G4C13: ESA's State of the Industry


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When the entertainment software industry partners with government agencies and nonprofit entities, they encourage the use of video games as tools to strengthen our society and improve our lifestyle. Erik Huey of the Entertainment Software Association discussed this during the State of the Industry session.

Erik Huey - Senior Vice President for Government Affairs, Entertainment Software Association

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G4C13: ESA's State of the Industry

  1. 1. Games For Change The Ever-Evolving Industry Erik V. Huey Senior Vice President of Government Affairs Entertainment Software Association June 19, 2013
  2. 2. The Entertainment Software Association Serves business and public affairs needs of U.S. computer and video game publishers • More than 35 member companies • Activities include: • Business and consumer research • Government relations • Legal and policy advocacy • Content Protection • Domestic and international IP policy • Technology Policy • Also operates E3, Video Game Voters Network, ESA Foundation
  3. 3. Diverse Consumer Base • The average gamer is 30 years old • 45% of all gamers are women • 20% of gamers are over the age of 50 • Connected play – 62% of gamers play games with others, either in- person or online. • Cross generation play 45%45%45%
  4. 4. Americans Spending More Time Playing Video Games • Doubled in a decade from an average of 72 hours per year in 2002 to an average of 142 hours per year in 2012 • 49% of gamers are watching less TV • 47% of gamers are spending less time at the movies 45%45%45%
  5. 5. Creating Next Generation Digital & Creative Economy Jobs Entertainment software is one of the fastest growing industries in the U.S. economy • 381 colleges, universities, art and trade schools across the country offer courses, professional certificates, undergraduate or graduate degrees in video game design, development and programming • The Princeton Review’s report, "Top Schools to Study Video Game Design for 2013," ranks the top undergrad and grad schools with video game design programs
  6. 6. No Longer a Niche Industry • $21 billion domestically (2012) • $65 billion worldwide in sales (2012) • $83 billion worldwide in sales (2014) • More than 40 million people subscribe to Xbox Live and more than 90 million on Sony’s PlayStation Network worldwide • Mobile game sector generated $8 billion in sales in 2011; growing to $13 billion by the end of 2013. • 67% of U.S households have video game consoles • Call of Duty: Modern Warfare 3 set launch records • Sold more than 6.5M units in the US and UK within its first 24 hours • Grossed $1 billion in 16 days; Avatar took 17 days • Call of Duty franchise set opening day records three years in a row
  7. 7. U.S. Computer and Video Game DOLLAR Sales Growth Dollars in Billions Source: The NPD Group/Retail Tracking Service; Game Industry: Total Consumer Spend * Figures include total consumer spend ** Other delivery formats include subscriptions, digital full games, digital add-on content, mobile apps, social network gaming, and other physical delivery. 2000-20008 figures are sales of new physical content at retail exclusively.
  8. 8. Connected Play Takes Off • Call of Duty: Black Ops II generated 1.2 billion hours played online since November 2012 • FIFA Soccer 13 sold 7.4 million physical copies, generated $115 million in digital sales • World of Warcraft had 9.6+ million monthly subscribers in 2012, generated more than $1.7 billion • Players download digital titles, stream games, and connect to social networks through digital distribution networks
  9. 9. The App Economy • Game play is the third most popular activity on smartphone and tablet devices • Tablet users spend 67% of their time playing games, mobile users 43% • More than the total amount of time spent watching videos, listening to music, checking email, engaging on social network sites, and reading magazines or books
  10. 10. Emerging Business Models • One in four consumers spent money on virtual goods in 2011, with gamers spending an average of $64/year – a 100% increase from 2009 • SuperData Research predicts the worldwide market for virtual goods will exceed $20 billion by 2015 • 110 million people are playing more free-to-play games than they were a year ago • Free-to-play games convert between 5% and 10% of their active player base to paying customers
  11. 11. The App Economy • Game sales accounted for nearly 80% of all 2012 revenue generated by apps • 76 of top 100 grossing iOS apps were games in 2012 • Overall app market will grow to $50 billion by 2015; mobile games market to reach $18.3 billion in 2016 Source: App Annie, 2013
  12. 12. The Future of Video Games • Increased social interaction • Communities are building around games; ecosystem of interconnected users • Casual / mobile gaming is on the rise • 24 of the top 25 apps are games • Angry Birds has been downloaded 1.7 billion times. The free version earns $1 million a month from ads. • Over 40% of time on Xbox Live is not spent playing games • Games are now a service, not just a static product • Streamed movies • User-created content • Seamless cross-platform experience
  13. 13. Rating Category Breakdown
  14. 14. Ratings Awareness & Use
  15. 15. Praise for Industry’s Self-Regulation According to a 2013 Federal Trade Commission report, video game retailers are the strictest and most effective in enforcing age rating policies • Retailers prevented 87% of underage purchases • “The ESRB continues to lead all three industries [movies, music, and games] in providing clear and prominent disclosures of rating information in television, print, and online advertising.” • 100% compliance at Target
  16. 16. FTC Mystery Shopper 2000-2013
  17. 17. Our Shared Story Video games have proven their positive impact, yet more can be accomplished together E-TECH Caucus on Capitol Hill now boasts 60 members Amplified efforts and collective creative strengths can shape our country’s future
  18. 18. More than Entertainment • An ESA survey found that 70% of Fortune 500 businesses, associations and nonprofits use games and interactive technology to train and recruit employees • Doctors use Re-Mission 2 to teach young cancer patients about the disease • The Department of Defense uses Virtual Iraq to treat Post-Traumatic Stress Disorder • Foldit: Solve Puzzles for Science • Half the Sky Movement Organizations across all sectors now view video games as an effective tool
  19. 19. Bolstering Education • MacArthur’s Games for Change Challenge • National STEM Video Game Challenge rewards students and developers for creating games to strengthen STEM learning • Apps for Healthy Kids Challenge • Fostering dialogue – ESA’s “Games & Learning Roundtable” & The Atlantic’s “Technologies in Education Forum” • GlassLab • College Game Design Competition
  20. 20. Health & Fitness • Video games promote physical activity and healthy habits • Active games are a fun and exciting way to stay in shape • Active Play PALA+ Challenge with the President’s Council on Fitness, Sports & Nutrition
  21. 21. Video: Active Play PALA+ Challenge
  22. 22. Games For Change The Ever-Evolving Industry Erik V. Huey Senior Vice President of Government Affairs Entertainment Software Association June 19, 2013