BREAKING (UP): Activision and Vivendi Jump Ship From ESA

May 2, 2008 -

The Entertainment Software Association, the trade association which represents US game publishers, is losing Activision and Vivendi as member companies.

UPDATE: We've just received confirmation from the ESA. Rich Taylor, ESA Senior Vice President of Communications and Research, issued the following statement:
 

While the Entertainment Software Association remains the preeminent voice for U.S. computer and video game publishers, we can confirm that Activision and Vivendi Games opted to discontinue their membership.

The ESA remains dedicated to advancing our industry’s objectives such as protecting intellectual property, preserving First Amendment rights, and fostering a beneficial environment for the entire industry. Our high level of service and value to members and the larger industry remains unchanged.


We began working on this story this morning after reading online reports that Activision would not be exhibiting at E3 in July. Beyond that information, GamePolitics observed that the ESA's new website lists neither Activision or Vivendi as member companies.

The two game publishers, of course, are in the process of merging into Activision Blizzard. The reason for their decision to leave the ESA remains unclear at this point. Also unclear is whether any additional game publishers may defect from ESA member ranks.

The loss of two of its larger member firms will likely have a significant impact on the ESA's revenue base. In addition to its own operations, the ESA funds E3, the Video Game Voters Network, the Academy of Interactive Arts & Sciences and the D.I.C.E. Summit. Any or all of those entities could feel the repercussions from the ESA's loss of member revenues.

UPDATE 2: We've got comment from Activision now:
 

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.


UPDATE 3: Kotaku is reporting that four more publishers (NCSoft, Codemasters, id and Her Entertainment) won't participate in E3, although they are not dropping out of the ESA). Kotaku also has quotes from Wedbush-Morgan's Michael Pachter, who blames ESA president Mike Gallagher for the current issues with the publishers:
 

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. 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 the 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.

 


Comments

@Gray
OK then. I think maybe you misunderstood the point of my post (the first one you responded to). Thanks for sharing your opinions about E3.

Lol I fuckin hate Acronyms. I'll stick with PS2, GBA, DS, and try to memorize the names of companies from now on.

So what would effectively be the largest PC publisher in the world and the second largest console publisher is now splitting from the ESA? I'm left scratching my head as to why.

----
Papa Midnight

I hope they are ready for backlash from their ONLY demographic...

As a WoW-player, my Spidey-Sense is tingling.

I really hope the merger doesn't tank the game utterly... Not that it's been doing well of late with the huge Arena focus.

Either they'll rejoin as Activision Blizzard or they didn't want to spend money on the ESA.
And with that i mainly mean E3, which is nowhere near as interesting as it used to be for a games publisher since it was closed to the public.

That the rest of the activities of the ESA suffer as a result of that, is an unfortunate side-effect.

Does this mean anything about their games and the ESRB? I take it they will still be submitting them for rating.

This seems very odd...

Yes - the retailers require an ESRB rating, so even non-members get the games rated.

@Zerodash

assuming the ESRB works in the same way as PEGI does in europe, then a publisher is required to submit a game for rating if they want to release it within the jurisdiction of the relevant rating system (the ESRB in this case).

I can only see it as a way to rejoin back as a single entity like one poster stated, but I rather wait to hear word from the publishers as to why they left.

[...] wrote an interesting post today onHere’s a quick excerptThe Entertainment Software Association, the trade association which represents US game publishers, is losing Activision and Vivendi as member companies. UPDATE: We’ve just received confirmation from the ESA. Rich Taylor, ESA Senior Vice President of Communications and Research, issued the following statement: While the Entertainment Software Association remains the preeminent voice for U.S. computer and video game publishers, we can confirm that Activision and Vivendi Games opted to discontinue their membership. The ESA remains dedicated to advancing our industry’s objectives such as protecting intellectual property, preserving First Amendment rights, and fostering a beneficial environment for the entire industry. Our high level of service and value to members and the larger industry remains unchanged. [...]

I saw the E3 thing on Gamasutra this morning, I was wondering when it would pop up here. Now I see why there was a delay.

This bothers me, for a few reasons. First, I don't think they're planning to rejoin as AB. We wouldn't be hearing about it if that were the case... and, they wouldn't be running a competing (leeching) show of their own against E3 this year.

@ Azhrarn

or they didn’t want to spend money on the ESA.
And with that i mainly mean E3, which is nowhere near as interesting as it used to be for a games publisher since it was closed to the public.


On the contrary, since E3 was "rescoped" after 2006, they can't spend much money on E3 anymore. But by splitting with the ESA and starting their own trade show, they are free to make it as overboard as they like, focus all the media attention on themselves, throw it open to the public again, and basically corner the market on what used to be the single greatest source of annual hype and showcasing in the industry. Who wants to go to E3 anymore, which was considered a flop last year, when we could instead go down to BlizzVisionCon, which has all the bells and whistles (if not the variety) of E3's "golden age"?

And all for the low price of monetarily cutting off the ESA (and it's dependents which Dennis mentioned in the article) at the knees. I'm worried, to be honest, how this will trickle down. A cut in funding is not something the ESRB needs right now, especially with all the (jackass) media pressure for them to be stepping up operations, not scaling them back.

Does the ESA fund the ESRB? The post doesn't reflect that, so I'm curious.

Does the ESA have progressive revenues? That would be messed up, and also explain why a big guy like Activision and Blizzard would opt out.

Wow, brianfart, membership dues, not revenues

@ Mark

Does the ESA fund the ESRB? The post doesn’t reflect that, so I’m curious.

I've read it in other industry news articles that the ESA provides the ESRB's funding, I'd guess it comes from membership dues. It came up back when that whole kerfuffle about "the game makers paying the people who rate their games == dishonest ratings and scandals" was happening.

Um, I would love to know the reason. As long as the government is not rating the games, I don't care who does it. Those people that think the ESRB is dishonest can suck it, they can't be in our club.

I was under the impression that the ESRB is funded by the fees from the games they rate.

~~All Knowledge is Worth Having~~

I actually don't know how the ESRB gets their funding. If it's from the ESA, this could be a significant development. If not and the funding comes from fees for doing the rating (their job), then this shouldn't have too much of an impact.

I am curious, though, to see where this goes. As far as I know, all games in the US have to be rated by the ESRB in order to appear on any of the major consoles. I think that's part of the console maker's demands for allowing a game on their system. As such, if funding comes from rating the games, little to no impact. If funding comes from the ESA...

Oh well, I'll be watching and seeing. Something about this seems odd and I hope it doesn't become ominous.

@~the1jeffy

I believe its a bit of both. Getting a game rated costs around a grand or two. While that may cover the costs of the rater's time, there's still all the administrative costs and salaries, not to mention marketing and legal costs from constant court battles.

[...] Several outlets are reporting that Activision have upped and left the ESA, which is the industry’s trade association. If this is true — and it’s starting to sound it — this could have major repercussions for the ESA, the ESRB (which is funded by the ESA) and even Activision. What makes this news worse for the ESA is that Jim Sterling over at D’toid hints to the possibility of other publishers leaving the organization. [...]

"Our high level of service and value to members and the larger industry remains unchanged."

What level of service, I wonder? I've never seen the ESA go to bat AT ALL when a member publisher is being assailed in the media or courts. They ALWAYS dodge the issue.

@ AM

That are my thoughts as well. Maybe Activision and Vivendi decided that the ESA just wasn't worth the trouble of all the dues.

As a prospective small developer, the ESA has never appealed to me. Their stances on several key issues do not meld well with my thoughts on those issues.

We will see how this goes.

As for the ESRB issue. I believe they get their primary funding from ratings fees. I have not heard anything about any funding from the ESA.

[...] We will be digging to get to the bottom of this (and trying to crack it before Dennis does). It is down to Activision to explain the reasons behind its departure, and we shall try to get such an explanation. [...]

Can't wait to see how this pans out.

I won't be surprised however if the ESA tries to bury the company or tries to block them from getting their games rated.

Since the ESA joined the RIAA my trust for them is gone

I wonder how long it's going to be before EA tries to take over both Activision and Vivendi

Doesn't GP Usually list something about the ESA being it's parent company relevent to the situation or not nya?

That is the ECA champ, though round here people seem not to see the difference

No Catboy, the ECA is what owns GP. ESA is for software developers, but they don't represent indies, just major developers.

I have to quote the G-man on this one, "Prepare for unforseen consequences."

Hmm, I forsee Microsoft and then Squenix joining the bandwagon and some much more interesting cons being announced. Not that I'm an expert or anything, this is just my opinion.

I think its just oversight they forgot or were late rejoining or want to join under their new name.

I do not think they will join or crate a new publisher association.

Hmm, interesting. I'm certain this isn't to rejoin as Activision Blizzard; they wouldn't need to leave the ESA for that. If they do rejoin, it'll be because something persuaded them to do so, not because they're currently planning to do so.

At a guess, I'd say that they got tired of paying to be members of the ESA, while the ESA doesn't seem to be doing much for them. The ESA's aligned itself with two of the most hated organizations on the planet, has done nothing to defend member companies from slanderous attacks in the news, and managed to more or less kill the hype surrounding E3.

Not exactly big incentives to keep paying up for the membership.

Since ESA has been pretty much recently turned into a RIAA of the game industry (like kurisu7885 noticed), I just can't stop reminding myself of how EMI planned to break itself from RIAA, or something like that.

[...] We will be digging to get to the bottom of this (and trying to crack it before Dennis does). It is down to Activision to explain the reasons behind its departure, and we shall try to get such an explanation. [...]

The ESA isn't like the RIAA; yet. They are getting close though, however the fact that a major company opts out of membership which does such things like screwing over customers (which many companies DO prefer), it is surprising to see them leave.
I think dues probably got higher as a result of their merger, or it is possibility difficulties as the result of the planned merger. It probably takes too much time to pay dues when they are focusing on the assets of the companies being combined into one.
Them rejoining is a possibility still. If its to cut expenses, then it really varies if they want to rejoin for more lobbying or to say their lobbying isn't effective. As it stands, everything is hearsay until we hear from Activision/Blizzard. This isn't likely to affect development on games at all, just E3 and the ESA.
The ESA will be the RIAA once they start suing their customers and start pushing indies out of competition (has that happened, Zach Knight?). I haven't heard of a case yet, but wouldn't be surprised if one happens soon because of modchips, EULAs, DMCA, etc.

[...] wrote an interesting post today onHere’s a quick excerptThe Entertainment Software Association, the trade association which represents US game publishers, is losing Activision and Vivendi as member companies. UPDATE: We’ve just received confirmation from the ESA. Rich Taylor, ESA Senior Vice President of Communications and Research, issued the following statement: While the Entertainment Software Association remains the preeminent voice for U.S. computer and video game publishers, we can confirm that Activision and Vivendi Games opted to discontinue their membership. The ESA remains dedicated to advancing our industry’s objectives such as protecting intellectual property, preserving First Amendment rights, and fostering a beneficial environment for the entire industry. Our high level of service and value to members and the larger industry remains unchanged. [...]

I'm just not sure if this is a good thing or not. I'm no fan of the ESA and their lack of any kind of support to its members in any of the recent goings on oly makes me dislike them more. On the other hand, they are a group that is established and just needs a kick in the pants to get a move on some of these issues. However, the fact that they are more concentrated on copy-protection and piracy issues rather than keeping the industry at large healthy is another cause for concern.

I just don't see what Blizzard/Activision could be up do other than copping out of E3 and blowing up BlizzCon into the "E3 replacement" which many other conventions have been fighting for. Good for Blizzard/Activision because they would have complete control over the event, but bad for consumers because we're only going to hear about their projects and the indie developers and even other big companies get the shaft.

What the hell are they up to?

Guess it's a waiting game 'till Dennis has more figured out.

As Kotaku and GP recently reported now, is part of what I was suspecting, that it is a time constraint on their assets for their investors to have E3 at a time near the quarter. The surprising moment is what kotaku reported that some industry insiders feel things are bad with Gallagher leading things.
I feel this will result in more budget cuts on lobbying since they already made a cut into the New York office by shutting it down, and without dues coming from these two, it'll likely have more cuts on the lobbying budget; and this doesn't bode well at all if legislation keeps popping up repeatedly.

As a WoW-player, my Spidey-Sense is tingling.

I really hope the merger doesn’t tank the game utterly… Not that it’s been doing well of late with the huge Arena focus.


Blizzard maintains that, much like they're still a separate entity under the Vivendi Games name, they'll still remain a separate entity from Activision Blizzard. The merge is technically between Activision and Vivendi Games, with Blizzard still being owned by but separate from the resulting company, if I'm understanding everything right.

I don't quite understand some of the comments here blaming the ESA for not serving its members well enough. Some seem to be judging the ESA from a gamers' perspective, not from a publisher's perspective. The ESA is an organization for major game publishers, formed to serve the common interests of major game publishers (not developers, and certainly not consumers or journalists like us). Its primary purpose is to help all publishers make more money selling games, not to defend individual publishers against individual bad press.

After all, what good would it really do for the ESA to respond to every crackpot anti-game comment that gets printed or posted online? I'm pretty sure the mainstream would pay more heed -- not less -- to bad editorials, if the publishers' association lowered itself to respond to them individually, instead of simply ignoring them as sensationalism.

I'm not sure why Vivendi decided it didn't want to be an ESA member anymore, but I'd guess it has nothing to do with the organization's lack of public response to overzealous watchdog groups or fringe blowhards like JT. I'd also be sort of surprised if it really has too much to do with the ESRB or E3 either, since non-ESA members are still welcome to host booths at E3 and have their games rated, and (as far as I know) ESA members are under no obligation to host booths at E3 or have their games rated.

@JC
Isn't E3 always held at "a time near a quarter"? Also, so far at least, I don't think lobbying has had anything to do with anti-game legislation. The ESA has hired some expensive lawyers to challenge the laws, but it's also sued states to recoup their cost. As far as I understand, more of the ESA's time and money is spent on anti-piracy than anything else.

I'm a little foggy on what the ESA does, what the ECA does (I had mistakenly thought they were the same), where the bad press is coming form, what they've done, what they were supposed to do, and stuff like that.

''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 the shelves, you would hear Lowenstein immediately shoot back. ''


BINGO!

its a bout bloody time too that the industry took notice of this!

I'm not sure I agree totally with Pachter's theory. Lowenstein was a coward who only would fight back against anti-games nonsense in weak, half-hearted ways.

Barrack Obama never said videogames were corrupting the youth, that I'm aware of. He did say kids need to spend more time on other things besides videogames and tv, like schoolwork and such.

Can't help but wonder if this is at least partly motivated by the ESA's recent statements regarding such things as Net Neutrality?

@Azhrarn, Death-of-Faxmachines:
assuming the ESRB works in the same way as PEGI does in europe, then a publisher is required to submit a game for rating if they want to release it within the jurisdiction of the relevant rating system (the ESRB in this case).


But it isn't. ESRB ratings are strictly voluntary, the developers voluntarily submit their works to be given a rating, but nothing is strictly requiring it -- because ratings in the USA (movies or games, or I think any other kind of media I know of offhand) are not by law. Now, a company that doesn't have its games rated could end up with no retailers selling it, and I believe the console makers will not let them on the consoles (Nintendo's notorious for that one, I believe Sony and Microsoft too). So, there is pressure to get a rating, it just is not mandated/absolutely required.

Yeah, as near as I can tell, the ratings are voluntary in that there is no law requiring them to be rated. It's just that the console makers WANT ALL of the games on their systems rated, so the game makers have them rated by the ESRB.

More of a "You don't have to have your game rated...but you have to have your game rated if you want anyone to play it on a major console."

@Stinking Kevin

We're wondering about companies being dissatisfied with the ESA because there is some question of how well they've served their member companies. Kotoku's got an article that includes some of the criticism here: http://kotaku.com/5007647/six-publishers-drop-out-of-e3-this-year-some-b...

@Noveblack
About time "the industry" took notice of what? Pachter inventing fictitious examples of Lowenstien's congressional crusading, or kotuku reporting it as if it were news?

@Gray17
Notorious quotewhore Pachter comparing his first-name-basis pal "Doug" to "the new person...whose name completely escapes me" is interesting, in a gossipy sort of way, but it offers no facts and is not really news.

I often enjoy the controversies Pachter stirs up, and I really like kotaku alot, but I haven't put too much stock in this reporting so far. The "criticism" you mention is all pure speculation, based on anonymous sources and the Pachter quote, isn't it? Maybe there's more too it, maybe not.

I would not be surprised if some ESA members are dissatisfied, or even if they were dissatisfied with Gallagher in particular, but I doubt this dissatisfaction has very much to do with Gallagher's failing to defend GTA against some MADD press release (or any other such consumer-perspective anecdote).

Ya? ID can go suck a wet one they has been out of the game loop for years, they have become nothing but a vain engine builder for zombies.

NCsoft, Codemaster and her(even ID) probably can't to go to E3 its not benfinail to them anymore and the costs are not worth it, they need to pour money into deving half arsed titles.....
 
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