The Lawbringer: Self-regulation and the video game industry
by Mathew McCurley 
Nov 19th 2010 at 5:00PM
Hello, friends. I hope you all enjoyed the discussion last week about Schwarzenegger v. EMA that took place in the article and in the comments. People get very passionate about the role of government, and I thought the conversation was a very positive one, so thank you. This week, I've got a little more self-regulation talk for you, so please come in, sit, and get ready for another fun look at the video games industry.
Last week, I touched on the self-regulatory nature of the video game industry for just a paragraph or two. It's a bit of a tricky subject, as many people don't know exactly how regulations and laws differ, or rather what is even governed by law. Sometimes we think that state or federal governments have more power than they in fact do. And many of you outside the United States are probably just scratching your heads, anyway. So this week, I'd like to talk about the ESRB and self-regulation of the video game industry in the United States.
As we talked about last week, the federal government of the United States does not control the mechanics behind video game ratings. I think it bears repeating that video game ratings are conducted in a similar fashion to the movie industry. The ratings board that controls movie ratings is the MPAA (Motion Picture Association of America). You know them -- they are the "You wouldn't steal a car..." ad guys who desperately don't want the people who paid to see a movie to steal it.
The MPAA and movie ratings
Here's how the MPAA works, in a nutshell. The MPAA is a group of analysts, corporate guys, film pundits, and others who come together as a rating board and analyze films on the basis of their content. Then, after they have conducted their review, they give the film a rating. These ratings are known to many of you -- G, PG, PG-13, R, and NC-17. Since the MPAA has no state, local, or federal power; these ratings are basically just suggestions. The self-regulation comes in when you factor in the theaters that show these movies.
Since theaters are not by any right guaranteed new film releases, theaters agree to the MPAA and the movie studios that they will enforce these ratings, under the condition that they will have access to new film releases. Essentially, follow the rules and you get to show new movies. This is a form of self-regulation, as there are no federal or state laws controlling the ratings system, but all the parties involved agree to work under the ratings system.
Video games deal with a similar system of self-regulation that only works because everyone under the system agrees to be part of it. The question on all of your minds is, I'm sure, "Why would anyone want to be a part of this system?" Well, it's potentially much better than the ever-looming alternative. First, though, we need to discuss how the ESRB came into being.
The fight against violent video games and the creation of the ESRB
We've been fighting about video games in one way or another for over 30 years. Between 1992 and 1993, the U.S. Congress was all about violence in video games. With Mortal Kombat hitting the arcades in October 1992 and Night Trap hitting the Sega CD in the same month, violent video games were all over the news. From late 1992 into 1993, congressional hearings were held on the state of video games and violence in video games, giving politicians a nice little podium to stand on to decry an indefensible position. "Won't somebody think of the children?" and all that. You might remember one Joe Lieberman at the head of these congressional hearings; it was his pet project for a good, long while.
Out from these hearings came the ultimatum -- create a self-regulatory body that works within a year or risk government intervention in your burgeoning, hugely successful industry. Thus, after a few failed attempts, the ESRB was born in 1994. The original ratings were sparse and more akin to movie ratings, but as time went on, the ratings evolved into the current system.
The ratings process for the ESRB is a very interesting one, as it probably isn't exactly what you would imagine would happen. First, a developer or publisher sends captured footage of the game's most "obscene" or graphic material to the ESRB, along with a rating fee based on the game's total development cost. The fee is much lower for games under $250,000 in development cost, presumably to keep the ratings burden low for indie developers. Production costs over $250,000 incur a $4,000 fee, while games under $250,000 fork over $800.
Three raters then review the footage and attempt to come to a rating consensus. After that consensus is reached, the publisher/developer is notified of the rating via a certificate. It may then change the game in certain ways and resubmit the game for re-rating to get a less severe classification. There is also an appeals process.
When the game is finally complete, a finished copy is sent to the ESRB for packaging review and random game testing to make sure the entire process has been accurate. There are potential fines and penalties if the publisher or developer has been less than truthful or accurate during the ratings process.
Self-regulation requires a system that can enforce its own rules and parties that are incentivized to follow the rules. In the case of video game ratings, the system works something like this: Major retailers like Walmart, Target, GameStop, and others agree to only sell games rated by the ESRB and to enforce their ratings.
Of course, enforcement isn't always perfect. That's actually one of the reasons that Schwarzenegger v. EMA is even at the Supreme Court level -- kids can still potentially purchase games rated above their age with little consequence to retailers.
Also, many people have expressed outrage over the fact that not all of the games rated by the ESRB are put through the ringer, so to speak, as they are rated. It is up to the developer/publisher to disclose the worst stuff and for the ESRB to make a judgment call based on those disclosures. Remember that whole Grand Theft Auto: San Andreas hot coffee business -- secret code not even really accessible to the public without some serious tinkering embroiled that game in immeasurable scandal.
Activision Blizzard's stance on self-regulation
Activision Blizzard likes the ESRB and self-regulation, if only for the fact that it's a cheaper and less risky alternative to any type of government regulation. The company even filed an amicus brief supporting the games industry in Schwarzenegger v. EMA. If you're a company, chances are the more government regulation you have to deal with, the more money you have to spend dealing with those regulations. Look at corporations after Enron and Sarbanes-Oxley. Suffice to say, when you make your own rules, you get to make your own rules.
Self-regulation is also more predictable. The last thing a game company wants is to start making a game, invest tons of money into the development of the game, and then be denied rating on an unknown or unclear standard. The ESRB is tied to the video game industry and therefore can be a better arbiter of the trends in the industry. We don't know how long it would take government to be able to create those same standards.
So there's my little piece on self-regulation. There's more to talk about, sure, and I would like to discuss it more in the future. The ESRB and the self-regulating nature of the video game industry in America is one of the hallmarks of its new age, from the beginnings of the ESRB in 1994 to our first Supreme Court case in 2009.
This column is for entertainment only; if you need legal advice, contact a lawyer. For comments or general questions about law or for The Lawbringer, contact Mat at mat@wow.com.Filed under: The Lawbringer
Reader Comments (Page 1 of 1)
Tribunal Nov 19th 2010 5:11PM
Good article, but it left out the 'retailer' angle a bit.
Self regulation can be a mess but on the whole it works alright. However, saying the participation is 'voluntary' is a bit of a stretch. When's the last time you saw a "NR" movie hit mainstream theaters? Or a video game without an ESRB box? Sure it's voluntary in theory, but in practice it's become so ingrained that it's suicide to go without.
Which is both good and bad. You need the system to be powerful and ingrained to work, or everyone would ignore it. But when your only real option to show your dissatisfaction with the system is pretty much to go without a rating... that's where it starts to hurt. A -few- big name movies have managed to make it without a rating, but they are few and far between vs the movies who 'caved' to avoid shooting themselves in the foot. There is an appeals process but it's often a joke without openness in other industries (mandatory binding arbitration comes to mind before some recent regulations) and I wouldn't be surprised in the slightest to find out that's the case here as well.
Jeremy Nov 19th 2010 5:24PM
It's voluntary in that it's not law: movie theaters can show a movie without a rating and it would be perfectly legal. Same with game ratings. What the other ramifications of that would be in terms of how the rest of the industry and the MPAA/ESRB would react is a different matter, but it's not going to bring the government down on them.
Tribunal Nov 19th 2010 5:45PM
@Jeremy
Correct, except the whole system is there so the government isn't there so the "government isn't going to come down on you" is a bit misapplied.... the whole idea of the system was to make that -never- a consequence, so the consequence should really be framed in other terms.
And in terms of success, money, etc, it really has become suicide to go without. On the theater's side as well. Unless you market yourself as an "arthouse" or it's one of those few 'big names' that did so NR, your target patrons like to see ratings. Most mainstream theaters won't show NR films. Even independent movies that make it big probably weren't rated when they made the film festival circuit and then -got rated- in order to have a widespread distribution.
I'm not saying that's wrong. Again, the system as a whole works in the majority of cases, and you need the regulations to have some bite to back up their bark or they're a joke. BUT say you have a problem with your film's rating? In the end, no matter what, you will bend to their will if you want widespread distribution (distribution that's often specified in your contract with the studio). That's where it starts to toe-to-cross the line in a few cases, and a specific area I think could be improved upon.
---
Is the ESRB the same way? In some ways probably yes, and in some ways probably no. The same level of investigation hasn't befallen them, so we don't really know. But it's worth consideration if you're involved in or support the industry, and the MPAA is a sign of things to come as video games continue to grow and grow in entertainment market share, for better or for worse.
Malozing Nov 20th 2010 7:56AM
Yeah, and the retailers would be paying the fine if they sell violent video games to kids.
Samuel Nov 19th 2010 5:14PM
It would be great if you could write about PEGI (self-regulation system in Europe) too. I would be nice to see the differences between the two and their impact on game industry (and WoW of course)
Suss Nov 19th 2010 6:33PM
Does anyone think these ratings actually effect any behavioral changes?
Claire Nov 19th 2010 7:00PM
"kids can still potentially purchase games rated above their age with little consequence to retailers"
How is this different from movies rated above their age? Are the retailers just worse at enforcing the ratings on games than they are at enforcing the ratings on movies? Or do Target and Wal-Mart happily sell rated-R movies to kids? And if so, where's the hue and cry about that?
Koleckai Nov 19th 2010 8:46PM
Wal-mart and Target require ID for R rated movies. I believe they do for M rated games as well but even though I am 40, I have never bought an M rated game at these locations. They don't carry AO rated games. Most Cinema companies require an ID to see an R movie without an adult guardian present.
The big issue with self-regulation is there is no incentive for smaller retailers like Gamestop to check the ID of purchasers of these games. You rarely see independent theaters these days, and if you do they aren't showing first run films. I am pretty sure that they don't verify age at these places but since they are not part of the "Box Office" race, they don't count and aren't monitored.
It is less likely that a parent will catch little Johnny sneaking into an R rated movie than catch them playing an M or AO video game. Therefore there are less complaints to politicians about the self-regulation or lack thereof in the movie industry.
Hollow Leviathan Nov 19th 2010 9:27PM
Where IS the hue and cry about movies? I saw R rated movies without showing ID when I was 16-18. You'd think that's the same thing as M rated games going to kids.
SINisterWyvern Nov 20th 2010 9:02AM
I'm an electronics associate for electronics. I card every one that looks younger than me for M games and R movies.
That being said, no kids buy games for themselves that are rated M. It's the parents that decide what they can get and that's how it should be.
Phaelan Nov 19th 2010 7:11PM
There is are HUGE differences between what the Video Game industry does and what the Movie industry does for their ratings. For one thing the VG industry is very consistent in what is rated and is pretty fair across the board as well as transparency, their website http://www.esrb.org/ratings/faq.jsp even goes into what criteria they use, I'm guessing that you could find out who actually does the ratings.
the MPAA? THAT is a joke. Wildly inconsistent between movies on the Ratings that different movies get. Movie producers will go to great lengths to make seens that they can purposely cut to get the R or PG-13 rating they want. (Team America comes to mind as an example). No transparency at all and no one knows who is on the board.
there is another rating system for movies that is in it infancy, hopefully studios switch to that one ( don't remember what it's called)
Bronwyn Nov 19th 2010 11:03PM
I agree with everything you say here, which is why I think it's ridiculous that anyone wants to put governmental regulations on video games, when the kind of shenaningans the MPAA gets up to are, in my opinion, far worse.
Sehvekah Nov 20th 2010 8:49AM
Anyone who's curious about how the MPAA actually works should check out "This Film Is Not Yet Rated", a documentary covering just how screwed up their whole ratings system is. Government regulation isn't a good thing to have in matters of art, but that doesn't mean self-regulations can't have a dark side.
Kaz Nov 19th 2010 9:03PM
Good article, but I think it was a little too pro-self regulation. While there are instance where self regulation is best (i.e. Video Games) there are many other instances where self regulation leads to massive abuse (i.e. Enron, or any financial company within the last decade).
I think the ESRB works best because it dose its best to inform about the overall content of a game and lets parents make the decision about whether to buy, rent, or let it in the house. Sanctions don't even come from the ESRB except in the case of deception, but that's rare.
The only problem I have with it is that none of the major console developers will allow an AO rated game on their systems and many stores will refuse to carry AO games. I understand why since AO is effectively reserved for pornographic content (and ostensibly very violent content, but lets face it no one really gives a crap about violence). I personally don't like the fact that there is a blacklist rating, I feel that constrains artists too much. Sexuality is a natural part of the human condition and while I don't approve of games trying to cash in on cheep erotic thrills, I do think it can be used in an artistically valid way that enhances the overall experience and relevance of the medium.
On the flip side the existence of such a pariahic rating may have prevented studios from attempting to cash in on cheep sexual imagery. So, in that way it may have saved Video Games from being degraded to the point of trying to one-up each other on shock value.
Boy, don't you just hate this large empirical questions....?
Srslyyeswai Nov 20th 2010 6:08AM
Very good article! I am not in the least bit educated about the ratings boards, MPAA or ESRB, but from what I read in the article, I thought that sanctions are the implication to not participating or not following the rules when it comes to the ESRB. For example, I want to release a game on PC and choose to bypass the ESRB.. this means I don't get distribution at major retailers (or any, it seems)... just like an unrated movie would have a hard time getting distribution at movie theaters. And just sayin, but I would buy an AO game just out of curiousity... unless it was cheaply done.
staffan.johansson Nov 20th 2010 1:21AM
IMO, "Clean up your act or we'll do it for you" is little different from "It's time we cleaned up your act" when the one saying it is the government. I don't mind a voluntary ratings system as long as it's truly voluntary - meaning there's no punishment for ignoring it and no government waiting in the wings to pick up the slack.