Coasting right there along with the complaints was a building buzz that next year's E3 was going to have to undergo some mammoth changes. Just how mammoth? According to a number of well connected sources I spoke with during the show, there's considerable thought going into opening the doors, this time officially, to the public at next year's big event.

Reached for comment earlier today, the Entertainment Software Association had this to say:

"The ESA is currently in the process of receiving feedback and will make an announcement about the 2009 E3 Media & Business Summit at an appropriate time."

My two cents? I find Leipzig's Games Convention to be the best format going for large gaming events. In the big Europe-centric show you have a number of mammoth halls showing off the best and brightest gaming has to offer to the public. You also have a hall or two dedicated solely to the press where writers and reporters can have quiet meetings and interviews with developers, producers and businesses types. The best part for a working journalist? Being able to do your interviews with the movers and shakers of the industry and then walk five minutes to get a chance to talk to the people who play those games. It's like reporting nirvana.

Come on ESA, follow suit.

The bill takes effect in 2010.

"The state has ignored legal precedent, common sense and the wishes of many New Yorkers in enacting this unnecessary bill," said Richard Taylor, senior VP of communications and research for the Entertainment Software Association. "This government intrusion will cost taxpayers money and impose unconstitutional mandates for activities and technologies that are already voluntarily in place. It also unfairly singles out the videogame industry over all other forms of media."

Laws that try to enforce the ratings system by providing fines against retailers have been ruled unconstitutional over and over again — just look to states such as in California, Oklahoma, Louisiana, Illinois and Minnesota for examples. In those cases, the ESA ended up collecting hefty damages from the states — at taxpayer expense.

"One wonders where this overreach by government in New York will end," said the ESA's Taylor. "If New York lawmakers feel it is the role of government to convene a government commission on game content, they could next turn to other content such as books, theater and film."

The bill was part of a group of public safety bills that the governor signed as a "package"; the official announcement from the New York Governor's Office follows. The part about the video game bill is in bold:

GOVERNOR PATERSON SIGNS PACKAGE OF BILLS THAT WILL PROTECT THE PUBLIC SAFETY AND RIGHTS OF NEW YORKERS

Includes Reforms to Protect Children and Adults in Residential Care and “Jonathan’s Law” Extension

A New Law Will Protect Children by Automatically Revoking Teaching Certificates from Educators Convicted of Sex Crimes

New Law Will Expand Access to Civil Orders of Protection to Victims of Abuse

Governor David A. Paterson signed a package of bills, many of which are focused on public safety and protecting the rights of New York residents. Among the more than three dozen bills signed into law by Governor Paterson, some will enhance protections for children and adults in residential care, revoke teaching certificates for educators who are convicted of sex crimes and ensure the State will explore the negative effects of violent video games.

“We have the obligation to be constantly vigilant about amending our laws to protect the residents of New York State. Many of these bills will do just that by closing loopholes or creating new laws to enhance the quality of life for all New Yorkers,” said Governor Paterson. “The first duty of government is to provide a safe society for our resident to live, work and raise their families. These new laws will enhance the protections afforded to the citizens of this state and will address gaps in protection that have existed for years. I applaud the Legislature for working with me and my staff to reach agreements on fixing these problems.”

Governor Paterson has also signed a new law (S.8665 / A.11707), which will expand access to Civil Orders of Protection, allowing a person who is or was in an intimate relationship with an abuser – even though not related to that person – to seek an order of protection in family court. This substantially expands protections for victims, who for a variety of reasons may be unwilling to press charges in criminal court.

Another specific package of reforms – consisting of four bills – will represent a significant improvement for adults and children who live away from their families in residential care, particularly in mental hygiene facilities. The package includes: enhancing the standards used to determine if child abuse or neglect has occurred in residential facilities (S.8534-A / A.11753); extending the time period for retroactive requests for information under Jonathan’s Law (S.8389-A / A.10897-A); prohibiting the withholding of food or hydration from residents of mental hygiene facilities (S.8551-A / A.11482-A); and making recommendations as to appropriate work hours for direct care employees in mental hygiene facilities (S.8679-A / A.11757).

Two other bills signed by Governor Paterson are directly aimed at protecting children: A.11500-A / S.8553 automatically revokes the teaching license of any school official who is convicted of a sex offense; A.11717 / S.6401-A establishes an advisory council to conduct a study on the connection between interactive media and real-life violence in minors exposed to such media. This bill will also require new video game consoles to have parental lockout features by 2010, and mandate that games sold at retail disclose the ratings obtained from the gaming industry's voluntary rating system.

In addition to these bills, Governor Paterson signed another 31 bills relating to criminal justice and the judiciary, as well as education issues and business and finance.

Employers find that using games to train not only reduces costs and increases efficiency, employees retain training through interactive means more than they would a simple slide presentation or training videos (known in wage-slave parlance as "Nap Time").

Interesting number, for sure, but the statistics I really want to see is how much interactive gaming goes on in the workplace that employers are completely unaware of. Of course that would require cameras in the bathrooms to monitor DS and PSP usage, which is still unfortunately illegal. Hit the jump for more numbers!

USE OF VIDEO GAME TECHNOLOGY IN THE WORKPLACE INCREASING

Study Finds 70 Percent of Major Employers Use Interactive Computer Training That Includes Game-like Simulations

JUNE 23, 2008 – WASHINGTON, DC – Seventy percent of major employers utilize interactive software and games to train employees according to a new study released today by the Entertainment Software Association (ESA). The study data also showed that more than 75 percent of businesses and non-profits already offering video game-based training plan to expand their usage in the next three to five years. And more than three-quarters (78%) of organizations not utilizing this technology today are likely to offer it in the next five years.

“Businesses across the spectrum, from automobile manufacturers to financial service providers, are utilizing entertainment software to help educate their employees to better serve their customers and improve their bottom lines,” said Michael D. Gallagher, CEO of the ESA, the U.S. association representing computer and video game publishers. “Interactive technology is a valuable tool in workforce development and this study underscores the fact that video games have become a mass medium helping Americans live, work and of course play.”

The top uses of video game-based training by major American employers include: compliance training; training for specific job functions; IT training; management training and customer service training. Seventy-seven percent of these training programs tested employee knowledge and 55 percent included interactive role playing.

The survey found a vast majority of organizations offering video game-based training were satisfied with the results and sophistication of the training. Respondents said the biggest advantages of video game-based training are:

* a reduction in costs;
* more efficient and faster training;
* the ability to apply consistent training across all parts of an organization;
* the ease of measuring employee participation; and,
* better information retention.

Managers of three in four companies also said their employees like video game-based training more or the same as traditional training and their employees found the convenience and ability to learn at their own speed particularly attractive.

"The demand for training games is definitely rising as managers look for new ways to train their employees that are both effective and more compelling than the standard eLearning fare," said Marc Prensky, founder of Games2train, a company created in 1999 to serve the growing demand for corporate game-based training. "In my experience, computer, video and, increasingly, cell phone based training games are more successful than traditional training methods, because employees find them more engaging, thereby increasing the likelihood of completion of the training and retention of the required information and concepts. In addition, simulation-based games allow employees to learn and practice needed physical and mental skills, and thus be more effective when they get on the job."

Games2train (www.games2train.com) created more than 50 software games for companies such as American Express, Bank of America, Charles Schwab & Co., Estée Lauder Companies, Inc., JP Morgan Chase & Co., Nokia Corporation and Pfizer Inc., as well as training games for the US military.

Canon U.S.A., for example, uses a video game to train new copier technicians. To play, technicians must drag and drop parts into the right spot on a virtual copier. IBM developed “Innov8,” a role playing game that is said to teach graduate students a combination of business and IT skills. The Hilton Garden Inn, meanwhile, introduced the first training game for the hospitality industry, which places employees in a virtual hotel, interfacing with customers and fielding typical guest requests.

The national poll, conducted for the ESA by KRC Research, surveyed the management of 150 large U.S. companies and non-profits between March 17 and April 2, 2008.

The ESA is the U.S. association dedicated to serving the business and public affairs needs of companies publishing interactive games for video game consoles, handheld devices, personal computers, and the Internet. The ESA offers services to interactive entertainment software publishers including a global anti-piracy program, owning the E3 Media & Business Summit, business and consumer research, federal and state government relations, First Amendment and intellectual property protection efforts. For more information, please visit www.theESA.com.

Earlier this week we had a chance to ask a number of pointed questions of Gallagher about some of the news that has recently rocked the association that he runs.

In this exclusive first in-depth interview with Gallagher about the perceptions and problems plaguing the ESA, he reveals that the annual E3 tradeshow made up about 85 percent of the association's operating funds and that the membership dues increases sparked by the show's downsizing were in some cases "substantial." He also offers his thoughts on why companies like Activision, Vivendi, LucasArts and id have left the fold of the association and why the ESA, despite the recent troubles, is still an important and viable part of the industry.

How much advance notice did you have that Activision, Vivendi, Lucas Arts and id were going to leave the ESA?

Each company gave the ESA ample notice. In discussions, they expressed gratitude for our work and continued support for the mission of the ESA. The public comments from all involved reflect that.

What reason did they give for leaving the ESA?

I would refer you to those companies for their reasons. They are publicly on the record supporting ESA’s mission, but their own business circumstances led them to that decision.

The business environment for video games is very complicated today. Some games are hugely successful – and very costly to develop and publish – but those are greatly outnumbered by those that do not do well in the marketplace. Even though the industry as a whole had a record year last year, with revenues up over 43%, that success has not been spread evenly.

Do you think that the increased cost of ESA membership factor into their decision?

Again, I’m sure this was a tough decision for those few companies, but would encourage you to contact them.

How much did ESA membership dues go up, percentage wise?

To answer this, it’s important to provide some context. In the past, E3 was a revenue-generating entity. As such, approximately 85% of the ESA’s operating funds resulted from that event. The trade show surplus allowed the ESA to provide membership at significantly discounted rates.

With the introduction of the new E3 Media & Business Summit, our Board of Directors increased membership dues to fund the ESA’s work. In some cases the increase in dues was substantial. Without getting into specifics, which are private and specific to individual ESA members, each company pays a certain amount based on North American sales.

Do you have any sense how happy your current member companies are?

Again, I would direct you to the member companies for that answer. The video game industry is very fortunate to have an abundance of strong, innovative, successful companies. Those companies are still very much engaged and supportive of ESA and its mission. In the past year, our industry has faced serious state government challenges, including attempts to regulate the sale or distribution of video games, which we have successfully beaten back. In addition, computer and video game companies are currently enjoying great economic and critical success and ESA has been a leading force in amplifying that good news to key audiences that are critical to a robust environment for the industry. We know our members appreciate these successes and remain deeply engaged in the ESA’s activities and are supportive of our mission.

Is the exodus from ESA over or do you expect more to follow suit?

The membership of any association fluctuates over time. For example, though it didn’t receive much attention by the gamer press, in the past nine months we added four new members—Epic Games, MTV Games, NCSoft, and Codemasters. What’s important to remember is not the changes in membership rolls, but the value the ESA provides to the industry –- a proven track record of defending First Amendment rights, educating elected officials and the uninitiated about computer and video games, and creating an environment beneficial to the entire industry. I would expect that the ESA will continue to make adjustments to ensure that we are delivering the best value and highest benefit to our members in the years to come.

Our industry has changed dramatically since the association was formed 13 years ago, and it is experiencing significant growth and change today. One thing that has become very clear in my first year on the job is that the huge growth the industry has undergone – 43% revenue growth last year, the expansion of online gaming, new revenue streams and models – has given rise to scores of entities that would benefit from participation in the ESA. This overall industry growth is going to be reflected in the ESA of today and tomorrow regardless in the number of members we have on our rolls on any one day.

How unanimous was the decision by the ESA’s board to downsize E3? Were any of the now former members of the ESA dissenters?

That decision was made well before I arrived and I am not going to talk about the specific votes of individual board members. The ESA Board collectively made the decision. What I will say is that the E3 Business & Media Summit in July will display the best the entertainment software industry has to offer. And, the exclusive, invitation-only nature of the event will help ensure an intimate environment, conducive to meeting business and media needs.

How unanimous was the decision by the ESA’s board to move to Santa Monica? And to move back to LA? Were any of the now former members of the ESA dissenters?

Again, that decision was made well before I arrived at ESA, and I am not going to talk about the specific votes of individual board members. The ESA Board heard the feedback provided by exhibitors, journalists, guests, and their own staffs and decided to move the event.

Was the roughly $5 million penalty paid by the ESA to the LA Convention Center the entire cost of breaking the contract that ran through 2012 or was that only for breaking it for a year?

t’s important to note that the $5 million figure that was reported isn’t a penalty or fine assessed by the LACC. It was the cumulative one-time sum from a number of different factors—all of which are normal when moving an event.

Was the decision to move back to the LACC in anyway tied to the penalty paid, in other words did it lessen the fines?

No, the decision to hold the E3 Media & Business Summit in Los Angeles was made to meet the needs of both exhibitors and participants. It offers a centralized location for the number of activities and events occurring during the Summit and has the necessary infrastructure to support the number of attendees, staff, and personnel required for a successful Summit.

How did the ESA manage to land space at the LACC so quickly? Are you in a new multi-year contract with LACC? Did the ESA have to pay more than usually to get space in the center on such short notice?

The LACC space was available and we were able to close quickly on a contract because of our long-standing good relationship with both the city and the LACC. I’m not going to get into specifics our agreement.

Will there be an E3 next year?

Absolutely, The E3 Media & Business Summit will remain the preeminent gathering for the computer and video game industry on this continent. As we have done in the past, we will survey participating companies, members of the media and other Summit participants to learn after this year’s event and decide how we can consistently improve subsequent editions of E3 next year and in the years to come.

Is the continuation of E3 in doubt or up for discussion by the board?

See above.

In today’s state of video gaming, with the industry often being included in mainstream coverage, both as a form of entertainment and as business news, does there need to be an E3?

Yes. Remember, the E3 Summit is first and foremost about getting business done. The Summit provides key players within our thriving industry a much-needed window for high-level meetings in a business-like setting. E3 also provides a time and venue for valuable networking opportunities and dedicated time for interaction with key analysts and members of the media.

Is the board considering shifting their attentions to a new event that is open to the public, perhaps as a way of replacing E3?

To be honest with you, the ESA and our members’ E3 Summit teams are right now wholly focused on ensuring a productive, efficient, and professional experience for attendees this July. That’s where our focus belongs. As we have done following past editions of E3, we will survey various participants and, based on that input, we will set about designing the 2009 edition of the Summit.

Does the recent exodus of member companies reflect a loss in faith or of value of the ESA?

The loss of a few members reflects the individual choices these companies made for their own business reasons. There are hundreds of trade associations in Washington. Members come and go over time. The same has and is happening at ESA. We added members last year and have lost a few members this year.

ESA’s success in helping to create an ecosystem conducive to the growth and innovation we are seeing in the computer and video game industry is indisputable. Our industry is growing and evolving and these changes are going to be reflected in the ESA’s membership, mission and activities. The industry of today will likely be different than the industry of 2015. We look forward to continuing our role as the voice and face of the industry in Washington, DC and in state capitals around the nation in the years to come and carrying forward the policy agenda that promotes an environment where video games thrive now and in the future.

With first amendment and gaming issues fading away, the level of awareness in the rating system rising and E3 no longer the preeminent gaming event in the world, does there need to be an ESA?

I actually disagree with the premise of your question. First amendment issues aren’t fading away at all. In the past year we’ve seen serious state government challenges, including attempts to regulate the sale and distribution of computer and video games. We also are starting to see unconstitutional proposals that would tax video games differently than other forms of first amendment-protected material. Now, more than ever, we have to maintain our vigilance and promote the ESRB rating system, public/private partnerships, and applaud elected officials who work with us to ensure the games children enjoy are appropriate.

Look, it’s a simple equation. Unconstitutional limitations on entertainment software inhibit not only developers in what they can create, but also in the types of games consumers enjoy. Also, the tax proposals we see hurt ordinary consumers, too. The issues we’re at the forefront fighting are not just publisher or developer issues. They are challenges to the entire art and entertainment of video games.

Knowing this, gamers need to be involved in letting their elected officials know that gamers are politically active and vote. We encourage all those interested to visit www.videogamevoters.org and sign up.

ESA is the leading defender of the industry in all of these challenges. As an industry, we will continue to face challenges as we grow into new business models. As online gaming blossoms, issues of privacy, law enforcement, and helping parents to protect children will be a part of a larger discussing. ESA will continue to be the singular voice of the industry in those debates. Where foreign governments are not fully protecting our industry’s investment in innovative and creative products, ESA is leading the charge to encourage sanctions and open up new markets and opportunities. Similarly, where misguided and unconstitutional state legislative proposals are defeated, ESA will be front and center, defending the creative forces within this industry.

These opportunities and challenges have not, and in the foreseeable future will not, disappear. As our industry grows and changes the need for representation in Washington and state capitals will grow and evolve. The political battles we are fighting today could be very different form the battles we fight next year and five and ten years from now. As a result the need for the ESA will exist for many years to come.

Some anonymous company sources have expressed concern over Michael Gallagher’s leadership, they say he isn’t vocal enough and blame some of the recent issues with the industry on him? How do you respond to that?

As a matter of policy, ESA doesn’t comment on blind quotes and speculation. If they are anonymous, it shows the quality of the source. Many industry leaders have publicly endorsed the ESA mission and my leadership.

You better sit down, this gets really confusing really quickly.

Yesterday The Escapist broke the news that E3 keynoter Texas Governor Rick Perry stirred up some controversy by attending a Texas' Cornerstone Church sermon given by the Rev. John Hagee. During the service Hagee told the gathering that non-christians are going straight to hell. Perry later said he agreed with the sentiment. The story failed to mention that the sermon took place in 2006, something the Wired follow-up did explain.

Then Game Politics, a ECA site which follows the convergence of politics and gaming, picked up the story and added some commentary, calling Perry a bizarre keynote choice and asking the ESA to rescind their offer. It also said that E3 2008 was being politicized by ESA president Michael Gallagher.

In exchanges with Joystiq, Dan Hewitt, the ESA director of communication, called into question Game Politics' objectivity, pointing out that it was owned by ECA.

"If the ESA posted a blog and called it a news site, journalists would rightfully balk and it wouldn't pass a smell test. Remarkably, GamePolitics doesn't face the same scrutiny even though it's funded by the ECA and tainted with anti-ESA vitriol. At the end of the day, calling GamePolitics a news site is as laughable as saying there's a Cuban free press."

Game Politics' editor Dennis McCauley defended the site, saying he "stands by what he wrote regarding the appropriateness - or lack thereof - of having Gov. Perry deliver the E3 keynote."

Reached for comment this afternoon, Rich Taylor, senior vice president for communications and research at the ESA, had this to say:

“The ESA welcomes open, honest and frank exchanges with the media. Dan’s comments to Joystiq, which were directed specifically at GamePolitics, were an expression of frustration based on the consistently biased approach of reporting on that site. “

So two issues for the price of one: Is a religiously outspoken governor the appropriate choice for E3 keynoter? Does the fact that ESA rival, the ECA own GamePolitics call into question their objectivity.

ESA calls out GamePolitics for unfair coverage [update] [Joystiq]

The Entertainment Software Association paid more than $5 million last year to stop hosting their annual trade show in Los Angeles, only to bring their new, downsized show back to the city a year later, according to IRS documents obtained by Kotaku.

The expense of breaking a contract that locked the show in LA through 2012, along with the expected drop in E3 revenue associated with the event's downsizing, led the association's board to drastically increase their membership dues last year.

Rich Taylor, Entertainment Software Association senior vice president of communications and research, said that all of the changes made by the association, including the costly jump from LA and the increase in dues, were decisions made by the group's board, which is made up of executives from 19 of the association's 25 member companies.

"I don’t think it’s a mistake," he said. "There was a model in Santa Monica that we tried and after the event we polled participants across the board about what they thought of it and then we tried to figure out what we could do to make it better and returning to the Los Angeles Convention Center was the right decision."

But that decision, the accompanying jump in dues, may have been the impetus for three high-profile member companies dropping out of the association. Lucas Arts, Vivendi and Activision all canceled their memberships with the association in the past month. While all three companies declined to comment for this article, it is rumored that the increased cost in dues played a part in their decision to leave the association.

Taylor also declined to comment on their departure.

Documents filed annually with the IRS by the Entertainment Software Association, and obtained through open records request by Kotaku, spell out the more than $5 million dollar change of heart and its almost immediate repercussions.

According to the forms, the association paid $5,377,808 in "event cancellation fees" tied to getting out of their contract with the Los Angeles Convention Center. Those same forms show that the association's membership dues more than quadrupled in their 2006 fiscal year, which ended on March 31, 2007, jumping from more than $1 million in fiscal 2005 to more than $4.5 million in fiscal 2006.

Taylor said that the board members knew going into their decision to move from the convention center that there would be sizable fees, they also realized that it would mean what they called a shift the annual show from a "profit generating E3 to a revenue neutral summit."

"In the past the membership dues here were deflated significantly because of income that was coming from other sources including the summit," Taylor said. "Now we're closer to what other trade associations charge."

Historically, the association survived mostly on the revenue generated by the summit, but when the board decided to cut down on the size of the show and make it "more intimate" they realized revenue would drop.

Although the 2007 fiscal year ended in March, the association had not yet filed that information with the IRS and figures from the form were not yet available. In the 2006 fiscal year, which included the last of the big E3 shows, the association brought in nearly $18.5 million from the show, up about a million from the previous year. Taylor declined to say how much was brought in from last year's smaller show.

"We are still working to close the books on last fiscal year," he said.

Taylor disagreed that this year, with three well known members dropping out and the E3 Critics Awards in jeopardy, has been a trial by fire for the E3 Summit & Trade Show.

"Traditionally there have always been a lot of issues leading up to E3, this time they are just more public," he said. "This is just part of the pleasurable experience of putting on a trade show. I don’t think there is any trial by fire, I think it’s how the process works.

"Anyone who is anybody who has anything to do with the industry will be at this year's E3."

Texas Governor Rick Perry will be speaking at this year's E3 Media & Business Summit in July, the Entertainment Software Association Announced.

“Governor Perry and the E3 Media & Business Summit are both great success stories. The Governor’s keynote address is especially timely given the high concentration of entertainment software developers and publishers in Texas as well as the state’s long-standing support of our industry,” said Michael D. Gallagher, CEO of the ESA, which represents U.S. computer and video game publishers. “The Governor’s forward-thinking leadership in encouraging the growth and development of our $18 billion industry is a roadmap for other state executives who want to transform their state economies for the 21st century.”

The governor will be talking about the confluence of politics and video games, a topic that is likely to come to a head this election.

By: Brian Crecente and Leigh Alexander

Rumored developer displeasure with Entertainment Software Association president Mike Gallagher may be partially to blame for nearly half a dozen member publishers dropping out of this year's E3 conference, Kotaku has learned.

This morning we broke the news that not only are Vivendi and Activision not attending this year's E3 they've both decided to drop out of the association all together. We've since learned that NCSoft, Her Interactive and id Software have all decided not to attend this year's show, though they are all remaining members of the association.

Only NCSoft had returned calls about the decision as of press time, saying that their decision to not attend E3 this year, the first time they won't in the company's history, was due to the development cycle of their games and in no way reflects on the ESA or it's leadership.

But several industry sources who wish to remain anonymous say Gallagher is in part to blame for issues surrounding this year's E3.

Wedbush Morgan analyst Michael Pachter also believes that the drop-outs are spurred by decisions made by Gallagher, who he says is less knowledgeable and sophisticated than his predecessor, Doug Lowenstein.

"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," Pachter said. "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 t he 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."

While the ESA and Gallagher declined to comment for this story, several sources tell us that Gallagher has come under fire for what is perceived as his poor handling of the association.

In March, GamePolitics reported that the ESA shuttered its New York office, and in so doing fired that office's head, senior VP and general counsel Gail Markels. Markels, who reportedly earned $317,000 in 2005, successfully led all the ESA's litigation efforts against unconstitutional video game laws.

The ESA apparently trimmed its lobbying initiatives throughout 2007 while budgets rose, according to a report made by GameSpot on public filings. Last year, the Association spent a record $2.86 million on lobbying — even though it chose to confront fewer issues, removing lobbying on online gambling, taxation of virtual property, and Internet privacy in favor of focusing solely on constitutional, copyright and relevant trade issues.

Pachter points to the timing of this year's E3 as another mistep. He believes that the new July date just doesn't work out for Activision and Vivendi for financial reasons. Most game companies have a financial quarter that ends in June. Those companies usually have to observe a two-week "quiet period" following the end of the quarter, during which they may not speak to investors — and Pachter says that Activision is especially strict about observing theirs to the minute.

With that in mind, the July E3 is just financially inopportune for both Activision and Vivendi based on the schedules of their fiscal quarters.

"And a Vivendi that feels snubbed could be a big detriment to the ESA, Pachter said. "Vivendi's revenues are so heavily from online subscriptions, which technically don't fall under the ESA... but if ESA ever cares to represent the MMO companies, they really have to have Blizzard as part of their consortium. And there's no question that the market in 20 years is going to shift to a more heavily-utilized download model."

Activision and Vivendi, for their part, say the decision to not renew their membership in the ESA this year was purely a business one.

"After careful consideration, Activision has decided not to renew its ESA membership for business reasons and will not be participating in any official E3 activities. We appreciate the work that the ESA has done over the years in promoting the interactive entertainment industry with state and federal governments and wish the ESA best of luck with the show."

Vivendi sent a similar statement to us today. Both declined to comment about Gallagher's leadership of the ESA.

Activision did confirm with us that while they will not be attending the show, they will be holding an event on the first day of E3, though not at the convention center. Vivendi has not yet commented on whether they will be showing outside of the convention center during the show's week.

The ESA contacted us after the story went live to clarify that Codemasters will be attending E3 afterall.

We have contacted the ESA, Activison and Vivendi for comment and will update the second we hear back.

In 2006 the association announced they would be reworking the annual E3 conference after publishers complained about the expense and focus of the event. Last year it was reworked and made smaller, cutting down on the number of press and publishers allowed to attend and held in Santa Monica rather than Los Angeles. This year the event is moving back to the LA convention center but keeping the smaller, more intimate format.

ESA's New Head of State Government Relations Affairs Appointed

Washington, DC - March 26, 2008 - The Entertainment Software Association (ESA) today named Sally Jefferson as its new head of state government affairs. Jefferson's new title will be Vice President of State Government Affairs and, in this new capacity, she will advance the state and local government relations needs of companies publishing computer and video games.

"There are myriad challenges and opportunities - from constitutional concerns, tax incentive legislation, to the industry's work empowering parents with tools and information to protect children - facing the computer and video game industry on the state and local level," said Ed Desmond, senior vice president of Government Affairs for the ESA, the trade association representing U.S. computer and video game publishers. "Sally's experience, relationships, and insight are exactly what our members expect and deserve to ensure the industry is well-represented and active."

In addition to her new responsibilities, Jefferson will continue to manage ESA's relationships with national organizations representing state legislators and Governors.

"The computer and video game industry is well-served by Sally's professionalism and her high-level of knowledge and expertise," said Virginia Attorney General Bob McDonnell. "I'm confident that the ESA and its members will benefit from this recognition of her years of hard work."

A Kentucky native, Ms. Jefferson has 20 years of government affairs experience working at the ESA, the U.S. Chamber of Commerce, and as a legislative aide on Capitol Hill. During her tenure at the U.S. Chamber of Commerce in Washington DC, she was Executive Director of Congressional and Public Affairs and was its senior lobbyist primarily focused on transportation, energy and regulatory reform issues. She also was Executive Director of a chamber-led transportation coalition comprised of more than 300 national business, labor, state and local organizations.

"Sally is a very effective and dependable voice for the concerns of her industry," commented Senate Rules Committee Chairman and National Conference of State Legislatures Vice President Don Balfour of Georgia. "In dealing with state legislation, it can often be hard to navigate the personalities, politics, and issues that arise. Sally does so with great professionalism and ease."

"Sally is well-known in state and local politics for her reliable and consistent industry representation. With her wealth of experience, contacts and knowledge, I am sure the ESA's members and the computer and video game industry writ-large will be well-served by her advancement," said Nathan Daschle, executive director of the Democratic Governors Association.

Rich Taylor, a former senior exec with the Motion Picture Association of America and aide to Congressman Jim Chapman (D-Tx), has signed on as the new senior vice president for communications and research at the Entertainment Software Association.

Combing experience in both politics and with the MPAA, under famed founder and former president Jack Valenti, it sounds like Taylor is quite a catch for the ESA.

"The ESA and the video game industry are very lucky to have Rich aboard," said Michael D. Gallagher, CEO of the ESA, which represents U.S. computer and video game publishers. "Rich's expertise and extensive experience in communications are a perfect match for the investment, innovation, and creativity of the video game industry."

Taylor is replacing Carolyn Rauch who quit the ESA, where among other things she organized E3, to join the IDG, where among other things she organized the E4All Show. It's not clear yet if Taylor will have any hand in the new and evolving E3.

Video Game Industry Taps Movie Industry Executive to Head Communications and Research Department
MPAA's Rich Taylor to Join Entertainment Software Association

December 3, 2007 - Washington, DC - Rich Taylor, a former senior executive with the Motion Picture Association of America (MPAA) and aide to Congressman Jim Chapman (D-TX), is the Entertainment Software Association's (ESA) new Senior Vice President for Communications and Research, the ESA announced today. Taylor will start the ESA position in early-December.

"The ESA and the video game industry are very lucky to have Rich aboard," said Michael D. Gallagher, CEO of the ESA, which represents U.S. computer and video game publishers. "Rich's expertise and extensive experience in communications are a perfect match for the investment, innovation, and creativity of the video game industry."

Taylor served as a Senior Vice President for the MPAA, the global voice and advocate of the American motion picture, home video and television industries. During his tenure with MPAA, Taylor was the overall head of the organization's communications department under former MPAA President Jack Valenti. In that capacity, he was responsible for overseeing all aspects of the Motion Picture Association of America's press and communications efforts, while serving as the primary spokesman and senior strategist for the American motion picture industry.

"Rich will undoubtedly be a great asset to the Entertainment Software Association. Rich has spent many years in the entertainment industry and has a deep knowledge about the opportunities and challenges facing our businesses. The ESA and MPAA share many of the same goals such as promoting intellectual property rights and reducing piracy across the world. Rich will hit the ground running in his new position and his insight and creativity will be valuable to ESA, just as it was for the MPAA," noted Dan Glickman, CEO of the MPAA.

"It's a great day for the content industries to have a talented veteran rejoin our ranks. Rich is a great addition to the ESA team. We look forward to working with him and all those at ESA on issues important to the content community," said Mitch Bainwol, CEO, Recording Industry Association of America (RIAA), the trade group that represents the U.S. recording industry.

Prior to joining MPAA, Taylor was a Senior Associate with Ogilvy Public Relations Worldwide in Washington, DC. While there, Taylor spearheaded a number of national campaigns on behalf of agency clients.

The ESA is the U.S. association dedicated to serving the business and public affairs needs of the companies publishing interactive games for video game consoles, handheld devices, personal computers, and the Internet. ESA members collectively account for more than 90 percent of the $7.4 billion in entertainment software sales in the U.S. in 2006, and billions more in export sales of entertainment software. For more information about the ESA, please visit www.theESA.com.

The U.S. computer and video game industry's annual growth rate from 2003 to 2006 outpaced the US. economy's growth by 13 percent, according to a new study released today by the Entertainment Software Association.

The industry as a whole employees more than 24,000 people with an average salary of $92,300 in 2006, according to the Video Games in the 21st Century: Economic Contributions of the U.S. Entertainment Software Industry study.

"Computer and video game companies play an ever increasing role in our nation's growing economy," said Michael Gallagher, CEO of the ESA, which represents U.S. computer and video game publishers. "These companies and their colleagues across the nation are making entertainment software one of the fastest growing industries in the United States."

The report goes on to list a potpourri of interesting factoids:
The computer and video game industry's value added to U.S. Gross Domestic Product (GDP) in 2006 was $3.8 billion.
In 2003-04 and 2005-06, the industry's contribution to real growth exceeded its share of GDP by more than four to one.
The entertainment software industry directly and indirectly employs more than 80,000 people in 31 states; and, U.S. industry employees received total compensation of $2.2 billion.

Wait, the average salary is $92,000? Full release after the jump.

U.S. Video Game Industry's Growth Outpaces National Economy

New Study Details Industry's Contributions to State Jobs and GDP

NOVEMBER 27, 2007 - WASHINGTON, DC -The US computer and video game industry's annual growth rate from 2003 to 2006 exceeded 17% according to a ground-breaking study released today by the Entertainment Software Association (ESA). This far outpaces the US economy as a whole which only grew at 4.0% during this same period. According to the study, Video Games in the 21st Century: Economic Contributions of the U.S. Entertainment Software Industry, the US entertainment software industry directly employs more than 24,000 individuals and indirectly supports, with an average salary of $92,300 in 2006. The economic impact report was conducted by Economists Incorporated for the Entertainment Software Association (ESA).

"Computer and video game companies play an ever increasing role in our nation's growing economy," said Michael Gallagher, CEO of the ESA, which represents U.S. computer and video game publishers. "These companies and their colleagues across the nation are making entertainment software one of the fastest growing industries in the United States."

Video Games in the 21st Century, is the first economic study to outline the specific contributions of the entertainment software industry on the U.S. economy. The report concluded that:

The computer and video game industry's value added to U.S. Gross Domestic Product (GDP) in 2006 was $3.8 billion.
In 2003-04 and 2005-06, the industry's contribution to real growth exceeded its share of GDP by more than four to one.
The entertainment software industry directly and indirectly employs more than 80,000 people in 31 states; and, U.S. industry employees received total compensation of $2.2 billion.

The report states that California is the largest employer of computer and video game personnel in the nation, accounting for approximately 40 percent of total industry employment nationwide. These companies provided over $1.8 million in direct and indirect compensation to Californians last year. California's computer and video game industry grew by 12.3 percent last year, nearly three times faster than the state's overall growth, and added $1.7 billion to the state economy.

Other specific state findings include:

Virginia's computer and video game industry grew by 552 percent in 2006, more than 172 times as fast as the commonwealth's overall growth;

Washington state ranked second nationally in computer and video game personnel in 2006, with 9,284 direct and indirect employees at more than 59 facilities across the state; and,

New York's entertainment software companies directly and indirectly employ 4,415 individuals at more than 25 facilities across the state.

As we prepare for what is sure to be a very busy week, I did some digging around to see what Lowenstein is currently pulling in. According to the February 2006 National Journal, the political insiders' bible, Lowenstein made $620,250 in fiscal year 2004 and another $174,006 in benefits, making his total income $794,256. That year, the latest on record for the NJ, the ESA had revenues of $18, 335, 764.

While the high salary may go a long way to attract suitors for the job, I'm not quite sure who the industry and the association would want to fill Lowenstein's shoes.

The Motion Picture Association of America got their knight in shining armor back in 1966 when Jack Valenti, a political consultant for Lyndon Johnson, resigned his White House commission to become the one of the most influential lobbyists in American history.

I think instead of drawing from the industry, the ESA needs to follow the MPAA's lead and land a skilled and politicked lobbyist. Make no mistake, this will be the most important thing the ESA has ever done. Brian Crecente

At the time we tried to be cordial but essentially ended the conversation with an eloquently stated go to hell after ESA obtusely refused to recognize that not only could they not control editorial content of a website but they probably couldn't stop the creation of a t-shirt that parody's their rating system.

That seemed to end the conversation until we received this, an apology:

The ESRB Rating Icons are valuable trademarks of ESA, and we must be vigilant in protecting them against unauthorized commercial uses, lest our trademark rights become diluted. At the same time, we also understand and respect the First Amendment rights of those who, like Kotaku, disseminate news and information.

That said, we have taken a second look at this incident in light of the concerns you raised. We have concluded that Kotaku was reporting on a product in the marketplace, and is not involved in distributing or marketing this product, and thus did not engage in any conduct sufficient to trigger the issuance of the cease and desist letter we sent. Please accept our apologies, and please feel free to post this so your readers are aware of it. I am happy to discuss this with you further if you so desire.

Sincerely,

Gail Markels
Senior Vice President and General Counsel

Apology accepted, now I've got a flag to burn. Brian Crecente

One in three parents play video games, and 80 percent of those play games with their children, according to a national survey by the Entertainment Software Association. What's more, the average "gamer parent" spends 19 hours a month playing games, and half of that time is spent playing side by side with the rug rats.

I usually tell people they should never trust a survey "commissioned" by a company or an industry. It's always done to further an agenda. But the results of this survey sound about right. It's only a matter of time before the mainstream press and politicians realize that a family deathmatch is as normal as a camping trip.

Adults Playing Video Games Too [All Headline News]