ESA: Games industry an economic powerhouse, outgrew US economy by 4 to 1

The ESA has released a study looking at the economic impact of the gaming …

As gaming enters the mainstream and video game consoles become as ubiquitous in entertainment centers as DVD players, the industry has become an important economic driver of the United States economy. The economic effects of the video game business economically haven't faced much serious study to date, but the Electronic Software Association took the task upon themselves with a new report. Titled Video Games in the 21st Century: Economic Contributions of the U.S. Entertainment Software Industry, it found that the US video game industry grew a whopping 17 percent from 2003 to 2006, far outpacing the 4 percent general growth of the US economy. Retail sales totaled $7.0 billion in 2005, and sales of games for both PCs and consoles grow from 74.1 million units in 1996 to over 250 million units last year.

"Computer and video game companies play an ever increasing role in our nation's growing economy," said Michael Gallagher, CEO of the ESA. "These companies and their colleagues across the nation are making entertainment software one of the fastest growing industries in the United States."

The gaming industry added a total of $3.8 billion dollars to the GDP of the US in 2006, while employing, either directly or indirectly, 80,000 people across 31 states. Which state enjoys the most benefit? California, where around 40 percent of the US video game industry is employed. The gaming companies provided $1.8 billion dollars in compensation to Californians in 2006 and the industry grew 12.3 percent in California alone, tripling the general rate of state economic growth.

The study also makes a case for the US government to start tracking growth in the gaming industry. "While the growth of the industry can be clearly seen in industry source data, most government statistical references in the United States do not report software game publishing as a separate US industry," the report explains. "In US statistics, software game publishing is typically included within the broader industry category of software publishing."

Lumping the video game industry into other forms of software publishing does little to make the case for the strength of the business. The report estimates that between 2002 and 2006, the employment rate in gaming rose 4.4 percent; in contrast, the employment rate for the software industry as a whole declined.

The primary theme in mainstream media coverage of games is that they destroy lives and create killers. This study, though funded by a pro-gaming trade group, at least suggests there's much more to the picture than that. Gaming brings significant economic benefits to the US in terms of sales and employment, and that impact will only grow as the industry matures.