Despite the vote of no confidence the Entertainment Software Association received from former members, it’s apparently been busier than advertised. The advocate for US game publishers issued a press release today announcing California has settled a grievance over a 2005 video game law to the tune of $282,794.

The sum covers the ESA’s legal expenses incurred while representing the games industry over California’s 2005 video game law. A U.S. District Court Judge declared the law introduced by Governor Arnold Schwarzenegger unconstitutional in August, 2007.

According to GamePolitics ESA CEO Michael Gallagher offered a scathing commentary on the state’s use of funds to pursue frivolous personal agendas.

California deserves more from its legislators than pursuing flawed legislation. State employees are facing pay cuts. California’s services are being scaled back. And, anxiety is rising in Sacramento to find funds. Rather than tackling real problems affecting Californians, they chose to waste time, money and state resources. It is shameful that legislators pursued personal agendas in spite of the facts.

Caregivers are not well-served by court battles and legal fees. Rather, they would have been far better off if state officials worked together with our industry to raise awareness about video game ratings and the parental controls available on all new game consoles—both of which help ensure that the games children play are parent-approved.

California is in a state of crisis and is struggling to agree on a new budget. The California Progress Report political news blog is giving a daily blow by blow of the situation. A state budget has been MIA for 35 days now and California is in the hole to the tune of $15.2 billion. Unfortunately Republicans are opposed the proposed plan and Democrats are no more supportive siting concerns over reforms and sales tax increases.

According to guardian.co.uk, Gov. Schwarzenegger signed an executive order terminating 10,300 part-time jobs last week. The order also reduces the pay of 200,000 state employees to the federal minimum wage until a state budget is approved.

Amidst this financial crisis, Gov. Schwarzenegger has ordered an appeal on the Judge’s injunction through the Ninth Circuit Court of Appeals. Gallagher’s response:

It is unfortunate that the state is stubbornly pursuing an appeal that is likely to lead to even more court-awarded fees.

It looks like the ESA can expect another check in the future.

Washington Post Reporter Mike Musgrove has delved into a number of game companies abandoning the Entertainment Software Association like rats from a sinking ship. reasons given for the defections from the ESA include the high cost of membership fees, the scaling down of E3 and CEO Michael Gallagher not taking an aggressive role for games industry interests unlike his predecessor.

Gallagher’s] been kind of quiet since that [September WaPo profile]… After a Fox News show featured an uninformed pundit going off about the allegedly sexually explicit nature of… Mass Effect, some gamers complained that the ESA did not step in to defend the game industry…

While top-ranking game industry executives were quick to get on the phone or respond to my e-mail queries about Gallagher last year, they weren’t as chatty this year… Last year, Robbie Bach, head of Microsoft’s game division, got on the phone to sing Gallagher’s praises. This year, Microsoft sent me a statement: “We’re as committed as ever to the ESA, and we look forward to participating in E3 this summer.” Nintendo released a shorter, nine-word statement along the same lines.

In other words your asking more for less… what have you done for me lately.

via GamePolitics

Texas Governor Rick Perry will be the keynote speaker for E3 2008 this year, and for those of you unfamiliar with him it would not even cross your mind as to why is he is an odd choice for the gaming event. Therefore to give you a better understanding as to why, visit this GamePolitics post which will give you plenty of reasons as to why he is a strange choice.

The Escapist, however, gives the best reason: Perry helped with the formation of a law that denies financial incentives to developers who produce games containing “inappropriate content.” That is the main reason he should not be the keynote speaker at E3 in my opinion, because you cannot dictate which games should and should not get funding because of what you or the government deems inappropriate. That is like saying that while you are indeed qualified, you do not get the job because the blond with the big knockers – although just as qualified as you – is more aesthetically pleasing to my eyes. Therefore you are out of luck. Strange analogy, yes, but it works.

Putting his extreme religious views aside, which GamePolitics is reporting today that Perry agrees with outspoken minister John Hagee’s view that: “Adolf Hitler had been fulfilling God’s will by hastening the desire of Jews to return to Israel in accordance with biblical prophecy” – he still is a bad choice. The National Endowment for the Arts provides funding for all kinds of “art” despite what the contents are, therefore that particular body does not sensor or cut funding for projects that the administrators find offensive. Otherwise, we never would have had that wonderful elephant dung-Virgin Mary masterpiece. Yes, I am being facetious, but that example is my whole point. Just because you feel something is not worth being funded because you disagree with the subject matter therefore not funding it IS a form of censorship. If the government is going to fund gaming developers, they need to fund all perspectives whether they are happy fluffy bunnies that give rainbow kisses or a huge muscle bound marine who blasts zombie’s heads off with a machine gun showing the nice gooey gray matter contained within. All forms of gaming should receive the same amount of equal funding regardless.

I hope everyone turns their back to Perry during his speech. That would send a message to not only him but Michael Gallagher as well.

Via: GamePolitics

Looks like I’ll have to amend my exhibitor list again. Kotaku is reporting that six more publishers have dropped out of E3 this year. Who are the missing half-dozen?

Well, to Vivendi and Activision you can add the following: Codemasters, NCSoft, Her Entertainment, and id Software. The new four have confirmed that they are not attending this year’s show, but they are remaining members of the ESA.

Wedbush Morgan analyst Michael Pachter has been quoted as placing at least part of the blame at the feet of ESA President, Mike Gallagher.

“Lowenstein was a very savvy industry veteran who paid attention to the goings-on in the industry and cared what the community had to say. The new person… whose name completely escapes me because I’ve never met him or heard from him, is far less knowledgeable and sophisticated about this industry than Doug was and is going to make some rookie mistakes.

Doug used to be a very visible spokesperson in congress… when you’d get these [things like] Barack Obama saying videogames are corrupting our youth or MADD saying that Take-Two should pull GTA off the shelves, you would hear Lowenstein immediately shoot back. I would guess that Activision doesn’t perceive the same value from the ESA as they did under Doug’s leadership. I criticize [Gallagher's] lack of drive to learn about the industry.”

Thus far, the ESA and Gallagher have had no comment, but it seems to me that common sense would say that if your largest members are leaving and/or not supporting your signature event, you may have a problem on your hands.

To be fair, NCSoft has publicly stated that their decision not to attend is based soley on their game development cycles, and has nothing ot do with the ESA or its leadership. However, the rest of us are left wondering what may come from all the other companies in the coming week, especially with the news that Activision will be holding an event on the first day of E3, just not in the convention center as part of E3.

Is this the beginning of the end for E3? We’ve speculated on it for quite some time, literally every year since the format was changed. Could it finally be upon us?

Via: Kotaku

The Entertainment Software Association is encouraging diversity in the videogame industry by establishing a scholarship fund for women and minorities.

The Scholarship fund totals 45,000 USD and will be offered in $3,000 increments to 15 lucky full-time students for the 2008-09 academic year.

“Positions in our industry are high-paying jobs with a remarkable potential to inspire and entertain millions of Americans,” commented Michael Gallagher, president and CEO of the ESA. “We hope these scholarships will encourage students to pursue careers in this growing and lucrative field.”

“We offer this program to help create our industry’s next generation who will boost the industry’s creative capital with new and unique approaches.”

Students have until May 15, to apply for the scholarship. Eligible courses of study are four-year undergraduate programs in graphic design, computer science, animation, programming, digital entertainment and software engineering supporting videogame development.

While SOE also recently established a scholarship for women, minority scholarships are still rare. Qualifying candidates can apply online at the ESA Foundation Scholarship Program website.

via ars technica

The figures are in from the NPD group and according to the Entertainment Software Association, the computer and video games industry generated $18.85 billion in sales in 2007. Software sale account for $9.5 billion of the total which is up 28% from last year. Video games are competing with other forms of entertainment. In its first day, Halo 3 outsold both the opening weekend of Spiderman 3 and opening day of “Harry Potter and the Deathly Hallows.”

“The video game industry set the pace over all others in 2007, with record-breaking sales, off-the-charts consumer demand, and innovation reaching from galactic exploration to guitar simulation,” said Michael D. Gallagher, president and CEO of the ESA, the U.S. association representing computer and video game software publishers. “On average, an astonishing 9 games were sold every second of every day of the year.” The ESA cited data showing that the industry sold over 13.4 million portable game units in 2007, easily trumping the much-hyped Apple iPhone®, which sold just 4 million units.

As much as media and politicians want to deny it, gaming is no longer a niche hobby. If it continues to grow as it has over the last few years, the games industry will be a force to be reckoned with.

via Business Wire 

Wisconsin State Senator Jon Erpenbach has proposed to add a 1% surcharge to video game purchases in order to fund a juvenile justice program. He reasons that the tax on video games. that he is assuming are mostly bought by teens, should go to keep these same teen out of the adult criminal justice system.

ESA president Michael Gallagher had this to say about the Wisconsin tax proposal: (from Joystiq)

This bill will stunt an industry that is growing in Wisconsin at over 11% per year and contributes more than $23 million to the state economy. It negatively impacts the hundreds of Wisconsin citizens whose jobs and families depend on the computer and video game industry.

And, it unfairly burdens all Wisconsin consumers by imposing a double tax on video games and game consoles. Not only is it unconstitutional to discriminatorily target video games with a punitive tax, there is no public policy support for the bill: The fact is that national juvenile crime has decreased as video games have soared in popularity.

On the other side of the fence stands Wendy Henderson, policy analyst for the Wisconsin Council on Children and Families. She’s quoted in the LaCrosse Tribune as saying:

Video games are perhaps not the best use of the kids’ time, so if we can use some of the money from the video games and turn it into something positive, that’s a really good use of that money.

Senator Erpenbach admits there is no connection between teen crime and video games, but asks for a better solution for funding to keep 17 year old criminals out of adult jails. The proposal hasn’t been officially submitted and there are no cosponsors for it as of yet. Still, the ESA is worried about the precedent a video game tax could set.

I can see the advantage of keeping 17 year olds out of the adult justice system. However I feel the logic here is flawed as according to the ESA the average age of video gamers is 33 and the average age of video game purchasers is over 40. In fact in 2007 92 percent of computer game buyers and 80 percent of console game buyers were over the age of 18. To say the video game tax is teens helping themselves just doesn’t stand up against the evidence.

via GamePolitics

Entertainment Software Association has announced that the U.S. game industry growth is outstripping the growth of U.S. economy by a wide percentage. The game industry grew 17% from 2003-2006 as compared to the 4% economic growth of the U.S. during the same period.

The ESA states that the video game industry contributed $3.8 billion to the U.S. Gross Domestic Product and directly employed 24,000 in the U.S. at an average salary $92,300 during 2006. California which employs 40% of the game industry jobs reported industry growth was 12.3% last year, which the ESA claims is “nearly three times faster” than the state’s overall growth.

“Computer and video game companies play an ever increasing role in our nation’s growing economy,” said Michael Gallagher, CEO of the ESA. “These companies and their colleagues across the nation are making entertainment software one of the fastest growing industries in the United States.”

via Gamasutra 

Mike Musgrove of The Washington Post recently had a chat with Michael Gallagher the newest “big gun” of the Entertainment Software Association. In this interview, Michael says he hopes to raise the profile of video games among policymakers and thought leaders. “Video games are not getting the type of recognition they deserve as an entertainment medium,” he said. “Politicians don’t understand games and often pick on violence as a way to polarize voters. I think the next step is for us to raise our profile even further so we can garner the same respect given to other entertainment industries, such as the movie industry,” he wrote. According to Mike Musgrove, Gallagher likes to point out that only 8 percent of the games released each year are violent, “mature”-rated titles of the sort that make headlines.

We were all skeptical of Gallagher when he took the position with the ESA, but after reading this piece from The Washington Post, I have to say that we need more people like him advocating gamers and gaming medias on Capitol Hill. If corruption and the obligatory sense of power do not seep through the cracks of his moral fiber, he could certainly do us a world of good considering his position. We should all keep our fingers crossed that he will remain loyal to the gaming industry and that Bill Gates, politicians, and morality groups do not leave him feeling jaded. We all well aware of what D.C. can do to the most honorable person as well as the most loathsome.

via: The Washington Post

Photo Courtesy of The Washington Post, Marvin Joseph

People of the world, you are now safe. After a year long investigation dubbed “Operation Tangled Web”, (dun dun dun!!) the department of U.S. Immigration and Customs Enforcement (or ICE) has cleaned up this messy world.

What was their target? Was it terrorists? Corrupt CEOs? No, they were after something far more sinister. They were after the plague on mankind known as mod chip distributors. Sure to go down in history as one of the lamest operations ever, Operation Tangled Web was the largest enforcement operation of its kind targeting these felonious dealers.

ICE has just stepped up the operations in a big way, issuing 32 federal search warrants over 16 states over the last 24 hours. That’s a lot of numbers listed in a statistical fashion, so it’s hard not to be impressed.

ESA chief Michael Gallagher was quick to slap ICE on the back for helping him keep his job. Here’s what he had to say:

“Plain and simple, selling and distributing products to illegally bypass game consoles’ piracy protections is a crime with real-life consequences. This is not a game; we’re talking jail time. Enforcement initiatives of this scope send a clear message to both the public and pirate community that this illegal activity will not be tolerated,” said Michael D. Gallagher, president of ESA, the trade association representing U.S. computer and video game publishers. “We commend Immigration and Customs Enforcement (ICE), the U.S. Department of Justice, and the participating U.S. Attorneys’ offices for targeting individuals and groups selling ‘mod-chips’ and pirated game software.”

They arrested people who play video games and he goes, “This is not a game”. Zing! Way to show those jerks who is boss.

Look, laws need to be enforced. I understand that. My only concern here is that so much manpower is wasted on something so trivial. Is an Xbox that plays burned DVDs a threat to national security? I doubt it.

Oh! Next let’s go after those guys who sell fake designer purses, those guys have it coming. Grab your shotguns boys… It looks like this operation… is in the bag. Zing!