The Needles

The Needles
Interesting Days at the ESA

Andy Chalk | 6 May 2008 21:00
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The crux of the complaints appear to focus on the association's current president, Michael Gallagher, who replaced Lowenstein in May 2007. Soon after the Activision-Vivendi announcement, Kotaku reported on "several (anonymous) industry sources" who said Gallagher's leadership of the ESA was at least partly to blame for the problems surrounding this year's E3; Wedbush Morgan analyst Michael Pachter put it more bluntly, criticizing Gallagher for failing to take a more visible and proactive stance as ESA president and describing him as "far less knowledgeable and sophisticated about this industry than Doug was." Pacther suggested he would be prone to "rookie mistakes," and then quickly went even further, adding, "I criticize (Gallagher's) lack of drive to learn about the industry."

For its part, the ESA appears to be downplaying the defection, commenting only via the following statement from Rich Taylor, Senior Vice President of Communications and Research: "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."

But there may be more concern behind that bland catch-all than the ESA is letting on. For one thing, as two of the larger members of the ESA stable, Activision and Vivendi presumably would have provided significant sources of revenue to the group. Even more threatening is the potential loss of credibility for the ESA and the impact Activision's absence will have on other publishers, who may find themselves re-examining their own ties with the organization.

It's possible that Activision's desire for more direct control over events like E3 led to a conflict with ESA management that ultimately proved easier to abandon than to fix, but the situation is unlikely to be that simple. Walking away from a long-standing industry group like the ESA is not something done lightly, even for a heavyweight like Activision. 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.

This could be very bad news for gamers. An imploded ESA, without a suitable replacement waiting in the wings, 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 about the addictive and destructive potential of the medium, the lack of a unified voice speaking for the industry could be devastating.

But one piece of good news in all this is that the ESRB will remain unaffected. A move away from the well-established system could open the door to more concerted efforts to introduce legislative restrictions against games, but Eliot Mizrachi of the ESRB confirmed that game ratings are not contingent upon ESA membership, and that no extra fees or processes are required of non-members who submit their games to be rated. Activision and Vivendi's use of the rating system should continue unchanged.

You can find some degree of comfort in the fact that Activision did not become the gaming behemoth it is today by making careless or reckless business decisions. Numerous theories abound: Some observers think Activision wants to start its own trade show, something more akin to the E3 of old rather than the stodgy new format, while others have suggested this is simply an attention-whoring prelude to Activision-Blizzard's entry into the club. Or, as Pachter suggested, the company may simply believe the ESA has become ineffectual.

Regardless of the reason, it's a safe bet that Activision isn't going to act in a manner overtly detrimental to itself or the videogame industry. Predicting beyond that gets trickier. Pulling out of E3 is one thing, but an out-of-the-blue withdrawal is a whole 'nother ballgame. This, as they say, is where it starts to get interesting.

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