by Marty Demarest

The video game and the motion picture industries have been turning in domestic sales figures over the past few years that, for the most part, have been comparable. But in 2001, the video game business took an enormous leap forward, trumping domestic box office receipts by more than $1 billion.

The figure marks a 43 percent growth of the industry since the previous year, defying analysts' expectations and adding even more pressure to the competition between the three largest companies in the business.

Sony's Playstation2, which was introduced in 2000, accounted for 56 percent of the industry's retail activity last year. Microsoft, which introduced the Xbox just before the holidays, sold slightly more of its machines than Nintendo's newest offering, the GameCube. But Nintendo -- one of the industry's oldest companies -- also had strong sales, helped in large part by the newest incarnation of its popular hand-held system, the Game Boy Advance. Sales of that machine accounted for a staggering one-third of all video game machines sold during the year. Nintendo also published three of the 10 best-selling video games of the year -- more than any other single company -- counting on their popular franchises like Pokemon and Mario Brothers.

Vice President of Corporate Communications Perrin Kaplan says Nintendo has maintained its success in the industry for so long by focusing primarily on the creation of games that are rated "E," standing for games that are considered appropriate for everyone, as opposed to "Teen"-rated (T), and "Mature"-rated (M) games.

"What is the most interesting statistic that we have found over the last 24 months," Kaplan explains, "is that M-rated games are a very small percentage of the whole. They may be like 9 percent of the whole. So if you take the individual games, one or two might be great sellers, but overall they do not make an industry. The majority of games -- and the majority of revenues -- come from games rated E, and that's where a lot of Nintendo's success has been. We do have some M-rated games and some T-rated games. They do very well, but one of those categories will never make up for the huge share that the 'E' category owns."

While Kaplan accurately assesses previous years, 2001 saw several M- and T-rated games move onto the Top 10 list for the year, with only five of the titles on the list rated E. It's a remarkable contrast to the list in 2000, when only two of the titles were rated T and the remainder were E.

These statistics, and the industry's explosive growth, have already attracted increased attention from lawmakers, who have been sharply critical of both the video games industry and its marketing techniques. This reaction was fueled even further by the Federal Trade Commission's report to Congress late in 2001, in which it faulted retailers for selling M-rated games to approximately 78 percent of underage shoppers.

The growing attention to the industry has been driven by concerns about what effects M-rated video games might have on children, and by complaints from parents and special-interest groups. Of course, in the realm of entertainment (broadly defined), none of the issues being raised is entirely new. James Joyce, among many other writers, had his writing censored due to the threat of "moral corruption." Comic books have been blamed for the demise of the wholesome American child. Motion pictures underwent the era of the Hays Production Code (1934-68), when story elements and characterizations had to pass the standards of a review board before they could even be shown. And rock music has been attributed to no less potent a source than Satan himself. Even today, books and recordings are thrown to the flames and condemned in public for alleged breaches of codes ranging from basic morality to political correctness.

But video games are a new medium; the same qualities that make them so appealing and distinct from other forms of entertainment also provide researchers with the justification that they can't be treated like books or television. As described by Douglas Lowenstien, president of the Interactive Digital Software Association, "Computer and video games bring us into imaginary worlds and allow us to define who we are, how we behave and how we relate to others in the game; they challenge us intellectually; they excite us; they educate and empower us."

These same qualities are why retired Army psychologist Lieutenant Colonel David Grossman chose video games to help instruct soldiers, specifically to desensitize them to violence. But according to Grossman, the effects on children -- who have access to many of the same games -- are similar. "We are teaching children to associate pleasure with human death and suffering. We are rewarding them for killing people. And we are teaching them to like it."

Despite the powerful rhetoric, however, the scientific data has been less than incontrovertible. Video game publishers point to the fact that in the years that the video game industry has grown the most, incidents of youth violence in the United States have fallen dramatically. As recently as last January, the Surgeon General released a report that stated "the impact of video games on violent behavior remains to be determined." At the press conference releasing the report, U.S. Surgeon General David Satcher explained that while there was a connection between violence in the media and aggressive behavior, it was less than conclusive. "We clearly associate media violence to aggressive behavior. But the impact was very small compared to other things. Some may not be happy with that, but that's where the science is." And in 1999, the government of Australia conducted a comprehensive review of the available research, concluding that "The accumulating evidence -- provided largely by researchers keen to demonstrate the games' undesirable effects -- does indicate that it is very hard to find such effects and that they are unlikely to be substantial."

But just last year the Australian government seemingly reversed its stance, and made it illegal to sell the M-rated game Grand Theft Auto III in the country, due to the lack of a ratings system that would indicate what it felt was exceptionally mature content. The apparently contradictory attitudes of the Aussie government indicate one of the biggest challenges the video games industry may currently face: the medium is new and research is continually developing. What seemed true one year may be rendered invalid the next.

One of the key researchers in the field is Dr. David Walsh, director of the National Institute on Media and the Family. Walsh readily admits that exposure to violent video games might only be responsible for a portion of aggressive behavior in children, and he notes that in many of the households where children play violent games, more serious problems such as a lack of parental supervision are also frequently found. But some of Walsh's most recent research -- published after the Surgeon General's report -- indicates that exposure to violent video games can not only lead to an increase in aggressive tendencies in children but also to an establishment of aggression. In a recent study, levels of hostility in children were measured prior to exposure to violent games. The children were divided into groups who already displayed hostility, and those who did not. Then one-half of each group was asked to play violent games.

"Not surprisingly," Walsh observes, "the hostile or angry kids who play a lot of violent video games display the most violence in real life. But then after that what we found is that the kids who are low in hostility by psychological measure, but yet play a lot of violent video games, were more aggressive and violent in real life than the highly angry kids who didn't play violent video games."

For its part, the video game industry notes that much research remains to be done, and many of the results have yet to be duplicated. In addition, ultimate responsibility for what reaches children must lie with the consumers themselves, who are often parents. "If their kids want a certain game," Nintendo's Perrin Kaplan says, "they go ahead and buy it to make them happy. And we go to great lengths to make sure that there are ratings on the boxes and that we educate and show screen shots and do whatever we can to make sure that the consumer is buying a product that they want their kids to play."

But with growth on the scale that the industry exhibited last year, video games are likely to receive increasing attention from the scientific and legal communities alike. Nevertheless industry analysts remain confident that while business will continue to grow, the increased sales of M-rated games is an anomaly, brought about by an older crowd purchasing the newer machines. Rich Ow, with one of the industry's leading research firms -- NPD Funworld -- believes that the Playstation2 and the Xbox will eventually develop more of an all-ages audience than they have right now. "I think with the new systems that came into play this year," he says, "we may have actually experienced a phenomenon where a lot of the primary demographic for the new platforms may have played a role. The Playstation2 right now may still be skewed to the older demographic, as well as the Xbox. And when I say older, I mean in the ranges of 18 and over. So I think this may have actually been a phenomenon due to the demographic of the buyers of these platforms, initially. But eventually they will move towards the E-rated again."

Regardless of the direction games and their ratings take, with some form of video game system in 46 percent of all American homes, and with 60 percent of Americans estimated to be playing the games, last year's growth is being forecast as the beginning of a continued increase in sales for the industry. The question remains whether that growth will come from the family-oriented titles that have driven the industry in the past, or from an increasingly older audience with a taste for mature and even violent entertainment.

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