Gallagher GfC15 transcript

Thank you very much for that kind introduction and thank you to the organizers of Games for Change for having me back to spend a little bit of time with you. I look forward to speaking for about 20 minutes and then look forward to your questions, so if you have things that you'd like to raise or any of the material you have any questions about, please do feel free to save those & we'll have a little time at the end.

I think I'm very excited over the past couple of days to listen to the experts in our industry who are doing some of the most remarkable work to improve our lives in society through the magic of our medium of video games. It's an industry that I am enormously honored to represent in them, ESA is an organization that I'm even more privileged to lead and it comes down to the creative energy of the engine that is the entertainment part of the industry that drives us, but we see these other aspects of the industry, the promise of technology and it's led by individuals like yourself & groups you represent, & it's a privilege to share these days with you here in New York in the good care at the Games for Change team.

For an industry dynamic as ours, a lot can change in a short period of time. Since I last was here 3 years ago, our industry has continued its remarkable evolution, including introducing innovate new entertainment experiences and chartering unprecedented leads in technology. Amid these changes in the backdrop of an ever-expanding player base, it has never been clearer that video games have tremendous potential to stimulate social change.

In fact when you look at the industry itself, we've grown to 146,000 employees, that's direct and indirect nationwide, and that growth is driven by the presence of the industry across every device, which has a screen in the battery, as well as the introduction of 3 new consoles which have all cloud-based drive, remarkable entertainment experiences. That employment & revenue growth in our industry, 10% per year is four times bigger than the growth rate of the United States' economy.

So when you look at the industry & you look at its health, it's never been more vibrant, it's never been more connected to consumers as we'll touch in a moment, but as we know, video games are much more than just pure entertainment, they're at the forefront of education & digital learning & workforce training & recruitment. They drive the technological innovation that will make companies smarter, faster, & more competitive.

I go to other conferences around the country & they speak of the internet of things. I really believe that for our industry, it's the internet of experiences. What really brings value to consumers are the connections they make & the things that they do, it's not the devices themselves, & at the very top of that hierarchy are video games & that magical engagement, that immersion, that entertainment, & that growth that comes from playing them.

Today I will share the highlights of the industry's evolution & discuss how we can all continue to work together to expand video game's positive influence on all areas of daily life. Given what we have achieved so far, I believe that the future is quite bright. So over the past 40 years, entertainment software has experienced tremendous growth, what started with Pong & 8-bit plumbers, has transformed into visually stunning masterpieces featuring fantasy worlds & simulated real life environments rendered in such incredible detail, the players feel almost, as if they were in the game. With the advent of virtual reality which has been discussed & now is about ready for consumer enjoyment, we look to see that frontier extended even further where players are actually in the game.

Other advances, especially those in wireless technology, broadband connectivity, streaming services & cloud computing now allow consumers to access games & entertainment content across every device with a screen, giving on-demand gameplay a whole new meaning. As these new platforms have emerged, the variety of games has expanded, game genres & business models have multiplied & now exist- that didn't exist 2, 3, or 4 years ago & they're pushing our industry to new heights. Standouts in these genres such as Clash of Clans, the current highest grossing mobile game, make more than a million dollars every day.

In recognition of that, ESA has seen the growth in the mobile market & the worldwide nature of a digital connected environment that it is, worked with the ESRB to create the International Age Rating Council (IARC), which is a platform worldwide, that's used for rating games on mobile because we all know how important that is. It's important for parents, it's important for consumers, it's important for a number governments who take interest in this, & that development or that platform was just announced a month ago is going to be adopted by Google's Android store. Pat Vance if she's here, she raised her hand over here, congratulations to Pat for that.

But the video game technology has also spurred the growth of entirely new sporting events or e-sports, & the notion that 27 million people would tune in to the League of Legends season 3 World Championship is remarkable. 27 million people, put that in perspective: That's more than the series finale of Breaking Bad, 24, & The Sopranos, combined. That shows the power of the audience that is immersed in the magic that's created this entertainment experience & nearly a hundred million users, gamers, tune in to Twitch once a month. The average view time is nearly 2 hours. Again, engagement level for our medium never been higher than it is today.

Each move has pushed our industry to be more expansive & interconnected. Once limited to just one or two players, game platforms now allow thousands to play & connect simultaneously. According to ESA's 2015 esstential facts about the computer & video game industry which was released earlier this month: 56% of the most frequent gamers play with others & 54 percent play online in multiplayer mode at least weekly.

So these technologic & artistic enhancement drive demand for cutting-edge entertainment. Computer video game play has grown to become a universal experience, more than 1 billion people play games worldwide today & as our industry has developed more innovative games & game technologies, our audiences broadened & matured & diversified significantly. This trajectory that we're on is only going to be better as we look to the growth of the
smartphone market. In the next 18 months, there will be 1 billion new gamers added to the billion that already exist, through the growth & distribution of smartphone technology by the wireless industry, very powerful component & an accelerant for growth.

Now according to, again, our central facts here in the US: Nearly half the population, 155 million people, play video games & 4 out of 5 Americans households own a device used for gameplay & these players are diverse. There are twice as many adult female gamers as young male players, those under 17, & the most frequent female gamer is on average 43 years-old. Additionally players aged 50 & older are the 2nd largest segment of the gaming population.

So the power that we have & the diversity of our consumer base is fantastic & it's never been higher, but as we know, especially as we gather here, the evolution of our industry & the popularity play across platforms & demographics, has in turn, prompted video games integration into our daily lives. They're now ingrained in our culture. Entertainment software is uniquely positioned to drive positive change to truly transform our lives.

It's not news to anyone here, almost all of you in this room have done outstanding work to apply games, game principles, & game technologies to fields outside of entertainment, to find answers to creative social challenges. As you know, video games are now valuable tools that strengthen our education system, improve the delivery of health care, increase our chances for workplace success, & tackle important social issues.

At ESA, we're confident that your continued efforts would advance these important trends  even further. Now at ESA, we proudly celebrated our 20th anniversary last year, marking 2 decades of success in representing the US video game industry. Among the accomplishments in which we take great pride are the quality partnerships we have built with non-profit organizations, issue experts & state & federal policymakers, to strengthen video game industry's impact & the impact of gamers, & to preserve the runway in the growth rate for exciting new technologies.

We're particularly interested in the intersection of games & education, & collaborate with our partners to support & promote video game use in the classroom. Just yesterday, we partnered with the Department of Education & Games for Change, to launch the first Games for Learning summit here in New York City, this day-long summit brought together leading developers, publishers, policymakers, educators, & students to identify strategies on how to better create distribute & use quality educational games both in & outside of the classroom.

I think it was particularly powerful at the conference yesterday that we've moved beyond the notion video games CAN be impactful in education, the fact is they are. In multiple places, in classrooms across the country using many different platforms & innovative ideas, again many represent in this room, the fact is true. Our task is now to grow the understanding, the realization, & the impact of that truth.

So we've also collaborated with the Institute of Play, Electronic Arts, the MacArthur Foundation, & the Bill & Melinda Gates Foundation, to create the games learning & assessment lab or Glasslab. In this groundbreaking video game design lab, has built & released 9 different video games, which been now in 5000 classrooms & have had over 10 million play sessions. Again, this is an idea that 3 years ago was born, was announced 18 months ago, & in the course of the last year's achieved that level of penetration, & again I think that speaks to the power of digital platforms, it speaks to the power of video games as a teaching medium.

Additionally, we continue to support the national STEM video games challenge which is an annual game design competition, that challenges students & developers to create original games that stimulate interest in STEM subjects. Now this year, we added some new partners & we added the regional spotlight program, which this year's again focused in the Pittsburgh area, we added a series of workshops on exploring the power of inter-generational play & design, & that's with our colleagues at AARP, & we look forward to announcing our 2015 challenge winners in June.

When this effort first began, led by Michael Levine, & the team here at Sesame Street in New York, when that first began, we had 400 applicants, were the kids that design the games, they were again acting as creators, not just consumers of the great content. We had 400 applicants, last year we had over 4,000, so again the reach & excitement around our medium is very potent up & down the age chain.

So finally, we're helping women & minorities begin their path to professional success in our industry through the ESA Loft video game innovation fellowship, its a partnership with the Hispanic Heritage Foundation's leaders on the fast track or Loft program. The fellowship awards 20 minority use with grants to design & program their own video games that aim toward solving problems in their communities & the fellows traveled to Washington DC & we escort them meetings on capitol hill & with the white house & again, its a very positive & exciting time for those young developers that are in making.

So these & other initiatives are imparting complex knowledge in developing crucial STEM skill sets among students while reinforcing positive educational habits & lessons learned. The ESA Foundation, is another arm that the industry uses to support your work & that of your colleagues through our philanthropic arm. Since its inception in 2000, the Foundation has provided millions of dollars to support the innovate & diverse projects that harness the power of computer & video game technology to create social impact.

The ESA Foundation's core grant program supports charitable organizations & schools that leverage entertainment software & technology to create meaningful opportunities for America's youth. Each year, our grants help connect youth to educational computer & video games, contribute to a more digitally advanced generation, these programs we support help reinforce math & science skills, life in history, increase civic participation, improve health outcomes, & prepare students for college

For example, the ESA Foundation grantee iCivics, which was founded by the former US Supreme Court Justice, Sandra Day O'Connor, created a game based learning platform to help teach civics. First launched in 2009, iCivics features 21 games about constitutional law & the branches of the US government, each of which also comes with suggested lesson plans better tailored to meet state specific learning standards.

In January, we proudly partnered with iCivics to launch DB Quest: Eyes on the Prize, a first of its kind online platform that teaches students about about the civil rights movement & it improves the student's argumentative writing & critical reading skills along the way. We hosted a special event in Washington DC which justice O'Conner to celebrate the launch & I was incredibly energized by her charge that as far as iCivics has come, as far as its reach has grown as many middle school classrooms as it penetrated, it's still not enough & it won't be enough until all of them are & until we have a generation of new citizens that are ready to take on the burdens & responsibility of citizenship & her energy is quite apparent in the iCivics organization & we are proud to partner with them.

Another ESA Foundation grantee, Hopelabs, seeks to improve children's lives with its innovative & educational digital resources. The ESA Foundation provided Hopelab with grants from 2008 to 2014, to support its development of Remission & Remission 2, which are video games, which promote successful long-term treatment outcomes for adolescents & young adults with cancer. The games are designed to motivate players to basically stick to their treatment & to see the value of the challenges that they're facing, & through playing the game, reach a better result than they would otherwise, & the results have been chronicled in numerous medical journals & it's been again another very exciting partnership, very positive, & we're pleased this year that Hopelab received a grant for its development testing of Zamzee, a physical activity tracker that encourages children & family to pursue healthy lifestyles.

This year, the ESA Foundation is also providing funding Division Quest 2020, which is leveraging educational technology to establish a nationwide vision screening program for school children across the United States. Its newest screening system interactive game called I Spy 2020, is the only screening system to test visual acuity, depth perception, & color vision, our grant will help provide game software-related supplies & training to more than 30 schools to enable them to conduct unlimited vision screenings.

This reflects all of the ESA Foundation's 2015 grantees, whose projects are well underway. We look forward to seeing the results of their efforts later this year & encourage any of you who are interested to apply for grant. The ESA Foundation is accepting submissions for its 2016 grant program through May 15th & the application & everything you need for information is on the ESA Foundation website.  So of course, support for your work does not end with these programs. As you may know, the ESA is based in Washington DC & because of that, we have access to policymakers, opinion leaders, & that access enables us to tell the story of how games are improving what matters to a very influential audience. We achieve this in part through the relationship with the congressional caucus for competitiveness & entertainment technology or the E-Tech caucus. ESA worked with US representative Kevin Brady & Debbie Wasserman Schultz to launch the caucus in February 2011 & it now boasts more than 50 bipartisan members, & the caucus works to educate policymakers & the public about the economic, educational, & social benefits of entertainment technology.

We frequently share examples of your work with these lawmakers & other audiences to demonstrate the positive impacts that video games have on the way we live, learn, work & how to further interest in developing new & innovative applications for interactive entertainment software. So video games have proven their value in making an economic impact in the world, & as a result we see a growing acceptance of video games as more than just an entertainment medium. There's always more we can do to increase this recognition, & at ESA, we want to work with you to enhance understanding among policymakers, educators, health care providers, non-profit organizations & business leaders on how video games can help Americans lead healthier, happier, & more productive lives. We want to amplify your voice & tell the stories of how your innovations are changing our society, we're always interested in forging new partnerships. So on behalf of ESA, I congratulate you on your accomplishments & your achievements, we welcome the opportunity to work with you, & together we can leverage our creative strengths & shape our country's future.

I'm now happy to take your questions.

"You started out by saying they are 140,000 jobs in the game industry & you talked about 44% of the game players out there being women. I don't suppose that 44% of the workforces is women... I thought it was very telling that you talked about the ESA is part of its direct influence, attempting to create scholarships or opportunities for 20 young people of color or women. By my calculations about 60,420 jobs that are required for that demographic in 20 is a great drop in the bucket, but what is the ESA's role or responsibility in bringing its member companies, the large glut of the employers in the industry out of the 1950s & you know, less male & less whitewashed."

Thanks for the question. Somehow I anticipated that this stuff would come up. ESA's role, and this goes much beyond the loft fellowship that I referenced, that's just simply one program. Through the ESA Foundation, we give out 30 scholarships a year to women and minority students to assist them in reaching their college dreams, and that's just one of the scholarship programs, another scholarship program we have operates with teachers to make sure that they're enabled  to provide tools that are innovative in the classroom, that's the challenge grant program. We're also pleased to provide those tools & those resources to teachers. So we work with the industry to make sure that we are reaching out to those communities, where there's a need to bring diversity, to bring those interests, better represented into the industry. I believe according to IGDA, the number for female representation for the industry is actually 22%. While that is substantially ahead of the tech industry overall, which is around 15% we still have a long way to go & we know it. We're particularly encouraged by the research that was recently released by the Higher Education Video Game Alliance that look at the pipeline for talent, where's the new talent gonna come from to fill these jobs in our industry as we continue to grow, and what that study says are 2 very important facts- says many things, but to the 2 that are very important to this question. One is that a third of that pipeline is women. Now while it would be ideal that we could be at 50%, & I say that as a father two daughters who are engineers, I'm personally very familiar with what it takes to have a strong STEM philosophy in the home & to stimulate both my son & my daughters to reach those high goals, 33% is twice as high as the female enrollment that are in the engineering programs & the computer science programs in 63 different universities that participated in that study. So we're quite encouraged by what we see is the pipeline of fantastic talent that will come in our direction, & we're ready to recieve them into the industry to create these dynamic experiences thatt we all enjoy. I know every ESA member is committed to diversity in the workplace & in the marketplace, we're proud to represent that viewpoint, we have a long way to go, & we look forward to working with you to get there.

"I'm interested to know a little bit more on how you measure impact & if you could tell us a little bit more about how many of your projects you've deemed successful."

I think that's a very good question. On impact, we're relatively modest, we want to be key contributor to what's a larger goal, so if you look in at the different universities that we've contributed tom it's to be a catalyst for something that continues & survives, or the museums. We support the Museum of Modern Art, the Museum of the moving image, the Smithsonian, we have different grant sizes that we've work on there. We've given over three-quarters of a million dollars in scholarship to [???] USA, these are scholarships that principally go to the children of our troops that are protecting our freedom abroad, & so I'd say that in the scholarship realm, definitely feel high impact because each one of those mines, we're able to influence & help along the way, that's a positive for the industry that is undeniable. We're hopeful that they're all completing their education, we don't monitor them necessarily along the way, we're pleased to help them when they ask for help & on some of the grants, some of the grants are very exciting, they end up with like Hopelab & the ones that I've highlight my remarks, there's no question about their success it's really remarkable what we're able to be a partner in assisting others into achieving, others are too soon to tell. This last year, we reached out to the Girl Scouts & in Los Angeles through E-Line ventures, we institue a badging program for young girls that they can get by writing video games, by playing games, that they get one of their badges is for video game experience and coding, that's terrific! It's one year it's too a little early to tell, and so I think on some of those programs that they're not quite as impactful because it happens & then it just dissipates, we don't necessarily see results...but we always have our eyes open & we do keep in touch, & as you can see from the history on the ESA Foundation website, there are some repeat grantees & those repeats only happen when we see results.

"So back in October, a spokesperson for the ESA said threats of violence & harassment are wrong, they have to stop. There's no place in the video game community for our society for personal attacks or threats. So that was back in October and I want to know what is the ESA doing concretely in an actual, y'know, outside of just vague terms to combat the harassment that's plaguing our industry right now."

Well it's important to understand the role of a trade association in this and thats- we're not law enforcement. What we do is we convene & have discussions with leaders in other industry groups, & I think when you see companies like Twitter changing their policies about harassment & the language that's used & putting in some steps to mitigate that, I think that's positive & I think when our voices added to others that say "this activity is not condoned", I think that's very positive. You have a number of interests in working with law enforcement to try & track down the people who are making these threats. We stand four-square with those efforts & leave they're very important because this harassment issue is not uniquely a video game issue. It is in this one circumstance focused in our environment but if you look at you just simply put in harassment on the Internet into your search browser of choice, mines Bing because Microsoft is a member, if you do that, you'll get back instances that span across the use of the internet. It's not uniquely our challenge, but we do stand with others who want to see the threats & the harassment & for civil discourse, we protect the 1st amendment. That's one of the things ESA is known best for. We support all speakers rights, including those who are critical & that this type of activity is just flat-out wrong & needs to stop. So we've been clear about that, we'll continue to be clear about it.

"Are you strictly US-focused or not, because obviously everything you do is inherently global..." [Can't hear perfectly.]

Excellent question, the question is about the worldwide impact of these things with the focus of ESA, are we purely United States or are we broader than that and then what's then what's being done with our colleagues around the world to make sure there's some coordination, I believe I got the question right. So we are the US trade association representing the video game industry, our reach really expands through North America, we partner very closely with ESA Canada, we also work on ratings issues in Mexico, we have a couple issues that we manage in South America, but principally our focus is here in North America, but we're quite aware & the point of the question is right on this worldwide market. Digital distribution means games can be sent anywhere in the world in the blink of an eye  ideally the market for a video game is the world, not just one country, even as great & as big as the US market is, it's not enough. I mean nowadays, it's to reach farther. So one example, we do several things to make sure we're embracing that reality, one is we coordinate our policy positions with our counterparts around the world in Australia, Europe, Japan, Korea, & other places & often we will lend our voice to different policy challenges they're facing in their country, because it's what's necessary & right for the market to continue to thrive here. So we coordinate with our colleagues in the other trade associations around the world, & we do that several times a year but one of the big ones coming up of course is E3, we have a gathering & there's just a few thousand people joining us at that thing, but we'll have an opportunity to sit down & visit. The other thing we're doing is IARC which is Pat Vance's & the ESRB's initiative to provide a ratings environment for mobile and tablet games all around the world. That is a huge challenge, that you provide ratings in the local nomenclature, in using the local symbols that are familiar on a mobile platform- not easy these are smaller screens, & then tailoring that rating to fit the ratings environment in the country where it's being requested, & where it's being provided. Pat & her team work with her counterparts around the world to make this available to developers now on Google, effective next month, developers will be able to use it for free to when they input & answer the questions that are there to get a rating that's usable in multiple different markets around the world. So we're doing our part, we do coordinate, it's a huge challenge just like it is for each company that is in this industry.

So with that, my time has expired. I thank you for the time to be with you today, I commend you for all the good work that you're doing & look forward to seeing you again soon. Thank you.