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

1. Games For Change
The Ever-Evolving Industry
Erik V. Huey
Senior Vice President of Government Affairs
Entertainment Software Association
June 19, 2013

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Rating Category Breakdown

14. Ratings Awareness & Use

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. FTC Mystery Shopper 2000-2013

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. 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. 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. 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. Video: Active Play PALA+ Challenge

22. Games For Change
The Ever-Evolving Industry
Erik V. Huey
Senior Vice President of Government Affairs
Entertainment Software Association
June 19, 2013