Thank you, Congressman for that warm welcome and thank you to our hosts for putting together such a great event
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- INDUSTRY REVENUE
- VIRTUAL REALITY
- INDUSTRY PRESENCE MAP
- GAMES AND OTHER MEDIA
- ART AND VIDEO GAMES
- E-SPORTS AND EDUCATION
- ESA FOUNDATION
- GAMERS AND THE ELECTION
- ISSUES LIST
- CONTACT US
| INTRO:
Thank you, Congressman for that warm welcome and thank you to our hosts for putting together such a great event. Before I start, I want to take a moment to recognize Congressman McGovern for serving as a champion of our industry ever since he arrived on Capitol Hill. As a founding chair of the Congressional Caucus for Competitiveness in Entertainment Technology – the E-Tech Caucus – he has lent his voice to ensuring that everyone knows the positives video games bring to our society. We are grateful for his leadership and count him among our most trusted friends. Today I would like to talk to you about the state of the video game industry – where it has been, how it has evolved, where we are headed and how everyone in this room can get involved. No other entertainment industry has achieved the same technological advancements or interactivity as computer and video games in the past 40 years. As aspiring industry leaders, it is important to understand this landscape and appreciate both our opportunities and our challenges. INDUSTRY REVENUE: Today, video games are a $23.5 billion industry – up from $22 billion in 2014. Gone are the days when you could only buy games in a brick and mortar shop. By show of hands – who has purchased a social or mobile game? You are not alone. Not surprisingly, our industry is moving to a digital format, which is transforming the way people buy and play games. According to The NPD Group, digital format sales accounted for more than half of all industry sales in 2015. Riot Games, the developer of the popular online game League of Legends, reports that 27 million gamers play League of Legends each day. Monthly, the game attracts more than 67 million players. Paid mobile apps continue to represent significant opportunities for our industry. In the two weeks leading up to the New Year, customers spent more than a billion dollars on apps and in-app purchases. New Year’s Day 2016 marked the single biggest day ever in Apple App Store sales history. According to Distimo, game developers represent the majority of top publishers in all three major app stores – the Apple App Store, Google Play, and the Amazon App Store. Digi-Capital recently forecast that global game sales would grow from $90 billion in 2016 to more than $115 billion in 2020. VIRTUAL REALITY: Not only has the way consumers buy and play games changed, but also how people play. Most recently, our industry has earned recognition for impressive developments in virtual and augmented reality and wearable technology. Oculus VR plans to release the Oculus Rift virtual reality head-mounted display this year. This groundbreaking technology features immersive wraparound graphics and smart head-tracking technology that enable players to feel as though they are inside their favorite games. Microsoft also plans to launch its HoloLens. Unlike fully immersive virtual reality devices, the HoloLens creates holograms layered on the physical world, allowing users to fully interact with and manipulate different objects. Sony has announced plans to release its PlayStation VR headset for purchase this year. The headset is designed to be fully functional with PlayStation 4 and PlayStation Vita systems, and it will generate two sets of images – one for the headset and one for a TV – so that gamers can share their experience. Magic Leap, one of ESA’s newest members, recently closed Series C funding with nearly $800 million from companies including Alibaba, Google Inc., Warner Bros., and J.P. Morgan to develop its revolutionary Mixed Reality Lightfield. The new retinal display seamlessly blends both digital and physical worlds by superimposing 3D images over real-life objects. Digi-Capital projects AR and VR could reach $150 B in revenue by 2020. INDUSTRY PRESENCE MAP: More than 1,600 video game development studios and publishing companies operate nearly 2,000 separate video game facilities nationwide and employ nearly 150,000 individuals. Nationally, these jobs, which are growing at a rate of 9 percent annually, carry an average annual compensation of $95,000. In Massachusetts alone, there are 92 different developers and publishing companies. These businesses directly and indirectly employ more than 4,000 people and add nearly $180 million to the state economy. These companies have given us industry classics like Borderlands, BioShock, Guitar Hero and Rock Band. The Bay State is not just a setting for post-apocalyptic Vault dwellers and their trusty four legged companions – it is ground zero for some of the most creative and innovative games in our industry. These high-tech advances, stunning innovations that create new opportunities for consumer engagement. That is why our industry continues to expand and evolve at a time when other industries are contracting or struggling. Our growth even outpaces that of the overall U.S. economy. GAMES AND OTHER MEDIA: Our art form isn’t confined to our products. It’s showing up everywhere across the arts and media landscape. Hollywood draws on video games for movie subjects that lure fans to the box office. Film adaptations of Assassin’s Creed, Angry Birds, The Last of Us and World of Warcraft are all slated for release this year. And, now actors are increasingly recognizing the influence of taking starring roles in games. ART AND VIDEO GAMES: Symphonies, orchestras and philharmonics are performing full concerts of video game music, both acknowledging the soundtracks’ artistry and attracting younger audiences to boost lagging ticket sales. Increasingly, art galleries and museums are featuring video games in their exhibitions. “The Art of Video Games,” a Smithsonian Institution-curated exhibition that we proudly supported, just completed its 10-city national tour. The Whitney and the Museum of Modern Art in New York are among other distinguished institutions that have featured games. E-SPORTS AND EDUCATION: Video games have also given rise to a new sports form – eSports. 32 million people watched a recent League of Legends tournament – more than the number of fans who watched the 2014 NCAA men's basketball championship and Game Seven of the World Series. More than 10,000 students now play in the biggest college league, 4,400 more than last year and 4,600 more than the number of men who play Division I college basketball. Last year, students from the University of Massachusetts-Amherst flew to Seattle to compete in a Hearthstone tournament. And other schools, such as Boston College and Boston University, are making waves too. We are working to push games in new and exciting directions. We partnered with the Department of Education and Games for Change to launch the first Games for Learning Summit in New York City, bringing together leading developers, publishers, policymakers, educators, and students to identify strategies on how to better create, distribute, and use quality educational games both in and outside the classroom. National STEM Video Game Challenge, an annual game design competition that challenges students and developers to create original games that stimulate interest in science, technology, engineering and math. According to a recent survey, 28 percent of Millennials report watching others play video games on YouTube. That makes video game play the top-performing user-generated content that young people consume. HEVGA Today, more than 400 schools – operating in all 50 states and Washington, D.C. – offer professional certificates and undergraduate or graduate degrees in game design and development. This tally – a high water mark for the industry – has grown steadily for six consecutive years, increasing by 64 percent since 2009. Here in Massachusetts, a dozen schools join Becker – including Northeastern University, University of Massachusetts, Dartmouth and MIT – to offer video game-related programs. ESA fostered this growth by establishing partnerships with the academic community. The Higher Education Video Game Alliance is creating a platform for higher education leaders that underscores the importance of video game programs at colleges. What began as a 20-member consortium of U.S. colleges and universities now comprises 180 universities worldwide. HEVGA found that 93 percent of game program alumni are gainfully employed one year after graduating. 9 in 10 respondents classified as “thriving” in their workplace on the Cantril scale, a well-being assessment measure widely used by researchers. ESA FOUNDATION We also strive to support college and university students through the ESA Foundation, our industry’s philanthropic arm. The ESA Foundation offers a scholarship program to assists women and minority students who are pursuing degrees and careers in computer and video game arts. This year’s students hail from 16 states and Puerto Rico and attend 26 schools. Since 2007, the ESA Foundation has awarded nearly $700,000 in scholarships to more than 230 students, several of whom studied here at Becker. In fact, our scholarship application period is open right now, until April 1. If you are studying to join our creative industry, I encourage you to apply today. The ESA Foundation also provides grants to more than 50 schools and nonprofit organizations that are dedicated to using video games to enhance education, healthcare and social awareness. The Becker-based Massachusetts Digital Games Institute (MassDiGI) was one of our grantees. Two years ago, we supported MassDiGI’s annual Game Challenge, which helped aspiring game designers create games. The ESA Foundation also supported the launch of the MassDiGI 101 program, which included numerous workshops to provide students and teachers with information about how to bring game design and computer programming into the classroom. Our grant program also supports Children’s Miracle Network Hospitals through Extra Life, an annual 24-hour video game marathon and fundraiser. The most recent Extra Life event raised more than $7 million, an all-time high that pushed total fundraising to an incredible $20 million. These critical funds help Children’s Miracle Network provide outstanding pediatric health care to every child in need, regardless of their family’s ability to pay. Extra Life is an amazing fundraiser, one that’s easy to be a part of. I encourage everyone here to take part this year. E3: Other ESA programs offer students real-world experience and open doors for them to begin their careers in the video game industry. For the last three years, ESA and the Hispanic Heritage Foundation have sought to foster young people’s passion for game technologies through the ESA LOFT Video Game Innovation Fellowship. This fellowship challenges young people to develop video games as a way to address social issues impacting their communities, helping them build the skills necessary for coding, software development, cybersecurity and other in-demand talents at the same time. This summer, we plan to host the fourth annual E3 College Game Competition – a program that challenges teams from colleges and universities to submit their own original video games to showcase on our industry’s biggest stage. The schools with the best designs, as selected by a panel of industry veterans, have the opportunity to display their games at E3. Last year’s winner, DigiPen, took home the prize for RumbleTV, a multiplayer action game in which players must work together to overcome opposing teams. GAMERS AND THE ELECTION: Finally, with an election year upon us, we have also sought to get a better understanding of video game voters and their political leanings. Video game players are more politically engaged than most Americans and 100 million of them will vote in next year’s presidential election. These findings are hardly the only – or the first – indicator of gamers’ strong political engagement. VGVN: This online community, which includes 14,000 Massachusetts members, helps to protect the First Amendment rights of video games; promote games’ positive aspects; and battle negative stereotypes. At universities across the country, VGVN also manages a college outreach program that provides student leaders – called VGVN College Ambassadors – with online resources to take ownership of VGVN locally. All told, VGVN members have sent 2.5 million letters, emails, tweets, and Facebook posts to their members of Congress and to state elected officials to speak up for their rights. ISSUES LIST: Once upon a time, our industry mantra used to be “we didn’t do it and please don’t steal our stuff.” Back then, we only worried about a few issues. Now, we are active in more than two dozen issue areas. And we have a new mantra: “Look at us and look how we’re changing the world.” We’re a made-in-America high-tech engine. New products like augmented and virtual reality and an increasingly connected and globalized world will bring exciting new opportunities, but will likely pose new challenges and raise old ones. Today we engage on everything from state tax issues to intellectual property to international trade – issues that have important implications across business models and game platforms. If, for example, a developer creates children’s games – particularly online or mobile games – they need to be mindful of data tracking issues and be aware of the Federal Trade Commission’s updated Children’s Online Privacy Protection Act rules. Ensuring compliance with these regulations is critical, and that is something we help with. If games have a virtual currency component, potential money laundering and consumer fraud risks could prompt federal and state regulators to take a closer look at these currencies. Many have tried to walk a fine line between encouraging further development of this novel payment option and putting in place safeguards to protect against abuse. We are working with lawmakers to help ensure that these new rules are not written so broadly that they encompass play currencies that have no real-world utility. Strapped for revenue, a number of states are trying to impose new taxes on entertainment products and technology services, including streaming and cloud computing, that pose challenges for our industry and entertainment more broadly. ESA is following this issue closely. We have also worked to oppose marketing and right of publicity regulations in a number of states. In fact, ESA played a significant role in securing gubernatorial vetoes of such laws in Arkansas, New Hampshire and Utah. As you can see, we are already hard at work tackling these issues. But the work must continue. The mission isn’t over. We must be constantly vigilant, and continue to demonstrate our leadership and our willingness to work with policymakers. And our strength and success depend on the continued support of our entire industry, past, present, and future. Through VGVN, you can join us in the trenches on the policy issues set to impact the future of our industry, our art, our technology. CONTACT US: Whether you have already worked in the video game industry or your career path is just beginning, you are at the center of an exciting moment in our industry’s history. Our companies boast some of the most advanced minds in the technology sector. We have a diverse and expansive global audience. And industry artists push the entertainment envelope. We are continually leveling up. I look forward to many of you joining us. Thank you for having me here today. I am now happy to take your questions. 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