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E3: ESA's Lowenstein Discusses State Of The Industry

E3: ESA's Lowenstein Discusses State Of The Industry

May 10, 2006 | By Simon Carless

May 10, 2006 | By Simon Carless
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More: Console/PC, E3



Talking at his regular State Of The Industry address before the opening of Wednesday's E3 Expo at the Los Angeles Convention Center, the ESA's Doug Lowenstein presented an upbeat message, suggesting, despite the significant issues game publishers are having with the staggered release of next-gen consoles: "Whatever occurs in 2006, and I have heard the doom and gloom, the following few years will likely be years of strong growth and stunning creative advances."

He also stated boldly: "Video games are the rock and roll music for the digital generation and Halo and The Sims and Zelda are their Grateful Deads and their Rolling Stones", going on to suggest that "...video games will have an impact on our culture because a huge segment of the country, indeed the world, will regard them as a central part of their daily life."

As part of his speech, Lowenstein stressed the longer-term ahead of any short-term transitional issues with the game business, commenting: "The truth is it's not terribly important how many units of hardware and software are sold in 2006. Don't get me wrong - it is important to individual companies -- but it is less important for the industry collectively. The real issue is how this year positions the industry for the future. That is, after all, what transitions are all about."

Lowenstein also revealed the results of a new survey conducted by J Gregory Sidak, Visiting Professor of Law at Georgetown University, and Robert W. Crandall, Senior Fellow at The Brookings Institution, on the importance of the video game business.

Relying on data reported by Price Waterhouse Coopers and their own analysis, Lowenstein announced, Crandall and Sidak calculate that U.S. sales of video games for consoles, the PC, the Internet, and mobile platforms reached $10.3 billion in 2004. In addition, above and beyond software sales, it's estimated that the video game industry stimulates an additional $7.7 billion in spending each year in the U.S. alone, bringing the total economic impact of the game industry on the U.S. economy to $18 billion.

According to Sidak and Crandall, relying on standard Bureau of Economic Analysis (BEA) formulas, the $8.2 billion in video game sales in 2004 means that the video game industry supports 144,000 jobs nationally, a figure they forecast will grow to 265,000 by the end of 2009. Moreover, many of the jobs created by the video game industry are high skilled and highly compensated. Typical entry level video game industry jobs pay $50,000 or more, well above the average paid to typical college graduates.

The ESA exec concluded in philosophical form, by heralding "...the transition from video games as pure entertainment to video games as a central feature in the economy and business and education of America." More information on the speech, including its full text, is available on the official ESA website.


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