The UK video game industry is on the skids and will drop to 5th place worldwide, according to a report by Britain's National Endowment for Science, Technology and the Arts.

According to gamesindustry.biz, the UK game industry, currently in third place behind the US and Japan, will be surpassed by Korea, Canada and China next year. (GP: by our math, that would make the UK number 6). The NESTA report cites a shortage of qualified game industry workers in the UK as well as a lack of global scale game publishers. Financial conditions and poor online game development are also contributing to the gloomy outlook.

NESTA CEO Jonathan Kestenbaum commented:

UK videogames producers are recognised to be amongst the most innovative in the world. Our recommendations offer ways that the Government can boost the power of this sector so that we maintain our strong global position.

 

The generous tax breaks on offer from other countries are resulting in a mass exodus of some of the best talent in the UK. In order to put a halt to this, the UK needs to wake up to the value in this sector and beat these foreign incentives with our own supportive measures.

Among NESTA's proposed solutions are:

• streamlining tax credits for R&D
• focus on developing skilled game industry workers
• matching tax breaks offered by rival nations
• pushing the game biz to do more in the online game arena

While Congress debates whether the U.S. automobile business is worth saving, the government of South Korea has apparently decided to support its video game industry with $200 million worth of aid.

Digital Chosunilbo reports the government backing will last until 2012:

Culture, Sports and Tourism Minster Yu In-chon [seen at left] in a meeting on Wednesday discussing mid- and long-term plans to develop the game industry said the emerging [game] industry had proved to be a future growth engine by accomplishing its billion-dollar export goal for the year 2010 two years early.

Yu promised to draw up 60 projects including a US$200 billion game fund and help the country become one of three countries with the world's largest game industry together with the U.S. and Japan.

Via: GameDaily

It's a good thing that Strauss Zelnick is so good at running media companies.

Because he'd never make it as a financial analyst.

Reuters reports on the Take-Two head's somewhat obtuse view of the current global financial meltdown. Zelnick made his remarks at the Reuters Media Summit:

I don’t think we’re in a financial crisis.

 

The use of the word crisis — I’m loathe to be critical of the media since I’m every bit a part of the media — but I don’t think the word has been especially helpful. We’re obviously in a recession and these are very very trying times.

Zelnick then pushed the metaphorical envelope with this bit of imagery:

We’re still seeing the car crash, and the ambulances are still showing up at the scene. Maybe we’re in the emergency room, but we’re not even in the intensive care unit yet for a lot of these companies. But they will get there.

A separate Reuters report offers the Z-man's take on how the game biz is weathering the current financial crisis ...oops, "very, very trying times":

I think everyone was encouraged by Black Friday. It was better than expectations, but it's pretty hard these days -- being slightly down is the new up.

As we move into the season of giving, it's heartwarming to learn that a top exec with EA Vancouver is giving back to his community in a major way.

As reported by the Globe and Mail, senior VP Rory Armes (left) is among Canadian execs who have gotten involved with Canadian Business for Social Responsibility, a nonprofit which connects businesses with social service organizations.

From the newspaper report:

For Mr. Armes, a commitment to help Vancouver's at-risk youth seemed like a natural fit... His mid-October tour took him to the Potluck Cafe, the Urban Native Youth Association, PLEA Community Services Society of B.C., and Directions Youth Services.

"It drove a point home," says Mr. Armes. "Most of us have teenaged children and we could identify with the problems faced by the kids we met. In our case we could see an immediate fit between what they need and what we can provide."

That fit included making the Potluck Cafe a sort of unofficial caterer to Electronic Arts, and donating used computer equipment and software to Directions Youth Services.

"They told us they needed things that would help boost the self-esteem of the kids they dealt with," Mr. Armes says...

"We are also offering paid time off through the week to any of our people who might want to spend the hours from, say, two to four teaching these kids how to operate the software," he adds.

GP: Kudos to Rory Armes and EA!

Via: Our sister-site GameCulture

Marketwatch has named Activision's Bobby Kotick as one of four runners-up for its 2008 CEO of the Year award.

The respected financial website offers effusive praise for Kotick, along with an amusing tale of how the Activision-Blizzard merger got done:

When [Blizzard CEO] Mike Morhaime first met Kotick, he was looking for a low-key setting to avoid sparking the sort of chatter that often emerges when high-profile business leaders meet in public. Morhaime... chose a steakhouse near his company's Irvine, Calif., headquarters. But he ended up booking a large banquet room by mistake, leaving the two alone and rather conspicuous for the nearly four hours during which they contemplated the potential of a merger creating a new leader in the video-game business...

 

"We wanted to keep it low-key, which was pretty hard to do in this huge room with just the two of us there," Morhaime recalled with a laugh.

Marketwatch notes that Kotick has gamer roots, spending his college days playing text adventure Mystery House as well as arcade classic Defender. Kotick told Marketwatch that he gave up gaming due to an "addictive personality."

The most interesting part of the story, however, is how Kotick came to acquire Activision - and how cheaply:

Kotick and partner Brian Kelly bought a small company that handled licensing for Nintendo's game characters... But Kotick had his eye on making games, so Nintendo  pointed him to Activision, which had made the popular game "Pitfall" for Atari but had since changed its name to Mediagenic in an effort to expand into other areas of software development.

 

Its move ultimately failed, landing Mediagenic in bankruptcy. Kotick and Kelly bought the company in 1990 for less than $500,000...

Over at GamerTell scribe PJ Hruschak is a bit frustrated with a security analyst who likened the Mumbai terror attacks to a "video game killing fantasy."

RAND Corp. analyst Brian Jenkins made the comment during a recent interview with NPR's Talk of the Nation:

We’re talking about a warrior subculture here. And I suspect that those who actually carried out the attack certainly were convinced that going down shooting was better than secretly planting bombs in public places... This in a sense for them was an opportunity to demonstrate their conviction, courage, although it doesn’t require a lot of courage to gun down unarmed people, but it becomes a kind of a real-life video game killing fantasy for the actual attackers themselves.

Jenkins probably meant no offense, but his remarks will likely rile some gamers. Hruschak explains:

Taken out of context, that sure sounds like Jenkins is a gamer hater. Really, he’s just trying to give a visual way of describing the attacks for an aural media. It’s more trying to describe the psychological state of the terrorists rather than specifically likening games to terrorist acts.

Even so, describing bombings as “unmanly” (inferring that gunning down innocent people is manly), indicating these terrorists are part of a “warrior subculture” and that “going down shooting” is a “a more attractive ending” and then summarizing it all as a “real-life, video game killing fantasy” should not sit well with many gamers.

After all, how many people has Cooking Mama, er, Mario killed?

Nintendo is in damage control mode after a DS cart shipped to game reviewers was found to contain a commonly used racial slur.

Kotaku reported yesterday that editor Brian Crecente received a pre-played copy of Animal Crossing: Wild World for the DS. The 2005 title, shipped with secrets unlocked, was intended to show reviewers how content could easily be migrated from the DS game to the recently-released Wii title, Animal Crossing: City Folk.

However, as Kotaku explains, things soon went awry:

When you come upon Baabara, the town's resident sheep, you're greeted with a racial epithet. The word is used repeatedly in your conversation with the sheep.

"I almost forgot about you, N—-a" "So got any juicy gossip for me, N—-a?" "Just thinking about it gets me all excited, N—-a."

Nintendo quickly issued a statement, blaming WiFi for the screwup:

Previously played copies of the were sent to 14 members of the media to demonstrate the ability of players to transfer items to the new Animal Crossing: City Folk for Wii. We regret that an offensive phrase was included without our knowledge via a wireless function that allows user-generated catchphrases to spread virally from one game to the next.

 

This version is limited to 14 copies created for media review purposes only and is not available at retailers. We sincerely apologize for the incident and are working with media who received the game cards to return them to Nintendo immediately.

A study released by watchdog group Common Sense Media this week strongly correlates the amount of time children spend with media to poor school performance as well as negative health outcomes such as obesity, substance abuse and smoking.

Media and Child and Adolescent Health: A Systematic Review is, essentially, a survey of research on the topic conducted over the past 30 years. The study was carried out by researchers from the Yale University School of Medicine, National Institutes of Health, and California Pacific Medical Center.

From a political standpoint, it is interesting to note that lead researcher Ezekiel Emanuel of the NIH is the brother of President-elect Barack Obama's incoming White House chief of staff, Rahm Emanuel. Common Sense Media CEO and founder Jim Steyer (left) discussed the Obama connection with Time:

[Rahm Emanuel] will have a strong position in the incoming Administration. And I am optimistic that you'll see a renewed emphasis, from the White House on down, on media, technology and kids. In that sense, I'm very hopeful that Barack and Michelle Obama will be parents-in-chief and role models-in-chief for our country. Barack talked about it repeatedly through his campaign—turning off the TV, turning off the video games, doing your homework, talking with your kids.

Steyer also told Time that the study deliberately stayed away from issues of violence and media:

The research team decided that there was a voluminous amount of studies that focus solely on media and violence. So they wanted to stay away from that... This report doesn't say, nor would Common Sense ever suggest, that media is the cause of all society's ills, or the sole cause of childhood obesity or risky sexual behavior or smoking or alcohol use among teens. But it is a significant contributing factor...

The study's politicial potential is also emphasized in a press release on the Common Sense Media website which quotes former FCC chairman and CSM board member William Kennard:

The new administration has shown a commitment to children and has already made important statements about how it will focus new attention on technology and media. There is a unique opportunity to make real change in the role that media plays in our children’s lives.

Yesterday on GamePolitics I wrote that watchdog group the National Institute on Media and the Family has been co-opted by the video game industry.

It wasn't the first time I've taken NIMF to task for accepting a $50,000 grant from the Entertainment Software Association, the lobbying group which represents US game publishers. Not surprisingly, NIMF took umbrage at my comments. Spokesman Darin Broton told GameCyte:

We’re never going to stop putting the [video game] retailers or the [video game] industry’s feet to the fire... You can rest assured that we’ll be talking publicly in 2009 about the issue of gaming addiction.

 

[NIMF accepted the ESA grant because] we’re working on a project to create an online tool for parents to tackle the issues of online predators, cyberbullies, etcetera. It’s not a blank check. It’s for a specific spot on the website.

 

Yes, there was hesitation [about accepting the ESA grant], and if there wasn’t hesitation, I don’t think any of us would be doing our jobs. But I think the end result of giving a parent another useful thing for them to make better decisions at home with their kids is worthwhile.

 

I’ve actually laughed at GamePolitics, because before this, GamePolitics was a frequent critic of NIMF for being too harsh on the industry. It’s a case of wanting to have your cake and eat it too.

I look forward to seeing what GamePolitics has to say in early 2009, and see if they still think we’re in the back pocket of the industry.

GP: I'm glad to see that my comments struck a nerve - they were meant to.

That said, I should point out that I have a great deal of respect for Dr. David Walsh and his organization. But there are certain lines which a self-proclaimed watchdog group like NIMF just shouldn't cross. And accepting money from the very industry you claim to be watching is one of those lines - maybe the biggest, brightest one of all. It's the reason why you won't find any paid video game advertising on GamePolitics, which is owned by the ECA, a game consumer advocacy group.

And while I haven't always agreed with NIMF's conclusions or its methodology, I've always believed that the organization's heart was in the right place. Over the years, David Walsh has been unfailingly respectful in his treatment of the gamer community and gaming press. As we all know, not every game critic behaves with such decency.

Beyond that, it's not a bad thing to have rational game industry watchdogs at work. When operating appropriately, groups like NIMF provide a useful checks-and-balances function. Yes, we may chafe at some of their conclusions, but sparking a dialogue about games and their potential effects on young people can't hurt.

In taking GamePolitics to task, Darin Broton indicates that NIMF will have some watchdog-worthy comments early in the new year.

We'll be watching.

FULL DISCLOSURE DEPT: The ECA is the parent company of GamePolitics.

Virtual Peace, a simulation project underway at Duke University, uses game technology to train users in diplomacy and crisis response skills.

Prof. Tim Lenoir is leading the interdisciplinary project, which, ironically, has received assistance from Virtual Heroes, the North Carolina developer best known for its work on the America's Army recruiting game. Lenoir commented:

We’re trying to train people how to collaborate in groups -- particularly in internationally sensitive situations. The goal is to create an environment where people can practice their negotiation skills -- and it’s a whole lot better use of the gaming engine than shooting ’em up.

Players in the game assume the roles of various crisis response organizations such as Oxfam, UNICEF, Doctors Without Borders and the World Health Organization.

Can Delta Force defend against the Flying Penis?

We may find out soon. Wired's Danger Room blog reports that the US Army is planning to set up shop in Second Life. Gen. William Wallace (left), who leads the Army's Training and Doctrine Command, said at a recent conference:

Over the next thirty to forty-five days you might, if you’re one of them Second Life avatar dudes, that likes to go populate islands within Second Life, you will find an Army island in Second Life.

GP: While the Army is dealing with a recruitment problem, Second Life doesn't seem like a cost-effective way to solve it. First, SL is so 2006 - the buzz is clearly gone. Second, even in Second Life's heyday its significance was overhyped. Finally, the offbeat SL crowd seems far removed from the Army's typical recruitment pool.

Still, there are virtual items to be had. Gen. Wallace told Wired:

If you perform well in the activities you get points and those points can be used to buy virtual tee-shirts and baseball caps.

And the used game trade debate rages on...

As reported by gamesindustry.biz,  Phil Harrison (left), speaking at a London event yesterday, took a moderate approach to the argument over used game trading. Of the issue, the Atari president remarked:

There's no doubt that second hand games sales has a macro-economic impact on the industry and a lot of people get miserable about it.

But it's no coincidence that the most valuable games, the ones that have the most lifetime as a game experience, are the ones that don't get resold, that don't get traded.

The games that have the embedded community, the embedded commerce, the extended, expandable experiences, are the one's that you would never want to trade, the one's you want to keep hold of. And that's perfectly in line with our future strategy so we're not that concerned about it.

Atari CEO David Gardner made similar remarks at the gathering:

Second hand game sales represent consumer choice and desire. Obviously, it has economically been extremely painful for the industry... the publishers don't benefit.

 

But as games change and they become more and more network centric, the disc in the box becomes only one part of the experience. As that experience grows then it becomes not such a problem.

GP: Although the used game issue brings out the militant consumer advocate in me, I must give these guys a little credit for moderating their comments (unlike Epic's whiny Michael Capps). Both Gardner and Harrison seem to be saying that digital distribution is the wave of the future, so let's not get too frothed up about used game sales now. And they're probably right.

Still, I've ginned up enough working-class frustration while writing this to be annoyed by Gardner's complaint that "the publishers don't benefit" [from used game trades].

Why is that a problem?

Gardner's comment is typical of the greedy mindset of some game publishers, who already got paid when they sold the game to the retailer. The retailer then made its money when the consumer purchased the game. And when the consumer disposes of the game, the publisher wants another bite of the apple? What is this, the Mafia? Everyone in the food chain has to kick back up to the Don?

Fughetaboudit...

The fallout continues from last month's $28 million federal court verdict which ruled that the NFL players union scewed retired players out of licensing revenue from the best-selling Madden NFL game.

It's a bit complicated, but the short version is that the union (NFLPA) gave retired players the option to sign onto a group licensing authorization (GLA) by which Electronic Arts was entitled to use their image for Madden's classic teams. The retirees, however, alleged that they never received any payments based on Madden. The money went to active players, instead.

Yesterday, former Oakland Raider Dave Pear, a veteran of the silver-and-black's 1980 Super Bowl-winning squad, maintained that the NFLPA continually overinflated the number of players who actually signed the GLAs. At its worst, according to Pear, the NFLPA 's 2007 annual report claims that more than 2,900 retirees authorized their image to be used while court records obtained from last month's trial show that only 22 retired players actually signed a GLA that year. Pear writes:

Does this mean that any players who hadn’t signed a GLA or been included in the list can now sue Electronic Arts directly for copyright infringement if their images were used in their Madden video games without their permission? And does it also mean that the retired players who were excluded from signing GLA’s have been misrepresented by their union, the NFLPA?

While EA is not a defendant in the case, which is under appeal, Madden revenues were by far the largest economic point of contention. If EA has a potential problem going forward, it could be with retired players who never signed the GLA yet were portrayed in Madden. As GamePolitics has reported, the NFLPA conspired with EA to "scramble" the images of retired players. A critical piece of evidence in the recent federal court trial was an e-mail message from former NFLPA exec LaShun Lawson to Madden producer Jeremy Strauser:

For all retired players that are not listed... their identity must be altered so that it cannot be recognized [by Madden players]... Hence, any and all players not listed... cannot be represented in Madden 2002 with the number that player actually wore, and must be scrambled.

When President-elect Barack Obama announced this week that Sen. Hillary Clinton was his choice for Secretary of State, we noted that the diplomatic nature of her new job would distance the former First Lady from domestic social issues, including those relating to video game content.

And, as Hillary moves away from the video game arena, one thing becomes clear: The video game industry no longer faces any high-profile political opposition in the United States. Sounds crazy, I know. But consider that, in 2008:

• Jack Thompson self-destructed. Sure, Thompson will still be a critic, but his recent lifetime disbarment flushed whatever mainstream credibility he had left.
• The National Institute on Media and the Family was co-opted by the video game industry. Earlier this year NIMF accepted a $50,000 grant from the ESA, a mind-bogglingly bad decision. How does a watchdog organization justify taking money from the people it is supposed to be watching? Not surprisingly, NIMF's 2008 Annual Video Game Report Card was a valentine to the game biz.
• Sen. Joe Lieberman (I-CT) has, for some time, been preoccupied by internecine battles with his former friends in the Democratic Party. He hasn't been heard from as a game industry critic since he stood with David Walsh during the release of NIMF's 2007 report card. In fact, most recently, Lieberman (and Clinton) offered their support for the ESRB's new game rating summaries.
• Sen. Hillary Clinton (D-NY), as mentioned, will be focused on foreign affairs.

There are remaining critics, to be sure, but they are fragmented and most lack the national profile of Thompson, Walsh, Lieberman and Clinton. Will one of these emerge to fill the void? Hit the jump to see...

Atari is no longer chasing file-sharers in the UK.

In August GamePolitics reported that five British publishers, most notaby Codemasters and Atari, were filing lawsuits against suspected P2P game uploaders. In one case, an unemployed immigrant mother of two, Isabella Barwinska, was ordered to pay £16,086 (roughly $30,000) for sharing a pinball game.

But a little sleuthing by gamesindustry.biz showed that the law firm employed by the publishers was a sleazy outfit, indeed. The story got even uglier when a pair of older, non-gaming couples were wrongly targeted for sharing games and, more recently, a Nazi porn movie.

Now, P2P advocacy site ZeroPaid reports that Atari has decided that waging war on consumers is bad business:

The lawsuit [against the older couple] was quickly dropped without comment by Atari, but the bad publicity still lingered and called into question the effectiveness of [law firm] Davenport Lyons' tactics.

Now it seems that Atari has decided to part ways with Davenport Lyons altogether, though it hasn't sworn off targeting file-sharers altogether.

Atari's legal department penned an email to UK website The Register, saying, "In relation to file-sharing, our position is that we always retain and reserve the right to protect our intellectual property from illegal copying and piracy. Whilst we are no longer working with Davenport Lyons, we continue to work with legal advisers to protect our rights."

GP: It's good to see that Phil Harrison has Atari focused on its future and not this kind of anti-consumer nonsense.