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Michael Gallagher (left), CEO of the Entertainment Software Association, which represents a number of US video game publishers, has commented on a bill introduced in Congress earlier this week.

The Video Games Rating Enforcement Act, proposed by Reps. Lee Terry (R-NE) and Jim Matheson (D-UT) would require retailers to conduct ID checks on buyers of games featuring mature content. Of the measure, Gallager said:

The [ESA] shares Reps. Matheson and Terry’s goal of ensuring children are playing parent-approved computer and video games. That is why the ESA consistently works with parent groups, encouraging caregivers to check each game’s ESRB rating and content descriptors—a system three-quarters of parents rely on regularly according to the Federal Trade Commission.

We also urge parents to make use of the parental controls available on all new games consoles. 

Empowering parents, not enacting unconstitutional legislation, is the best way to control the games children play.

GP: Don’t miss our exclusive interview with bill co-sponsor Rep. Lee Terry, coming up later today…

We’ve got additional reactions to yesterday’s report by the Federal Trade Commission which gave high marks to the video game biz for its enforcement of ESRB ratings at point-of-sale.

A spokesman for State Senator Leland Yee (D), architect of California’s contested video game law, remarked:

The Senator is pleased and commends retailers for significantly improving on the latest FTC study.  Clearly retailers are much more cognizant of the potential harmful effects of ultra violent video games and are not selling such games to minors in as great a number. 

With that said, it is imperative that the industry does more to prevent the sale of adult oriented games to children. Twenty percent of minors can still easily get their hands on games that are inappropriate for them. That equates to hundreds of thousands of children who are potentially in harm’s way. The Senator looks forward to continuing his efforts and working with the various interested parties to end the sale of extremely violent video games to children.

Meanwhile, Gavin McKiernan, National Grassroots Director of the Parents Television Council, lauded GameStop for its 94% enforcement record, but said that, as a whole, the video game industry needs to do better: (more…)

Last week, GamePolitics first began to suspect that Activision and Vivendi might have left the Entertainment Software Association (ESA) after noticing that the game publishing giants were no longer listed on the member section of the ESA website.

Today there is another major company missing from that list: LucasArts

We’ve got messages out to several LucasArts contacts in an attempt to confirm. An ESA representative promised us he would “look into that.”

So, we’ll call this one officially a rumor… for now.

But if true, the exit of LucasArts immediately on the heels of Activision and Vivendi could signal that the ESA, founded in 1994 to represent the interests of US video game publishers, is rapidly taking on water.

The steep decline in sales of M-rated games to underage buyers reported this morning by the Federal Trade Commission is a clear victory for the video game industry on both the political and public relations fronts.

Taking a victory lap is the organization responsible for operating the video game industry’s rating system, the ESRB. Via press release, ESRB president Patricia Vance commented on today’s FTC report:

Video game retailers have clearly stepped up their efforts to enforce their store policies, and they deserve recognition for these outstanding results.  We commend and applaud retailers for their strong support of the ESRB ratings, and will continue working with them to help ensure that these levels of compliance are sustained if not further increased.

The ESA, representing US video game publishers, declined to comment, referring us instead to the ESRB.

Bo Andersen, president of the Entertainment Merchants Association, a trade group representing a number of video game retailers, also weighed in. For retailers, the report is a mixed bag. They scored superb numbers on game rating enforcement, but were criticized by the FTC for sales of R-rated and unrated DVDs to underage buyers. Andersen said:

Retailers don’t want children to be able to purchase or rent video games and DVDs that their parents do not want them to have. As a result, they have made real and significant investments in enforcing the voluntary video game and motion picture ratings in their stores. The FTC’s latest ‘undercover shopper’ survey demonstrates that these investments are producing strong results… While we are pleased with the progress that has been made in ratings enforcement, retailers still are not where they want to be as an industry.

On the consumer side, Hal Halpin, president of the Entertainment Consumers Association, remarked:

This is an extraordinary accomplishment from the nation’s leading interactive entertainment retailers, as it clearly shows their increased commitment of keeping mature-rated games out of children’s hands. Perhaps most impressive is the incredible reversal in their failure rate over such a short period of time and with a comparatively new rating system.

This is truly a vindication for video game merchants who have been falsely damned by anti-game advocates and special interest groups, who now don’t have a leg to stand on.

GamePolitics also offered several high-profile game industry critics and watchdog groups an opportunity to comment. So far we’ve not heard back from the Parents Television Council, the National Institute on Media & the Family or California State Sen. Leland Yee. There was one critic we did hear from, though…

Despite the eye-popping retail enforcement numbers, anti-game activist Jack Thompson refused to give credit to the video game industry. Instead, he credited… Jack Thompson:

I’m more than happy to take credit for the improvement. The threat of legislation has improved performance, not some altruism on the part of the Strauss Zelnick’s [or] the industry. To America’s parents: Jack Thompson is delighted to have helped.

Of course, Thompson would have been all over the FTC numbers had they been unfavorable to the video game industry. Classy, Jack…

UPDATE: Dr. David Walsh of the National Institute on Media & the Family has now weighed in. NIMF claims a bit of the credit as well:

The results of the [FTC’s] latest undercover survey are good news for retailers and the [ESRB], but most of all for parents… With its consistent pressure on the video game industry, [NIMF] played a significant role in improving ratings enforcement and education. Similar to our… Video Game Report Cards, the FTC survey shows that specialty retailers, such as GameStop, continue to lead in enforcement and the rental companies need to step up their efforts…

Full Disclosure Dept: The ECA is the parent company of GamePolitics…

Hotly-anticipated PC titles Spore and Mass Effect will be among the first wave of PC games from EA to employ a controversial form of copy protection.

Techdirt reports that publisher Electronic Arts will use SecuROM protection, a scheme that has caused technical problems with some past titles. From the Techdirt story:

This new version is causing controversy due to an online verification system connected to its CD key. The system requires a connection to the internet during installation… After this the game will try to re-check the CD key every 5-10 days… If the game can’t verify the key… it will continue to try for a further 10 days, after which it will stop working… The protection will also only allow the game to be installed three times.

So what’s the beef? According to Techdirt:

A lot of gamers consider this intrusive and inconvenient, and that the publishers are effectively assuming their customers are pirates… Other concerns have been raised over users who don’t play with machines permanently connected to the internet… or how the system will work in regards to resale.

These potential problems combined with SecuROM’s past have made some call for a boycott of the titles and others to declare an intention to pirate the game out of spite.

Cnet’s Daniel Terdiman weighs in on the brewing controversy:

Systems like this are never going to be winners for companies like EA. For every copy of one of its games that it successfully keeps from being illegally copied, it’s going to lose a good customer who’s beyond annoyed at the way the system works and the way they feel they’re being treated.

To be sure, software companies feel they have to fight tooth and nail to avoid being robbed… [but] as the Sony rootkit scandal and other DRM PR nightmares have shown, users do not want to be controlled in this way. And they vote with their wallets.

The results of the Federal Trade Commission’s latest research into the marketing of violent entertainment to children is a major win for the video game industry.

Just-released numbers show that the FTC’s underage secret shoppers were only able to purchase M-rated games 20% of the time, a massive improvement over last year’s 42% success rate.

Amid heightened parental concerns following last week’s high-profile release of Grand Theft AUto IV, the news couldn’t come at a better time for the video game biz.

DVD sellers, on the other hand were spanked by the FTC for selling R-rated and unrated movies to underage buyers about half of the time. Theaters allowed the FTC’s secret shoppers into R-rated movies 35% of the time, making the game industry’s results all the more impressive.

New in this year’s report are individual ratings for retailers. The FTC results indicate that GameStop is doing the best job of retail ratings enforcement, turning away 94% of underage buyers. Wal-Mart and Best Buy scored high marks as well, with 82% and 80% turn-away rates, respectively.

Listed below are the FTC’s video game secret shopper results, listed by retailer (number indicated is successful purchases of M-rated games by underage buyers):

Game Stop/EB Games - 6%
Wal-Mart - 18%
Best Buy - 20%
Toys R Us - 27%
Target - 29%
Kmart - 31%
Circuit City - 38%
Hollywood Video - 40%

A graph posted on the FTC website (and seen at left) traces a steep decline in underage sales since 2000, when secret shoppers were successful 85% of the time.

 We’ll offer reactions from the video game industry and other stakeholders as we receive them.

Game biz guru Keith Boesky offers his thoughts on last week’s stunning news that Activision and Vivendi have pulled out of the ESA.

While the decision of Activision and several other publishers not to participate in this year’s E3 got much of the attention of the gaming press, Boesky sees the ESA defections as the real issue - and we agree:

The ESA is this industry’s most important advocate. The organization’s impact as a lobbyist in Congress is effective, but not really tangible… We can however point directly to litigation efforts, which… beat, every legislative attempt to restrict or impair the sale of video games… If not for The ESA, video games would likely not be considered an expression of free speech…

…many are speculating about disappointment over [ESA CEO] Mike Gallagher… We can expect a less confrontational organization than the old ESA and again, it is too early to know whether it is a good thing. I don’t think Mike’s presence… drove the decision…

Activision… simply did not want to pay the fee. ESA membership fees are based on revenue. The soon to be largest publisher in the world will be paying more than anyone else, and it did not sound like fun. As far as the impact on lobbying… Activision… can pay a portion of the money they would otherwise pay in membership fees and target their own issues…

Moreover, we have yet to see whether this action is truly a withdrawal, and not a negotiating posture to revise the fee structure has yet to be seen. If it is a withdrawal, it could signal the end of The ESA as we know it.

Meanwhile, The Escapist offers its take:

[Activision’s] walking away from a long-standing industry group like the ESA is not something done lightly… In light of the news that other industry majors are also dropping out of E3, it leaves the impression that the ESA is standing on some rather shaky ground…

An imploded ESA… leaves the industry without any form of organized political influence in Washington. With anti-videogame hysteria swirling around releases like Grand Theft Auto IV and Bully while the general public is subjected to a steady stream of misinformation… the lack of a unified voice speaking for the industry could be devastating.

Video game legislation proposed by Boston Mayor Thomas Menino - and authored by Jack Thompson - has stalled in the Massachusetts legislature.

In March legislators heard testimony on HB1423, a bill which would equate violent video games with pornography.

However the Boston Business Journal now reports that the measure has been “sent into study,” which essentially means it is on life support. From the Business Journal story:

Menino’s proposal, which would make it illegal for minors to buy video games with graphic content, was sent into study in March — a big win for the state’s burgeoning video game industry…

But the mayor, seeing a link between violent content and violent behavior, still is in favor of the proposal, and plans to continue to push for it on a grass-roots level, said Larry Mayes, chief of human services for the city of Boston. “To get this through, we’re really going to have to do a statewide push. We want to go to the communities, particularly to the parents and sit with them and show them the material.”
 
Mayes said members of the mayor’s office plan to hold community meetings starting this summer to educate parents about such violent video games.  
The hope is those parents will then advocate for the ban.

Reuters is reporting that Grand Theft Auto IV publisher Take Two Interactive is suing the Chicago Transit Authority over the CTA’s recent decision to remove ads for the game from its vehicles and facilities.

As reported by GamePolitics, the CTA pulled the ads about a week before GTA IV launched. The move followed a sensationalistic Fox News report which seemed to draw a linkage between GTA and a rash of local shootings. From Reuters:

Take Two accused the authority and its sales agent, Titan Outdoor LLC, of violating a $300,000… ad campaign agreement that included running “Grand Theft Auto 4″ poster ads on the sides of buses and transit display spaces throughout the Chicago transit system scheduled for six weeks between April and June.

The suit seeks an order for the transit authority to run the ads as well as monetary damages of at least $300,000.

GP: Congrats to Take Two for standing up for its rights. Let’s hope they bring the same kind of legal pressure to bear on Miami-Dade Transit as well. There, GP readers will recall, Jack Thompson pushed the agency into removing ads from Miami bus shelters.

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.

Grand Theft Auto IV developer Rockstar North may be one of the most successful high tech firms in Scotland, but company president Leslie Benzies laments a perceived lack of respect by government officials.

As reported by the Times:

Rockstar North is to video games what JK Rowling is to literature but few, particularly in government, are prepared to acknowledge this. It seems odd that politicians committed to “a smart, successful Scotland” haven’t come knocking at Benzies’s door.

Of the apparent official shunning, Benzies says:

We’d love to help if we have time. But there are a number of agencies which actively seem to cut us out. There is this weird thing where people think Scotland is so innovative, but if you do anything truly innovative, you get beaten down… This is our home. I love Scotland. I like the people…

We’ve had such a beating over the past three years - by the American government, the British government, the Daily Mail…

Via: CVG

Although TV shrink Dr. Tanya Byron has recommended that video games sold in the U.K. carry both Pan European Game Information (PEGI) and British Board of Film Classification (BBFC) ratings, the video game industry wants to deal with PEGI alone.

As reported by Spong, Paul Jackson (left), director of game publishers trade group ELSPA, said:

We are an entertainment industry that produces games for all ages. It is important that during this period of consultation post-Byron we work with everyone to ensure the revised ratings platform is robust and future proof.

As games move increasingly on line, we call on all parties to embrace the PEGI Age Ratings system. As an instrument of the Video Recordings Act it would have teeth and deliver the right system to help the public make informed choices about the games they play. We are delighted the DCMS Select Committee recognised the industry made a strong case for PEGI.

San Diego’s 10news has a video report on John Douglas, described as a 20-year video game industry veteran. Douglas likens Grand Theft Auto IV to porn:

If adults want to do it, that’s their choice. But that’s not where the problem is… Personally, I think it’s sick and twisted… They should be putting this stuff behind the counter so that the adults that want it can come in and ask for it, like they would an adult magazine…

According to 10news, Douglas left the game biz because he became “burned out” over the increasing level of violence in games. He believes that the video game industry markets adult games to children.

Douglas’s past involvement with the video game industry is unknown. He is currently president of Grand Design Productions. The company’s website describes it as in the business of creating ”faith-based, family-friendly entertainment with valuable spiritual and moral messages.”

One of our favorite blogs is Overlawyered, where overzealous attorneys (including you-know-who) are skewered on a daily basis.

While giving a mention to GTA IV on Monday, Overlawyered’s Ted Frank dropped a nugget of information that caught our eye: He’s one of those who signed on to the GTA San Andreas Hot Coffee class action suit. Ted writes:

As someone who purchased Grand Theft Auto:San Andreas the first day it was out for the Xbox 360, I am a member of a plaintiff class in a class action settlement over the Hot Coffee mod…

In the settlement, I get, well, nothing, and the attorneys will ask for about a million dollars; worse, individual “representative” class members who suffered no injury will get $5000 that could have been used to buy more music rights for Grand Theft Auto IV… This settlement was sufficiently appalling that I actually retained an attorney…

Curious about Ted’s thoughts on the class action, we asked him to say a bit more: (more…)

Ben Fritz (left), who writes The Cut Scene blog for Variety, questions the journalistic ethics underlying exclusive game reviews.

At the center of Fritz’s concern is IGN’s recent perfect score for Grand Theft Auto IV. Fritz writes:

I’m not at all accusing IGN of being dishonest in this particular case… HOWEVER… what the hell is with the concept of an “exclusive review?” Is anyone else as troubled by this entire concept as I am?

…being the first outlet to review a highly anticipated new videogame is a big deal. It means a major boost in Web traffic or magazine sales. …But how can we trust a videogame review when the outlet running it has been given a major commercial favor — one that’s worth money — from the publisher of the game?

You never see a paper or TV station getting special access from a movie studio or TV network or book publisher to run an “exclusive review.” Imagine the L.A. Times or Roger Ebert touting their “exclusive review of ‘Iron Man.’” Absurd, right? So why do we tolerate it for a videogame?

Via: That Videogame Blog

UPDATE: IGN responds in an interview on Game Daily. Xbox Editor Hilary Goldstein said:

My problem with online journalism in general is that nobody does their due diligence. Nobody from Variety called us and said, “Hey, would you like to comment about this?” …A lot of people didn’t get the game early. So if Variety didn’t get the game early then you’re looking at somebody, I don’t know, who had a grudge on his shoulder because he didn’t even have the game yet and we’d already put out the review.

I just wish people would call. We had so many people writing comments about us and not a single person contacted us. Not Kotaku. Not Variety. Nobody called. They just all made assumptions. And of course we gave it a 10. But so did everyone else.

The Timothy Plan, a Maitland, Florida-based mutual fund group which offers a “biblical choice when it comes to investing,” has issued a press release slamming Take Two Interactive (NASDAQ: TTWO), publisher of Grand Theft Auto IV.

From the release:

Take-Two Interactive… has done it again, releasing another video game that contains extreme sexual and violent content… Beyond the intense violence, blood and mayhem, during the game the character can have sex with prostitutes, visit adult clubs, request a private lap dance and drive drunk.

The Timothy Plan, a morally responsible family of mutual funds, refuses to invest in companies like Take-Two Interactive because of their involvement in the anti-family entertainment and pornography industry.

Timothy Plan president Arthur Ally (left) is quoted in the press release: 

This $30 billion a year [video game] business is exploiting sex and violence more than ever in their products. We hope more parents will not continue to fall into a category that four out of ten often do by relying simply on the ESRB rating and leave their children alone while they are playing video games.

While the ESRB system is a step in the right direction, the ratings are confusing and incomplete at best.

Ally also criticized another Rockstar game, Bully: Scholarship Education, because protagonist Jimmy Hopkins can kiss other boys in the game.

Take Two is among several dozen publicly-traded companies listed on the Timothy Plan’s Hall of Shame. Others include Starbucks, PlanetOut, Wal-Mart, Microsoft and would-be Take Two acquirer, Electronic Arts.

While it’s not clear exactly how these firms have transgressed in the Arthur Ally’s view, the Timothy Plan is anti-gay, pro-life and opposed to investing in companies which deal in alcohol, tobacco, gambling or pornography.

Are critics of the Grand Theft Auto series the same breed of culture cops who were mortified by Elvis Presley’s hip shaking style of rock’n'roll in the 1950’s?

Leslie Benzies (left), president of Scotland’s Rockstar North, creator of GTA IV, says they are. Benzies told The Scotsman:

[GTA IV critics are] the same kind of people who complained about Elvis… There is a big fear factor here. It’s [like] the coming of the railways, it’s Elvis shaking his hips. It’s cars going over 25 miles per hour and making people explode.

We’ve had such a beating over the past three years, by the US government, the British government, the Daily Mail. ‘You kill prostitutes’ – that’s usually the objection. I ask if they’ve ever played the game. Invariably they haven’t.

Benzies also offered his thoughts on another controversial title, Manhunt 2. The game was banned in the UK until Rockstar won an appeal earlier thus year:

We wanted to make a horror game that would scare you in the same way a film would. If it’s a film or a book, you can do what you want. We seem to be in a different category. We’re very careful who we market the game to, and what is in the game.

The Associated Press reports that Tuesday’s GTA IV launch will be the biggest video game release of all time, easily topping the $300 million in first-week sales generated by Halo 3 in 2007.

The AP quotes Wedbush-Morgan financial analyst Michael Pachter:

The addressable market at launch is about 24 million consoles. So how many will sell in the first week or month or few months? Nine million. That’s the number. That’s about a 35 percent attach rate. By year’s end, it’ll be somewhere between 11 and 13 million because more consoles will be sold before the holidays.

Bloomberg offers a similar prediction, as well as an estimate from Janco Partners analyst Mike Hickey that GTA IV will hit the $360 million mark during its first week at retail. Hickey summed it up for Bloomberg:

People are going to buy this game.

Last week we gave a mention to Minusworld’s tongue-in-cheek GTA IV Activity Book for Kids.

This morning we note that Crackle.com has posted a pretty funny GTA IV parody video (left).

Minusworld takes another (not quite as clever) bite of the GTA IV apple with a satirical article explaining why Canadian Prime Minister Stephen Harper is begging Rockstar to create Grand Theft Auto: Montreal as its next installment in the series

Finally, an artist by the name of Scave has apparently created a custom GTA IV munny (left) for Rockstar.

The munny features, of course, GTA IV protagonist Niko Bellic.

According to the New Zealand Herald, Kiwi gamers who purchase Grand Theft Auto IV will be getting the same edited version as their Australian neighbors.

GP readers may recall that GTA IV publisher Rockstar Games was required to sanitize the game in order to gain clearance from Australian government censors. From the Herald report:

The censorship of Grand Theft Auto IV has forced the country’s largest online retailer of games to cancel $50,000 worth of advance orders.

Meanwhile, Bob McCoskrie, a spokesman for watchdog group Family First, ripped GTA IV and called for a ban:

Players could re-enact having sex with a prostitute, beating her bloody, taking her money and running her over with a car and shooting at police officers.

It is completely naive to believe that teenagers and young children won’t have access to and be able to play the game. It is also completely unrealistic to believe that young people will not be influenced in their attitudes and behaviours by constant exposure to this type of material.

So-called ‘entertainment’ and freedom of expression should never be at the expense of the safety of our community, appropriate emotional and moral development of our children, and promoting acceptable attitudes towards women, violence and law enforcement.

While New Zealand has been know to censor video game content, it is apparently the game publisher’s decision to sell the watered-down GTA IV there: Simon Barton of Gameplanet told the newspaper: 

Everyone’s assuming it is logistics. It just makes sense for them to send us the Australian version… There’s plenty of swearing, plenty of violence [in the game]. It’s very good. But I wouldn’t want my 15-year-old playing it.