The Political Game: It's the Economy, Stupid
by Dennis McCauley 
{ Nov 17th 2006 at 2:25PM }
Each week Dennis McCauley contributes The Political Game, a column on the collision of politics and video games:
Canada gets it.
The Canadian government is offering grants and a contest to support emerging game developers. The program is called the Great Canadian Video Game Competition, and ten small firms will receive funding. The best of their game projects will be recognized at next year's GDC. The overall winner will receive a half-million dollar award.
Okay, that's Canadian dollars, but still. Why is Canada doing this? To help create Canadian IP and Canadian jobs.
So why do American politicos expend so much time and energy on futile video game content laws instead of helping grow the industry and work to keep the jobs it creates from going to New Delhi or Saigon or even Montreal?
It's baffling. Like moths to a flame, U.S. elected officials waste incredible amounts of time and energy each year on video game laws that aren't worth the paper they are printed on. In Utah this week, the legislature decided to once again consider a "games-as-porn" bill in the upcoming session, against the advice of the state's Attorney General. The Utah pols also chose to ignore the fact that a very similar bill has been blocked by a federal judge from taking effect in Louisiana.
While the nanny staters trip over one another in their rush to legislate games, they are missing an opportunity to embrace an industry that grows bigger every year, one that could brings jobs and educational opportunities to their constituents.
ESA boss Doug Lowenstein talked about the economic benefits of the video game industry at this year's E3, pointing out that U.S. sales of games for all platforms surpassed the $10 billion mark in 2004. But more importantly, the game industry stimulates another $7.7 billion in related spending, bringing its net effect to $18 billion.
Lowenstein quoted from a research report by two professors, Crandall and Sidak - hired by the ESA, let's be up front about that - who said, "the video game industry has grown into a vibrant business that creates thousands of jobs, improves the performance of other industries, and spurs technological advancement. video games play a real role in maintaining America leadership in information technology and are a powerful driver of the digital economy so important to America's economic future."
The ESA president cited other factors such as the ripple effect of processor development for the next-gen consoles which in turn leads to advancements in other areas. A senior IBM exec told Crandall and Sidak, "IBM places great value on chips made for entertainment software that goes beyond revenue and profits. These chips help drive technology in other areas."
Indeed. IBM is marketing the PS3's Cell processor to medical tech firms for use in manufacturing diagnostic imaging devices. Those virtual home tours on Realtor.com are based on 3D game engines. The cable and phone companies love gamers, too, since they drive demand for broadband services.
Crandall and Sidak also reckoned that the video game industry was good for 144,000 well-paying jobs in 2004, a figure that will nearly double by 2010. Maybe the game-legislating politicians would prefer if everyone worked at McDonald's? Video games also offer countless educational benefits, including the drive to learn math and science by kids who hope to become the next Will Wright, Shigeru Miyamoto or Cliffy B.
It's time for U.S. politicians to embrace, not legislate, the video game industry. If we don't do it, other countries will. Democratic strategist James Carville said it best:
It's the economy, stupid.
Dennis McCauley is Editor of GamePolitics.com and writes about games for the Philadelphia Inquirer. Opinions expressed in The Political Game are his own. Reach him at
Canada gets it.The Canadian government is offering grants and a contest to support emerging game developers. The program is called the Great Canadian Video Game Competition, and ten small firms will receive funding. The best of their game projects will be recognized at next year's GDC. The overall winner will receive a half-million dollar award.
Okay, that's Canadian dollars, but still. Why is Canada doing this? To help create Canadian IP and Canadian jobs.
So why do American politicos expend so much time and energy on futile video game content laws instead of helping grow the industry and work to keep the jobs it creates from going to New Delhi or Saigon or even Montreal?
It's baffling. Like moths to a flame, U.S. elected officials waste incredible amounts of time and energy each year on video game laws that aren't worth the paper they are printed on. In Utah this week, the legislature decided to once again consider a "games-as-porn" bill in the upcoming session, against the advice of the state's Attorney General. The Utah pols also chose to ignore the fact that a very similar bill has been blocked by a federal judge from taking effect in Louisiana.
While the nanny staters trip over one another in their rush to legislate games, they are missing an opportunity to embrace an industry that grows bigger every year, one that could brings jobs and educational opportunities to their constituents.
ESA boss Doug Lowenstein talked about the economic benefits of the video game industry at this year's E3, pointing out that U.S. sales of games for all platforms surpassed the $10 billion mark in 2004. But more importantly, the game industry stimulates another $7.7 billion in related spending, bringing its net effect to $18 billion.
Lowenstein quoted from a research report by two professors, Crandall and Sidak - hired by the ESA, let's be up front about that - who said, "the video game industry has grown into a vibrant business that creates thousands of jobs, improves the performance of other industries, and spurs technological advancement. video games play a real role in maintaining America leadership in information technology and are a powerful driver of the digital economy so important to America's economic future."
The ESA president cited other factors such as the ripple effect of processor development for the next-gen consoles which in turn leads to advancements in other areas. A senior IBM exec told Crandall and Sidak, "IBM places great value on chips made for entertainment software that goes beyond revenue and profits. These chips help drive technology in other areas."
Indeed. IBM is marketing the PS3's Cell processor to medical tech firms for use in manufacturing diagnostic imaging devices. Those virtual home tours on Realtor.com are based on 3D game engines. The cable and phone companies love gamers, too, since they drive demand for broadband services.
Crandall and Sidak also reckoned that the video game industry was good for 144,000 well-paying jobs in 2004, a figure that will nearly double by 2010. Maybe the game-legislating politicians would prefer if everyone worked at McDonald's? Video games also offer countless educational benefits, including the drive to learn math and science by kids who hope to become the next Will Wright, Shigeru Miyamoto or Cliffy B.
It's time for U.S. politicians to embrace, not legislate, the video game industry. If we don't do it, other countries will. Democratic strategist James Carville said it best:
It's the economy, stupid.
Dennis McCauley is Editor of GamePolitics.com and writes about games for the Philadelphia Inquirer. Opinions expressed in The Political Game are his own. Reach him at
Reader Comments (Page 1 of 1)
Nanka @ Nov 17th 2006 2:31PM
Living in Montreal is so great :)
Even better when you work at Ubi
Drav @ Nov 17th 2006 2:35PM
This is what happens when the government takes on the role of protecting your "safety" instead of protecting your rights.
crono141 @ Nov 17th 2006 2:33PM
Good read!
Get ready for the "american's are stupid" and "its all the right wing evangelicals fault" even though neither are true.
Nic @ Nov 17th 2006 2:34PM
I'll second that. Well, when you have enough people to actually elect someone like Bush, twice, you shouldn't be so surprised by all this.
The thing with the USA is it is the country where you'll see the most unbelievable things in the world, both good and bad. That's a lot of good, but that's a lot of bad too.
BlindsideDork @ Nov 17th 2006 2:44PM
why? in one word...
SCAPEGOAT
Parents and figureheads (not all!) don't want to accept responsibilty for kids, youths, teens, young adults, etc.'s actions. They want something outside of themselves to cause it so they don't look like a bad guy. And alot of people are naive when it comes to video games and stuff in general and they hear something bad, they can tend to latch unto it.
TheKingInYellow @ Nov 17th 2006 2:38PM
There are days when I truly love my country.
I'll love it even more when we vote Bush's lapdog out of the PM's office.
Todd @ Nov 17th 2006 3:43PM
Conservative politicians preach to the religious zealots that video games are warping young minds and causing violence. It's really just a ploy for politicians to tap into a growing concern (i.e. frenzie) that religious faithfulls believe in order to gain support, admiration, and votes.
Once the politician has left your zone, you're a distant memory... but they'll remember you for your generous vote. Weee, politics is fun!
Todd @ Nov 17th 2006 2:38PM
Conservative politicians preach to the religious zealots that video games are warping young minds and causing violence. It's really just a ploy for politicians to tap into a growing concern (i.e. frenzie) that religious faithfulls believe in order to gain support, admiration, and votes.
Once the politician has left your zone, you're a distant memory... but they'll remember you for your generous vote. Wii, politics is fun!
crono141 @ Nov 17th 2006 2:41PM
Pretty sure Joe Leiberman and Hillary Clinton aren't taking the right wing religious zealot stance. Just a theory...
Goodbye Lik-Sang @ Nov 17th 2006 2:46PM
TheKingInYellow, every PM is a US lapdog...it's what they do best.
One thing that is lame (and I say this as a Canadian) is the amount of US bashing that goes on in Canada. Even our Government propaganda channel CBC does it on a regular basis.
After a few vacations in the US I know that they have great people living there and they shouldn't be insulted to instill some sort of "pride" in Canada.
If that's the only pride we have then we are lame.
About this project:
This move is a good one and I hope the money makes it to developers that need it (not backroom dealmakers friends).
El Tiante @ Nov 17th 2006 2:50PM
So the American tax payer should subsidize the video game industry? What other fast growing, highly industries should be able to reach into my pocket? Exxon?
Rabish12 @ Nov 17th 2006 2:53PM
#9: Get over it. Television here plays off the "stupid American" stereotype the way that television in the US plays off of the myriad stereotypes there are about Canadians. It's not for pride, it's for entertainment, and we're not the only ones who do it.
NETNAVI @ Nov 17th 2006 2:54PM
What? you guys never heard of pork laws? this is how these crooks in congress make their millions.
As sad as it is noone with the clout and position will ever join forces with people to stand up against these idiots that we "allegedly" vote into office.
And we all know this to be true. Im sure you guys must watch "The Daily show" and that's just the very tip of the tip of the ginormous iceburg that is the US government.
Thryon @ Nov 17th 2006 3:54PM
I was excited by the contest, till you read the fine print. This contest is only open to small companies, that already have secured some financial backing. One of the stipulations is to demonstrate external endorsement or financial support from publishers or investors in the amount of $50,000. Unless you where lucky to secure a dozen PS3s and resold them on Ebay, you will need to have people "invest" in your game idea, and no one will invest that much money in some unproven game. I predict another typical FPS or platformer with a Canadian twist (read beaver instead of hedgehog).
Shadow @ Nov 17th 2006 3:36PM
Easy with knocking the Canadian Dollar. the US dollar is only worth $0.12 more then the Canadian and is still only 3rd in the worlds top ten financial markets.
News flash your money really isn't worth all that much.
Campion @ Nov 17th 2006 3:41PM
Exxon already does, El Tiante. Their lobbyists had a big headstart.
Grunken @ Nov 17th 2006 3:44PM
FYI - $500,000 CDN = $436,338 US. Nothing to scoff at.
The american dollar is much weaker than it use to be. This isn't 1999.
Steve @ Nov 17th 2006 3:44PM
If Canada wanted to help its economy it should do so by helping one area of the economy at the expense of another. That's exactly what corporate welfare (which is basically what this is) does.
It may come as a surprise to people who get their political knowledge from celebrity gossip magazines, but the US constitution forbids such actions by the federal government. Article 1 section 8 clearly defines everything congress is allowed to legislate, and something like this is not included. Now Congress routinely goes beyond its constitutionally-permitted limits, but speaking strictly on a "why can't we do this here" this is the legal reason.
If you want to help the video gaming industry just institute smart policies that help the entire economy:
1) Remove some of the excessive roadblocks that government puts in the face of business. If you've ever looked into the rules and regulations every business must comply with you'll wonder how any businesses can even exist.
2) Institute the FairTax plan: the entire income tax system is a complicated, bloated joke with massive administrative costs. The income tax code is littered with little bonuses to the pet industries of all the politicians that have been around since this disgrace was imposed onto society.
3) Pass legislation to ban stupid lawsuits. Cigarettes. Fast food. Whatever. I'm so sick of people looking at the court system as a big lottery machine. Someday video game companies are going to be sued for some stupid reason and succeed: "My kid was shot because he played Gears of War pt4 so I'm suing Microsoft!" Hell, OJ is walking free but let's cripple a video game manufacturer!
[/rant]
TB @ Nov 17th 2006 3:45PM
When comic books were released they spent the same ammount of time and energy in the government to ban/legislate them. Comic books were linked to juvenile delinquency and even violent crimes. Same thing, different form of media. Still just as stupid.
Drav @ Nov 17th 2006 3:59PM
Bottom line: If young people do it and old people don't, expect a backlash.
Mr. Khan @ Nov 17th 2006 4:12PM
aye, Harper is a bit of a lapdog, but that's the price Canada pays for keeping a stolid alliance with America
One could make the assumption that Bush is Ehud Olmert's (of Israel) lapdog, since America does whatever Israel says, nowadays, and could just as easily make the assertion that he is the Saudi King's lapdog, as well, since we don't attack them even though their government is just as evil as Hussein's
To maintain an alliance, you HAVE to toady a little, very rarely do nations actually make an alliance where both partners are equal
some pirate @ Nov 19th 2006 8:14PM
Woo for Canada. It's awesome here.
mike @ Nov 17th 2006 5:20PM
As others have said, the CDN is doing great, the US Economy is in the tank, you should hold Euros, NOT USD.
HenryJonesJr @ Nov 17th 2006 5:42PM
Ummm, no. Canada doesn't get it. This is just typical government policy that throws your and my money at something when the best thing they could do would be to get out of the way. Government should not be in the videogame business. Government should pave our roads, police our streets, protect our borders, educate our kids, etc. If the videogame business is such a desired industry for Canada, no government incentive should be necessary. Profit is the ultimate motivator, and that doesn't require any of your or my tax money to create.
HenryJonesJr @ Nov 17th 2006 5:49PM
And mike(#22) I'd love for you to tell me exactly how the US economy is "in the tank". Maybe that's wishful thinking on your part, but maybe you should look at the numbers. Take a look at unemployment numbers, job growth, stock prices, interest rates, housing markets, you name it. You don't like the US, you don't like our President, you don't like our wars, that's cool, you can argue that but you'll have a tough time trying to argue our economy is "in the tank".
boylie @ Nov 17th 2006 6:16PM
@ 19.
there are 3 parts to the competition: being in the top ten gets you $50000, and it gets you mentors to help make pitches to investors to come up with more. in the second round you need to secure $50000 in order to get the full $250000 (they give you 5 dollars for every dollar your raise). i think they do the same for the $500000 prize too... it may sound crappy to have to get all this money on your own in order to get some for free, but it's something, if you wanna be a real company, that you're gonna have to get comfortable anyway.
i attended the meeting in toronto yesterday, and me and my team are going to apply and see if we can get into the top 10.
soccerdrew17 @ Nov 17th 2006 7:15PM
I hope that we subsidize all growing industries. 10% less taxes could help the industry grow 50% faster and equal 135% of the taxes before. That is how you say less is more. It would also create local (US! US! US! US!) jobs. Helping growing industries, not established ones brings the money in.
Drav @ Nov 17th 2006 8:31PM
Well said, HenryJonesJr.
Derek @ Nov 17th 2006 8:15PM
I wouldn't jump to any conclusions about the Canadian people supporting this contest. A lot of people will be very upset when they find out that millions of tax dollars are going to videogames. Most people up here haven't heard about this contest yet, and I'm sure a large segment of the public is going to be furious when they find out.