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E3 Report: Video Game Industry Poised for Big Growth Spurt

1 May, 2001 By: Press News

Computer and video games now represent a $10.5 billion industry that eventually could rival the market for movies, according to a trade organization study.

Game sales have grown 15% a year from 1997 to 2000,according to a state-of-the-industry report released Tuesday by the Interactive Digital Software Association, representing video game makers.

The industry's total value was based on game publishing, transportation, wholesale and retail sales, and other related areas.

The industry also created more than 219,000 jobs and paid $7.2 billion in wages in 2000, according to the study. Retail sales of computer andvideo game hardware and software totaled about $7.8 billion.

By comparison, domestic movie ticket sales reached $7.7 billion in 2000, while DVD andvideocassette tape sales hit about $10.8 billion, according to firms that track the film industry.

``The lines will cross soon if the growth projections that we see are true,'' said Doug Lowenstein, president of the software association. ``This industry is going to be growing at 50 to 75% overthe next four or five years.''

Analysts expect a big burst of growth for computer and video games this year, when Microsoft, Sony and Nintendo introduce a new generation of consoles in time for the holidays.

Depending on the game platform, the equipment will feature high-speed Internet access, the ability to play DVD movies and advanced game-playing capacity.

All three companies are expected to show off the platforms later this month in Los Angeles at the Electronic Entertainment Expo, the largest video game trade show of the year.

``The gaming industry is going to control more of the living-room dollars,'' said P.J. McNealy, a senior analyst with Dataquest. ``You start putting a box in front of a TV with a hard drive attached to it, and you can download movies, games, MP3s, anything. And you can watch DVDs.

``So (gaming and movies) are battling for entertainment dollars.''

The growth has caught the attention of lawmakers, who are turning more frequently to experts to offer advice on intellectual property and other issues connected to the industry.

``The entertainment software industry has clearly become more politically involved as it has grown over the last few years,'' said U.S. Rep. Howard Berman, a Democrat who represents the Mission Hillsarea of Los Angeles.

Some game makers also have come under fire by lawmakers for the level of violence contained in games. The association, however, contends that only a small percentage of games incorporate the kind of extreme violence under scrutiny by Congress.

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