on Demand (VoD), PSP and pay-per-view versions...


[Game biz types] see rental and used as businesses in which they don’t get to participate. And while I understand and appreciate their perspective... I’m still not convinced that rental and used are bad for the sector. We’ve witnessed how rental has provided a low-cost venue for people to try before you buy; same for used...

On the U.S. Supreme Court and its potential impact on video games:

Well, [a change in the balance of the court] will most definitely present a problem for the industry, but not necessarily consumers. The more conservative judges are also the ones that tend to side with intellectual property owners over consumers, for instance. Tech policy is in for a major shift from the right to the left in my opinion, and that would be very good for consumers, but quite disconcerting for the IP-concerned trade associations (MPAA, RIAA and ESA).


We’ve also heard that the conservative judges would be more likely to be open to anti-games/gamer bills, so a shift to the more liberal side would be good for both the trade and consumers in that regard.

Hal also points interested gamers to a detailed listing of ECA's position statements.

FULL DISCLOSURE DEPT: The ECA is the parent company of GamePolitics.

In Wake of Election, ESA Boss Sees Historic Time for Game Community

November 21, 2008 -

In an op-ed published at 1up, Michael Gallagher, CEO of game publishers trade group the Entertainment Software Association, frames the recent presidential election as "a historic time for America and the computer and video game community."

Recapping many of the campaign-related game developments (Obama's XBL ads, McCain's Pork Invaders game), Gallagher writes:

The campaign produced a milestone of its own in the use of our technologies to engage and communicate with voters.


 For the first time, American gamers and the entertainment software industry played an active role in the political process...

With the U.S. recession deepening, Gallagher also cites the benefits that the game industry provides to the U.S. economy and lays out the ESAS's agenda going forward:

  • working closely with all levels of government
  • preserving the First Amendment rights of gamers
  • supporting parental education efforts around video game ratings
  • protecting our industry's intellectual property
  • leveraging broadband to increase the connected experience
  • working to improve our industry's contributions to the economy
  • supporting state-level tax incentive legislation

Gallagher concludes with:

We look forward to working with the Obama administration, the new Congress and state leaders around the country and ensuring that America's governments recognize the positive effects of the computer and video game industry.

UPDATE: For more of Gallagher's thoughts, see GameStop's interview.

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prh99The unflattering characterization "‘Games culture’ is a petri dish of people who know so little about how human social interaction..." probably didn't help.10/02/2014 - 1:52am
prh99Probably not many as it was purely a vindictive move. The headline alone was plenty of ammo, but for those that did read and complain..10/02/2014 - 1:42am
Andrew EisenI wonder how many of those who complain about that article actually read past the headline.10/02/2014 - 1:37am
prh99 it isn't surprising "Gamers are over" didn't go over very well.10/02/2014 - 1:34am
Papa MidnightCan you parlay that to #WriteAGawkerArticle? The cesspool of horrid crap over there extends far beyond Kotaku.10/02/2014 - 12:34am
Andrew EisenWow! Intel dropped Gamasutra due to GameJournoPros? Over Matt Matthews? The only Gamasutra guy in the group? Who hasn't written a single thing about #GamerGate at the site? Where did you read that?10/02/2014 - 12:32am
Neo_DrKefka#WriteAKotakuArticle "#GamerGate is responsible for breaking millions of Intel powered macbooks after angry SWJ hipsters slam them shut" or "How Toxic Processors from Intel causes sexism. "10/02/2014 - 12:15am
Neo_DrKefkaSo Intel has dropped Gamesutra due to there support of your Gaming News Cabal Fudge. Anti GamerGate article soon? Or like your e-mails are you hoping this narrative dies down soon?10/02/2014 - 12:14am
Andrew EisenWell, time to eat some dinner and work on the Hyrule Warriors guide until bedtime!10/02/2014 - 12:11am
Andrew EisenJust finished my stream. That... could have gone better. Technical issues prevented me from playing a console game so I instead played and bitched about The Walking Dead for two hours. Oh well, the folks watching still seemed to enjoy it.10/02/2014 - 12:09am
Matthew Wilsonwe all know valve can not cout to 3.10/02/2014 - 12:08am
MechaTama31Who cares? Gimme Portal 3!10/01/2014 - 9:38pm
quiknkoldAndrew : Mostly I decided there were better people who could explain what was going on, or fight any battles that may come up. so I decided not to talk about it anymore.10/01/2014 - 8:49pm
Andrew EisenI don't recall you promising that. GamerGate is not a taboo discussion here. Anyway, thanks for the link. Very interesting.10/01/2014 - 8:47pm
quiknkoldI know I promised to not talk about Gamergate again, but Intel just pulled sponsership from Gamasutra over it - 8:40pm
quiknkoldP.T. is a game I just cannot play alone. I puss out hard on it. need somebody with me when I play that. Kojima was right. it is Pants Shittingly Scary10/01/2014 - 6:17pm
quiknkold@james_fudge not playin all the way through. P.T, Silent Hill(Not sure which), Resident Evil Gamecube Remake, Alien Isolation, Ghostbusters, Outlast, Super Castlevania 410/01/2014 - 6:04pm
james_fudgeI wish I could like that last shout.10/01/2014 - 5:48pm
MechaTama31Tried out Sims 4 on my brother in law's pc. Promptly got my sim exhausted, to soil himself, then sent him without cleaning up to mock people at the museum. Good times...10/01/2014 - 5:33pm
E. Zachary KnightSo they figured out how to share CPU cycles between pools and their advanced emotions engine? Sweet.10/01/2014 - 2:53pm

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