States do a delicate dance with gamers

They lure the industry with incentives, while cracking down on adult content.

Ann Hermes
Local ‘Band’: Bryn Bennet (left) and Ben Currier (top, sitting) of Harmonix, makers of the popular music video game ‘Rock Band,’ challenge fans at a Best Buy store in Boston. Massachusetts Gov. Deval Patrick has tried to woo more game companies to his state.

For some politicians, video games have been a wonderful target. More than a few lawmakers have burnished their family-values credential by speaking out against the medium as a peddler of smut and gore.

In the past few years, state legislators in California, Louisiana, and Massachusetts submitted or passed bills outlawing the sale or rental of mature games to children. Judges have consistently thrown out such measures as unconstitutional. Just last Friday, a California appeals court struck down such a law. It ruled that targeting violent or sexual video games, while not expanding the law to cover R-rated movies or suggestive books, unfairly singled out the free speech rights of a particular industry. California lawmakers vow to continue the appeals process.

Yet some signs indicate that the relationship between politicians and the industry is getting a bit cozier. About a dozen states are now wooing video-game companies to their cities. Enchanted by gamemakers’ big budgets, high-skilled jobs, and purported resistance to recessions, state lawmakers are backing legislation that aims to attract a bigger slice of the $22 billion industry.

“Games are still a little challenging [for some politicians],” says Dennis McCauley, editor of the blog But “at the state level, politicians are really sitting up and taking notice of what video games can do for their economies.”

During a recent trip to the West Coast, Gov. Deval Patrick (D) of Massachusetts pitched his state as the East Coast hub of gaming technology. Canadian officials have actively courted video-game designers and publishers with tax incentives of up to 40 percent and 37 percent salary subsidies.

“The entertainment-software industry has become a recognized part of our cultural landscape, as nearly two-thirds of our nation’s households include someone who plays computer or video games,” wrote Gov. Rick Perry (R) of Texas in his message declaring Feb. 3 “Entertainment Software Day.” In 2007, Texas directed $20 million to film, television, and video-game incentives. Governor Perry wants to triple the program in the next budget.

A big driver behind this push to get chummy with the industry: money. As traditional manufacturing jobs erode, some point to the young medium as a flourishing high-tech industry.

In 2006, the growth rate of Texas’ video-game industry was nearly quadruple that of the state, according to the Entertainment Software Association, an industry group in Washington.

The industry’s growth rate has slowed somewhat with the rest of the economy. But sales continue to grow. Last holiday season was the biggest in video-game history. Sales hit $5 billion in December, nearly equalling what the industry earned in all of 1997, according to the retail research firm NPD.

“Entertainment is usually recession-proof,” says Morgan Webb, cohost of X-Play, a TV show that covers video games on the G4 cable channel. During the Great Depression, people flocked to the movies. During this recession, it seems people are flocking to their Nintendo Wiis.
Beyond sheer economics, Ms. Webb says that video games are getting noticed because of a generational shift in politics.

“There’s a gradual transition happening, where younger politicians are starting to come up through the ranks and gain power,” she says. These newly elected officials grew up with game controllers in their hands, and therefore are less likely to steer toward histrionics when debating the subject.

But the courtship between politicians and video-game companies has its limits. For example, Texas withholds financial incentives for games that are rated “Mature” or “Adults Only.” It does not hold back incentives for the production of R-rated movies or mature TV shows. The author of the incentives measure, State Rep. Dawnna Dukes (D) of Austin, did not return requests for comment.

Mr. McCauley of GamePolitics attributes the uneven distribution of restrictions to unfamiliarity with video games and fear that older voters will flip out if tax dollars funded the next offensive title. “Games are relatively new compared to cinema,” he says. “For some politicians, games are new and youth-culture oriented. The bottom line is, they don’t get [games]. They’re more familiar with the movie industry and more inclined to look favorably on it as a result.”

Of course, some game companies seem to go looking for trouble. The political uproar over the Grand Theft Auto series may serve to fuel sales of the mature-rated games. Earlier this month, its designer, Rockstar Games, leaked clips of the latest expansion, The Lost and Damned, which contained gang violence and male nudity.

But such adult games are a small percentage of the titles released each year. As long as it stays that way, McCauley says, states will continue wooing game companies.

“States are really hurting right now,” he says. “They’re looking for new sources of revenue. I think we’re only going to see more of this in the future.”

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