ESA's 2011 Annual Report
A Message From Michael D. Gallagher
I am proud to present the 2011 Entertainment Software Association (ESA) Annual Report. 2011 was a historic year for our industry, and ESA proudly maintained its commitment to representing the business and public affairs interests of computer and video game companies during this transformative period.
Just days after the conclusion of last year's E3, the U.S. Supreme Court in June vigorously affirmed the First Amendment rights of our industry's artists and creators in the case of Brown v. Entertainment Merchants Association (EMA)/ESA. The Court's landmark ruling declared that video games enjoy the same constitutional protections as books, movies, and fine arts. It was a tremendous victory for our industry, its artists, and consumers. The decision places video games where they belong — alongside other protected forms of speech — and provides a solid defense against future attempts to institute content-based regulations for media and other creative works.
We achieved this milestone because of the perseverance of our member companies, and critical contributions from an array of organizations and individual experts spanning fields from social science and law to art and media. Thank you for your support and resolve, and for helping to amplify our industry's strong voice.
While the Supreme Court case was a primary focus for our industry last year, ESA achieved a number of other accomplishments in 2011 that bolstered our industry's foundation and continued paving the way for its future success. Featured here are some of the achievements demonstrating our forward progress:
- ESA welcomed 38 Studios, Nival, Level 5, Mad Catz, and Rubicon as new members, further strengthening our association.
- Federal officials increasingly recognized the many ways video games improve the U.S. economy and Americans' daily lives. ESA worked with Reps. Kevin Brady (RTX) and Debbie Wasserman Schultz (D-FL) to launch the Congressional Caucus for Competitiveness in Entertainment Technology (E-TECH Caucus). The caucus, which Reps. Brady and Wasserman Schultz co-chair, comprises Members from both sides of the aisle, and serves as the educational and advocacy portal to Congress on video game industry issues. ESA hosted a Capitol Hill event in February 2011 to celebrate the E-TECH Caucus' launch, which more than 200 congressional staff and private sector colleagues attended.
- Lawmakers in Florida, Puerto Rico, Texas and Utah acknowledged the industry's economic benefits by enacting bills creating new or improving existing tax incentives for computer and video game production. Twenty-two states currently provide incentives for game development.
- Approximately 45,000 attendees participated in E3 2011, which generated significant media coverage and consumer buzz for the industry. This event once again proved to be the launch pad for video game news and the world's preeminent video game event.
- Our intellectual property and anti-piracy teams worked closely with federal agencies, law enforcement officials, and international industry representatives to ensure robust protections for computer and video game companies worldwide. This effort included conducting training sessions on detecting and investigating game piracy for 1,500 law enforcement officials in the U.S., Canada, and Mexico, as well as promoting youth education emphasizing the importance of respecting intellectual property rights.
- ESA remained dedicated to promoting and encouraging the growing use of computer and video games as educational tools, particularly in teaching science, technology, engineering, and math (STEM). In November, we announced the second annual National STEM Video Game Challenge in collaboration with The Joan Ganz Cooney Center at Sesame Workshop, E-Line Media and the Corporation for Public Broadcasting/PBS KIDS Ready to Learn initiative. The competition launched in partnership with the White House Digital Promise initiative, a national program dedicated to supporting the development of technologies, such as educational games, that can transform learning. I also had the honor of representing ESA before the House Committee on Science, Space, and Technology. My testimony focused on games' dynamic potential to enhance STEM education.
- ESA developed and released the 2011 Essential Facts About the Computer and Video Game Industry, highlighting the growing diversification of the gamer audience and increasing popularity of game content delivered in digital formats. Among the findings, the research showed that more Americans than ever - 72 percent of U.S. households - play computer or video games. Of these gamers, 82 percent are adults, and 42 percent are women.
- The Entertainment Software Rating Board (ESRB) developed additional tools that empower parents to manage their children's game play. In November, the ESRB and CTIA partnered to launch a new mobile application rating system that extends the use of ESRB ratings to games developed for mobile platforms, providing parents with important content information about this rapidly growing and evolving segment of the interactive entertainment market. An updated version of ESRB's mobile rating search application now includes voice recognition technology, enabling users to access game rating summaries by simply saying a game's title into their smartphones. To further raise awareness and encourage use of its ratings, ESRB also launched new PSA campaigns featuring the Washington Capitals of the National Hockey League and the attorneys general of Oklahoma and Missouri.
- The ESA Foundation continued to provide valuable opportunities for America's youth and college students through its Computer and Video Game Scholarship Program, awarding 30 scholarships to students from 21 states and 21 different academic institutions. In addition, the annual Nite to Unite - for Kids event raised $900,000, enabling the Foundation to distribute grants to organizations that contribute to a more digitally advanced generation.
These achievements, and the many others described in the following pages, demonstrate our industry's growing vitality and influence. Yet none of this would have been possible without the dedication and leadership of our member companies. I would like to express my gratitude to our Board members, ESA staff, and the ESRB. Together, we will enhance appreciation for games and increase understanding of the positive impact they have on the economy, education, healthcare, businesses, and the arts. I look forward to further developing our industry's critical and evolving role in positively shaping and advancing our society's future.
Michael D. Gallagher
President and CEO