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Broadband and the Video Game Industry:

Broadband and the Video Game Industry:. A Partnership for Future Growth. Michael D. Gallagher President and CEO Entertainment Software Association. Broadband Properties Summit. Dallas, Texas April 28, 2009. An Increasingly Interconnected Relationship.

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Broadband and the Video Game Industry:

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  1. Broadband and the Video Game Industry: A Partnership for Future Growth Michael D. Gallagher President and CEO Entertainment Software Association Broadband Properties Summit Dallas, Texas April 28, 2009

  2. An Increasingly Interconnected Relationship In less than a decade, video games have embraced the new opportunities that broadband affords • Sony shipped PlayStation 2 in 2000 without a built-in network adaptor • When Microsoft launched Xbox Live • in 2002, the service supported only • five exclusive games

  3. An Increasingly Interconnected Relationship • Today, microtransactions, downloadable content, and online game play reshape the industry on a daily basis • 500 million online EA Sports games have been played since its launch in June, 2008—equates to 2.2 million EA sports games are played each day

  4. Video Games Enter a New Era Opinion leaders increasingly appreciate the industry’s contributions across society • Overall computer and video game sales climbed to $22 billion in 2008 • Over 400 academic institutions around the world offer video game programs or courses • An ESA survey found that 70% of businesses currently use games to train employees

  5. An Expanded Consumer Base The industry has maintained traditional gamers’ support while reaching out to new demographics • The average gamer is 35 years old • Women represent 40% of gamers • One out of every four • gamers is over 50

  6. Games Tackle Serious Issues Despite roots in entertainment, video games today serve serious purposes for many organizations • Broadband enabled Stanford • University to launch the • Folding@Home project to better • understand protein folding • The United Nations created Food • Force to educate children about • world hunger • The University of Southern California modified • Virtual Iraq to treat post-traumatic stress disorder

  7. Video Games Mean Business An ESA survey found that 70% of businesses now train employees through video games • 78% of organizations not using the technology today likely will offer it within the next five years • More than 75% of companies plan to expand their usage within the next three to five years • More than 200 academic institutions • across the U.S. offer video game • programs or courses

  8. A New Outlet for Creativity Video games have become a preferred medium among many artists for expressing their talents • Game developer Ninja Theory hired award-winning composer Nitin Sawhney to produce a soundtrack for Heavenly Sword • Into the Pixel, a 16-piece video • game art exhibit, appeared at the • 2009 South by Southwest festival • Grand Theft Auto IV received widespread critical acclaim for the game’s artistic value

  9. A New Source of Community Online game play has allowed the industry’s diverse consumer base to feel connected • According to the Pew Internet & American Life Project, 76%of teens play video games with other people • Sony’s PlayStation Network maintains more than 20 million registered user accounts • Microsoft’s Xbox Live users watched • 25 million hours of Netflix movies and • TV programs during the partnership’s • first three months

  10. An Economic Engine During Stagnant Times • Despite the financial crisis, overall computer and video game sales climbed to $22 billion in 2008 • Annual software sales grew to a record $11.7 billion last year • December, 2008 sales exceeded $5 billion • Analysts expect software and advertising sales worldwide to top $68 billion by 2012 • North American gamers spent $1.9 billion downloading games last year

  11. Our Path Forward As our relationship evolves, we must keep our focus on our consumers’ needs • Expand opportunities for consumers to download and play games from a wide range of legitimate online services • Seek government policies at the local, state and federal levels, including tax incentives, that encourage more affordable, accessible and faster high-speed Internet service

  12. Our Path Forward • Advocate for stronger intellectual property rights, with attention devoted in particular toward countries listed on the Special 301 Report • Intellectual property is a leading reason why people adopt broadband and that boost to the ecosystem requires protection

  13. Broadband and the Video Game Industry: A Partnership for Future Growth Michael D. Gallagher President and CEO Entertainment Software Association Broadband Properties Summit Dallas, Texas April 28, 2009

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