Broadband and the
Video Game Industry:
A Partnership for Future Growth
Michael D. Gallagher
President and CEO
Entertainment Software Association
Broadband Properties Summit
Dallas, Texas
April 28, 2009
An Increasingly
Interconnected Relationship
In less than a decade, video games have embraced
the new opportunities that broadband affords
 Sony shipped PlayStation 2 in 2000 without a built-in
network adaptor
 When Microsoft launched Xbox Live
in 2002, the service supported only
five exclusive games
An Increasingly
Interconnected Relationship
 Today, microtransactions,
downloadable content,
and online game play reshape
the industry on a daily basis
 500 million online EA Sports
games have been played since
its launch in June, 2008—equates
to 2.2 million EA sports games
are played each day
Video Games Enter a New Era
Opinion leaders increasingly appreciate the
industry’s contributions across society
 Overall computer and video
game sales climbed to $22
billion in 2008
 Over 400 academic
institutions around the world
offer video game programs or
courses
 An ESA survey found that 70% of businesses
currently use games to train employees
An Expanded Consumer Base
The industry has maintained traditional gamers’
support while reaching out to new demographics
 The average gamer is 35 years old
 Women represent 40% of gamers
 One out of every four
gamers is over 50
Games Tackle Serious Issues
Despite roots in entertainment, video games today
serve serious purposes for many organizations
 Broadband enabled Stanford
University to launch the
Folding@Home project to better
understand protein folding
 The United Nations created Food
Force to educate children about
world hunger
 The University of Southern California modified
Virtual Iraq to treat post-traumatic stress disorder
Video Games Mean Business
An ESA survey found that 70% of businesses
now train employees through video games
 78% of organizations not using the technology
today likely will offer it within the next five years
 More than 75% of companies plan to expand their
usage within the next three to five years
More than 200 academic institutions
across the U.S. offer video game
programs or courses
A New Outlet for Creativity
Video games have become a preferred medium
among many artists for expressing their talents
 Game developer Ninja Theory hired award-winning
composer Nitin Sawhney to produce a soundtrack for
Heavenly Sword
 Into the Pixel, a 16-piece video
game art exhibit, appeared at the
2009 South by Southwest festival
 Grand Theft Auto IV received
widespread critical acclaim for the game’s artistic value
A New Source of Community
Online game play has allowed the industry’s
diverse consumer base to feel connected
 According to the Pew Internet & American Life Project,
76% of teens play video games with other people
 Sony’s PlayStation Network maintains more than 20
million registered user accounts
 Microsoft’s Xbox Live users watched
25 million hours of Netflix movies and
TV programs during the partnership’s
first three months
An Economic Engine During
Stagnant Times
Despite the financial crisis, overall computer and
video game sales climbed to $22 billion in 2008
 Annual software sales grew to a
record $11.7 billion last year
 December, 2008 sales exceeded
$5 billion
 Analysts expect software and
advertising sales worldwide to top
$68 billion by 2012
 North American gamers spent $1.9 billion
downloading games last year
Our Path Forward
As our relationship evolves, we must keep our
focus on our consumers’ needs
 Expand opportunities for consumers to download and
play games from a wide range of legitimate online
services
 Seek government policies at the local, state and
federal levels, including tax incentives, that encourage
more affordable, accessible and faster high-speed
Internet service
Our Path Forward
 Advocate for stronger intellectual property rights, with
attention devoted in particular toward countries listed
on the Special 301 Report
 Intellectual property is a leading reason why people
adopt broadband and that boost to the ecosystem
requires protection
Broadband and the
Video Game Industry:
A Partnership for Future Growth
Michael D. Gallagher
President and CEO
Entertainment Software Association
Broadband Properties Summit
Dallas, Texas
April 28, 2009