Video games’ $18bn impact on US economy

The video game industry has an impact on the US economy well beyond its sales of consoles and software, according to a new report for the Entertainment Software Association.

Doug Lowenstein, ESA president, said at the E3 trade show in Los Angeles that while sales of video games and hardware totalled $10.3bn in 2004, the industry generated another $7.7bn in economic impact.

The ESA commissioned two leading economists – Dr Robert Crandall of the Brookings Institution and Prof. J. Gregory Sidak of the Georgetown University Law Center – to study the stimulative effect of entertainment software on high-technology sectors.

As well as calculating a total impact of $18bn on the US economy in 2004, they forecast the industry would support 265,000 jobs by 2009, up from 144,000 in 2004. “Clearly, the entertainment software industry is not just about fun and games,” their report concludes. “It is a serious business that improves training, efficiency, and productivity in a variety of industries and has led to innovation in other high-technology industries.”

Mr Lowenstein gave the example of the development of more powerful microprocessors, with the PlayStation3’s Cell processor now being used by defence and medical companies.

The video game industry was also helping to create a workforce more skilled in maths and science, he added.

More students were taking video game courses, which required maths and science qualifications.

“The industry is drawing more and more people into these disciplines that are critical to the US’s economic future and to keeping us competitive.”

The report also says that about $73m in high-definition television sales can be directly attributed to sales of the Xbox 360 game console.