Mike Gallagher is the CEO of the Entertainment Software Association, which is the political arm of the interactive industry. The ESA established the Entertainment Software Ratings Board in 1994 in response to criticism of violent content found in video games. They also won a supreme court case that established video games as a form of protected speech under the First Amendment. Mike suspects that VR will face a lot of political pressures similar to what video games have faced in the past.
The ESA is preparing to defend VR content creators as a part of their mission to protect the frontiers of the interactive industry. He sees VR as just a part of a larger trajectory of media ranging from cave paintings to books to movies to video games that has been moving towards more immersion and realism. Now that the ESA has established video games as a protected First Amendment right, then the burden of proof is going to be on the counter argument as to why VR should be treated any differently than any other media.
LISTEN TO THE VOICES OF VR PODCAST
Become a Patron! Support The Voices of VR Podcast Patreon
Theme music: “Fatality” by Tigoolio
Subscribe to the Voices of VR podcast.
Rough Transcript
[00:00:05.452] Kent Bye: The Voices of VR Podcast.
[00:00:11.977] Mike Gallagher: I'm Mike Gallagher, and I'm the CEO of the Entertainment Software Association, which is the voice of the interactive entertainment industry. We are the place where the leaders of the industry gather to set the path for the future. And then ESA's job, me and my team, our role is to go out there and make sure that we're protecting the frontiers of the industry wherever they are. And 10 years ago that might have been something like connected gameplay. Gameplay that used the internet. Today that's called gameplay. It's automatically assumed. The new frontiers that we're looking at and making sure we're doing our job to extend and protect the frontiers is virtual reality, augmented reality, mixed reality, which is a topic of discussion for the last couple of days here.
[00:00:53.875] Kent Bye: So what does that mean exactly to protect the frontiers?
[00:00:56.697] Mike Gallagher: What that means is we are the policy and political arm of the industry. So as governments look to make laws or rules about how entertainment should be consumed or how it should be taxed or who should have it and who shouldn't, We're the ones that come up with what we think the right policies are so that the industry can continue to grow. We work with parents, we work with third party groups to make sure that those are socially responsible and we're growing the market. But at the same time, we stop those types of activities that we think would be harmful to the growth of the industry. So when you have a new technology like virtual reality, augmented reality, it's natural for policymakers to either be afraid of it, try to control it or stop it, much like they did with rock and roll music or cable television or MTV. or to control it somehow, to bend it to their will. It's our job to go in there and make sure that doesn't happen.
[00:01:46.853] Kent Bye: And so what's an example of, like historically, where politicians have been trying to exert their will on the gaming industry, where you've had to, as a collective, come up with the counter-argument to come up with a policy that works for everybody?
[00:02:00.154] Mike Gallagher: Well, I'll give you two different examples, one that ended well and one that did not. Well, actually both ended well from the video games perspective, but one pursued a path which has grown the industry and it's been terrific for parents and families, and the other one ended in a Supreme Court victory by the industry at the expense of those who wasted a lot of taxpayer money. The one that ended well was we were pressured as an industry 20 years ago to develop a rating system. because the games weren't rated, parents didn't know what they were buying, they were finding some of the content to be inappropriate for different age groups, there was pressure applied on the industry, the industry responded with the ESRB. The ESRB is now the gold standard in ratings, it's trusted by parents, and it's created an environment where parents feel very comfortable buying video games in their traditional format, the one that you see in the store shelves today and on your mobile device, because we're proactive in responding to that challenge from government. One that did not go well was when the state of California in 2005 passed a law that sought to control the content of video games through its own rating system and then to impose that rating system at retail and fine retailers if any games were sold to underage purchasers. That type of regime was a complete mistake. It violated the First Amendment. We had to fight that through 13 different court cases over eight years, culminated in a Supreme Court victory in 2011, Brown versus ESA. And in that case, we won seven to two and established video games as having the same First Amendment rights and privileges as motion pictures, books and music. Those types of outcomes, both of those ended favorably for the industry. Both of them required the industry standing together and answering a question in the first case, developing a rating system, and then in the other, defeating someone who had a completely flawed view of the industry and a flawed approach to solve some fictional problem, and today you see the industry flourishing because of that. VR potentially could face similar challenges, and I think listening to the speakers in the room and the ability to create emotion, the ability to create immersion, the ability to enhance feelings by tenfold, which is what some of the speakers have spoken about, that type of thing is precisely what triggers the impulses that can be very unhealthy in policy makers.
[00:04:10.656] Kent Bye: Yeah, and what do you see as, you know, on the horizon, some of the challenges that may come up in terms of where you as an organization would have to step in in terms of virtual reality then?
[00:04:20.095] Mike Gallagher: Well, we heard several of them from speakers here at VRX. You know, one of them is content itself and what's the thought process about how we rate content and how do we make sure that responsibly we're working with consumers, that consumers know what they're getting and it's a safe product. And that has to do not just with the content, the gameplay or the story that might be going on, but also what the device does itself. When you cover someone's eyes and then put them in motion, that cannot end well. So there's a whole series of steps that the industry would need to take to make sure that those are properly labeled, that the consumers are prepared to deal with them in a responsible way, and that there's a good thought put into being a responsible producer of a great product in the U.S. today. Otherwise, you run afoul of all sorts of problems, whether it's FTC issues around disclosure or whether it's product liability issues if the product is considered dangerous by some lawyer and their clients. So, the industry needs to be smart about that up front. Another one is ratings themselves, that you need to rate the games and the content so that parents are comfortable bringing those in the home. Another one is parental controls, because if you're going to have content that is not appropriate for certain age groups, the best way to make sure as a parent, and let's be clear, parents are the ones that are buying these devices, they're not cheap. If they're going to bring this in their home, there should be parental controls on the devices so that they could lock. certain content out and it would be safe for their family to use in a way that they thought best. So those are some of those issues. But then you get into things like virtual currencies or copyright protection or patents and patent reform. All of these are live issues today that impact the industry today and they will dramatically impact the future of this segment of the industry in VR and AR.
[00:05:57.406] Kent Bye: And maybe you can expand a bit more, what do you mean about the currencies and the patents? Give a little more context as to how that plays out.
[00:06:04.330] Mike Gallagher: So I'll point at currencies, game systems, and then patents. So currencies are used to facilitate commerce within a game and oftentimes their industry has created virtual currencies. These are of great utility to gamers. When they play, they're a natural thing to have. They're also a way of monetization for the industry that gives us a leg up on motion pictures and music. and other forms where digital entertainment is eating them alive, it's an opportunity for us because of things like virtual currencies. The government, the federal government, through the U.S. Treasury Department, has published rules to control and regulate those, largely because they're concerned about digital currencies feeding or fostering revenue flows for terrorists or illegal enterprises. Well, that's not what's happening in our industry. We know that's not true. You don't convert Xbox Live points into some sort of contraband in the Middle East. That's not how it works. But we have to go in and try and help straighten all that out. So on virtual currencies, that's one that's relatively obvious. When you look at systems, today a game system like a console, it's an entire ecosystem of activity. It's games, it's monetization, it's hardware, it's software, it's downloads and all of those things. In the eyes of a creator of that system, say today's Xbox or Oculus, five years or ten years from now, and you look and say, well, who's the next big player in VR? Could be Oculus, could be any one of the companies here today. They've created a system to recover the investment in all that hardware and in the games that are created. That system is protected by the DMCA, the Digital Millennium Copyright Act, but every three years, People line up at the copyright office and ask for exceptions to the DMCA to jailbreak, hack, or break open sealed systems like a console today. We have defended consoles several times now, very successfully, in saying that those systems should not be allowed to be jailbroken because of some concerns that are raised by different groups, because the integrity of the economics of the system is more valuable than that. and we've prevailed on that. So those two are very important and they're relevant to what you're hearing may be the future trajectory here. So patents today, this is how you take your idea, the new thing, and make sure that you are able to recoup your investment and reap a profit from coming up with something that's truly revolutionary. Our patent system is constantly being challenged in the courts, it's challenged by policymakers, and today patent reform is being considered in Washington, D.C. to a very great degree. There are two different approaches that are being debated, but in the imminent future we would expect to see that reform. Well, the industry as a whole through ESA is speaking to policymakers and saying if you want to continue to create jobs, and the average wage in our industry is $95,000 a year, it's great to be in the video game industry because of innovation and the like. If you want to keep that industry growing here at home, you need to do the patent reform in the right way. And so let's make sure you do it in a way that's going to continue to grow interactive entertainment and similar industries. And those are three examples.
[00:09:00.178] Kent Bye: My own personal experience with having immersive experiences within virtual reality is that I have had experiences where I shot a man in virtual reality and it was different than anything else that I've ever experienced in terms of 2D mediums or video games. Having had some traumatic experiences in my life, I could say that there was some low-level triggering of PTSD that I experienced. And so, I'd imagine that because virtual reality has the capability to treat PTSD, it also has the potential to cause or trigger PTSD in people, given that they may have already had some experiences in their life, trauma, that is just getting activated. It may not cause it, but it's hard to kind of delineate where the beginning and ending happens when it comes to trauma. So these, I think, are real concerns when it comes to virtual reality. And how do you see that kind of playing out in terms of rating systems?
[00:09:49.118] Mike Gallagher: Well, it's a great question, so I'll give you two lines of thinking. One is absolutely that VR and AR have tremendous potential to help in the education space in treatment of different mental illnesses. We heard a presentation today that a pain reduction, dramatic reductions in pain without using any medications at all through use of VR, that's powerful. Those are things that should be fostered and grown and have an opportunity to flourish because that's what innovation's all about. And so I expect to see more next year when we come back along those lines. And I would expect there to be a very strong appetite amongst policymakers and the country as a whole to see those types of things take root. Now the other side of it that you pointed to where the content may seem too real, too visceral, That's been the march of content since the beginning of time. And Justice Scalia's majority opinion in the Supreme Court case that we won on behalf of the industry points to this. And it starts with cave drawings on the wall that were drawn 10, 11,000 years ago. Those were the first representations of art or immersion. Then you look into a book, and when you read a book, a good book, you are drawn in. A good author pulls you in. When you looked at a movie for the first time, again, motion picture industry went through this more or less 100 years ago, that was a whole different way of engaging with content, and it was a moving picture, and that was something that was going to potentially lead to disturbed people doing things or cause behavior. Never did. It did not have any effect. Here we are today doing just fine with all sorts of movies available to us, again, with a rating system, a robust rating system. You march in, you get cable television, the internet, music, went through the same things, true crime novels. There was an outcry in this country about 50 years ago that true crime novels, novels where you would learn how to commit a crime, were going to teach young people and old people alike how to go inspire them to commit crime. Of course, it did not come to pass. And the Supreme Court opinion follows that arc. of development and entertainment history. I see VRAR as being just another movement along that arc and one that we would seek to include in that same type of protection. But you can bet that critics will be out there saying it's not entitled to that same treatment.
[00:12:07.784] Kent Bye: And so what was the, you know, you cited different judgments from the Supreme Court. What is it, just a basic First Amendment right to be able to express yourself, given that there is an appropriate rating system so that people can kind of choose what level of intensity they want to have?
[00:12:21.915] Mike Gallagher: Well, what it is, is that the three courts said, you're allowed to write whatever you want, you're allowed to speak whatever you want, other than fire in a public theater and things of that sort or slander. You're allowed to write a song, you're allowed to make a motion picture about virtually anything that you would like. That's your expressive right as an American citizen. You can also make a game and sell a game because games are equally expressive and the government has no role in controlling, taxing, or otherwise limiting that right. That's what that case stood for and up until that point it had not been decided with finality.
[00:12:55.578] Kent Bye: And there's also, you know, the potential for like, hey, you know, kids are playing violent video games, that's going to cause them to go actually take guns and shoot up a high school or something like that. And so, is that something that has also been within the Entertainment Software Association's legal battles to be able to give protections or fight against any sort of restrictions when it comes to violence in video games?
[00:13:17.314] Mike Gallagher: ESA is the tip of the spear that defends the industry against those types of allegations. And we have been for 20 years now. When the media or politicians come at the industry and make false claims that there's real world violence caused by fantasy violence, we are the ones that bring forward the information, the research, the testimonials, the academics that point to the data that proves that that is absolutely not true. However reflexively popular it might feel at the time to cable television after some sort of tragedy has happened, it's just flat not the case. And over time, we have proven that over and over and over again. And the Supreme Court decision that I referenced specifically says that the research on the other side of that, the research that quote says there is a link, is wrong and debunked. And it names the researchers that did that research by name. I mean, so it's a very powerful outcome, but it takes constant vigilance from ESA to continue to protect that frontier so the industry can continue to innovate, including through VR and AR.
[00:14:22.418] Kent Bye: Yeah, and I wonder if that's some artifact of the difference between a 2D medium and your ability to have an objective distance from it versus being in an immersive 3D medium when you have the ability to overtake your perceptual system and communicate directly to your limbic mind. Your rational mind may have one interpretation of it, but your visual experience may have a completely different experience. I think that right now, I don't know if that research even exists to be able to defend that there is no causal link between, you know, experiencing extreme violence within a VR experience to then, you know, what impact that even has, especially when you have phenomena like the virtual body ownership illusion where you actually feel like you're in the scene rather than having something where you're watching a movie. When we watch a movie, we see it, but we don't have a feeling as if we were there. And so I wonder if that's something that, as things move forward, if the research has to be done, or how do you defend against something where nobody really knows?
[00:15:18.885] Mike Gallagher: Two thoughts on that. I would ask Cameron, who did Avatar, whether you felt like you were really there when you're watching one of his movies in 3D. If you look at Titanic and 3T or Avatar, the full intention of 3D, and it exists in other films today, is to pull you in, is to give you that feeling of suspension of disbelief, to pull you in where you have agency, which is a word that's used here quite a bit. And really well done motion pictures do create that. Books do create that, where they feel like you're there. And that's what makes them a fantastic entertainment vehicle. I see VR as an extension of that same principle. That's the principle ESA will defend, and the burden of proof in this case, because of the work we've done for 20 years, lies on the other side of the equation, not on the innovators, the artists, and the entrepreneurs that are in this room.
[00:16:08.712] Kent Bye: Cool. So when it comes to virtual reality, when did that first come onto your radar in terms of the Entertainment Software Association?
[00:16:17.015] Mike Gallagher: I would say the first year that Oculus exhibited E3, which I believe was three E3s ago, so that'd be two and a half years ago, right about then.
[00:16:24.157] Kent Bye: And then what was your, like, how did it sort of come into your purview in terms of that it's going to be something that you're going to have to deal with?
[00:16:30.539] Mike Gallagher: It came, I think, as it grew to greater acceptance and greater excitement, and you see the number of companies' participation. For example, Xbox or Microsoft and Sony PlayStation, Warner Brothers, they're major members of ESA. They all are very aggressively interested in VR and AR. And so it was a natural extension of their interest, and E3's magnet for new technology and innovation, that those two forces together really are what ignited it for us. And we're always looking ahead, trying to see where the industry's going, and proactively putting ourselves in a position to protect that new frontier. So that's really probably about the time that started for us.
[00:17:11.578] Kent Bye: And finally, what do you see as the ultimate potential of virtual reality and what it might be able to enable?
[00:17:16.863] Mike Gallagher: What's really fun is, I don't pretend to be a wise soul on this, but I think I might have gotten one thing right. Five years ago at E3, the only 3D interview of me was done at E3, and I said that the future of video games was the holodeck of the enterprise in Star Trek Next Generation. And I sit in this room and listen to what's coming down the pike, and we're awfully close to creating that. So I'm going to stick with that original prediction from five years ago, because it looks like it's holding true at the moment.
[00:17:48.123] Kent Bye: Awesome. Well, thank you so much. Yvette, thank you. And thank you for listening. If you'd like to support the Voices of VR podcast, then please consider becoming a patron at patreon.com slash Voices of VR.
