Too Much Platform Competition?
How much platform competition is too much competition? For example, what is the optimal number of mobile operating systems or video game consoles that will spur competition and innovation in those respective sectors?
It is an interesting business question, but it also has some policy implications since some might propose laws or regulations to remedy a perceived lack of platform competition in various sectors. After all, many people would answer the above question by saying that there is never such a thing as too much competition. The more platforms the better. But there can be costs associated with too much competition. Let’s consider those two case studies mentioned above: mobile operating systems or video game consoles.
Mobile Operating Systems
As my colleague Berin Szoka has pointed out, we are witnessing the rapid proliferation of mobile operating systems, especially on the open source front. So, we’ve got Apple’s iPhone platform, Microsoft’s Windows Mobile, Symbian, Google’s Android, the LiMo platform, and OpenMoko.
One one hand, all this platform competition sounds great. But as Ben Worthen of the Wall Street Journal’s “Business Tech Blog” points out in a piece today:
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True Cost of Video Game Censorship (continued)
In my July essay on “Understanding The True Cost of Video Game Censorship Efforts,” I pointed out how outrageous it was that politicians continue to burn money on fruitless regulatory measures that are destined to be struck down as unconstitutional. I argued that the nearly $2 million in legal fees and expenses recovered by the video game industry after winning its legal cases against various governments could have been spent much better by public policy makers:
That $2 million in recovered legal fees could have been plowed into educational efforts to help explain to parents how to use the excellent voluntary ratings systems or console-based parental control tools that are at their disposal. Moreover, that $2 million in recovered industry legal fees does not account for the resources that state and local officials put into these regulatory efforts. So, we are talking about a much greater deadweight loss for society and taxpayers.
Well, that opportunity cost / deadweight loss grew even higher today when the state of California reimbursed the Entertainment Software Association (ESA) $282,794 for attorney’s fees after losing a recent legal battle in the case Video Software Dealers Association v. Schwarzenegger. The ESA sent out a press release about the case today that dramatically points out the opportunity cost of such regulation:
The ESA noted that this payment comes at an especially troubling time for the state, calling to mind other pressing budgetary and legislative priorities and issues, including:
* California is currently facing a $15-billion budget gap
* More than 10,000 California state employees were laid off last week in light of the budget crisis
* Governor Schwarzenegger is seeking to cut wages for nearly 200,000 state employees
* The state already cut 10 percent to its Medicaid reimbursement rate and deferred payments to vendors“Caregivers are not well-served by court battles and legal fees. Rather, they would have been far better off if state officials worked together with our industry to raise awareness about video game ratings and the parental controls available on all new game consoles — both of which help ensure that the games children play are parent-approved.”
Indeed. And yet, the video game censorship bandwagon rolls on. Will it never end?
“Scientific” Media Ratings & Labels: What Exactly Does That Mean?
A few days ago I posted an open letter to New York Gov. David Patterson about a measure that recently passed through the New York legislature and was awaiting his signature. The bill proposes a new regulatory regime for video games that would include greater state-based oversight of video game labels and console controls as well as an advisory board to monitor the industry. Unfortunately—but quite unsurprisingly—Gov. Patterson signed the bill last night. And so I am certain that another legal battle will ensue regarding the constitutionality of the measure, and it will likely be struck down like every other measure on this front because it violates the First Amendment. Regardless, let’s talk a little more about what animates this specific legislative effort, because I think it is very important and foreshadows the heated debate to come over video games and all media in coming years.
The New York measure is notable in that, unlike most of the other state or local measures that had been stuck down in recent years that proposed penalties for the sale of games to youngsters which were labeled by the ESRB to be intended for an older audience, it simply proposed more “oversight” of the ratings process and parental control technologies by the state. Specifically, it mandated that all games be rated and that all consoles contain screening controls. The response to that proposal has generally been: “So what?” After all, all video games are rated already and all game consoles contain parental controls. The measure also mandated a 16-member oversight board to monitor the industry and this process. Again, that proposal was not regarded by many as a serious threat to the video games or free speech.
But I fear that many are missing the big picture here. The New York bill is actually far more important that many people suspect because of what it foreshadows: A day when politicians will claim that we can make rating systems more “scientific” by putting public health bureaucrats or university social scientists in charge of them. Indeed, last night on Bloomberg TV, this became the focus of a debate between me and Dr. Michael Rich, Director of the Center for Media and Child Health at the Harvard Medical School. After you watch the clip, I’ll have much more to say about this issue down below the fold.
2008 edition of “Essential Facts about Video Games” is out
Each year the Entertainment Software Association (ESA), which represents the video game and computer game industry, produces a great little report entitled “Essential Facts About the Computer and Video Game Industry.” The 2008 edition is out and it has some interesting stats:
* 65 percent of American households play computer and video games;
* 38 percent of American homes have a video game console;
* The average game player is 35 years old;
* One out of four gamers are over age 50;
* Women age 18 or older represent a significantly greater portion of the game-playing population (33 percent) than boys age 17 or younger (18 percent); and,
* 41 percent of Americans expect to purchase one or more games this year.
Those findings make it clear that gaming really has gone mainstream. As I noted in an essay earlier this week, “gaming is now fully integrated into the fabric of my life and the lives of my children. It has become one of the most enjoyable media experiences for my generation and the generation of kids that we are raising.”
Some other important stats that have relevance for debates about public policy:
* 94 percent of parents are present when games are purchased or rented;
* 88 percent of parents report always or sometimes monitoring the games their children play; and,
* 63 percent of parents believe games are a positive part of their children’s lives.
Those are impressive numbers, and it makes it clear, as I have argued before, that parents are parenting! (And that reflects what is going on for television as well).
Dear Gov. Patterson… Regarding that Video Game Bill You Are About to Sign
To: Hon. David Patterson, Governor, State of New York
From: Adam Thierer, life-long gamer and Senior Fellow at the Progress & Freedom Foundation
Date: July 17, 2008
Re: That video game bill (A. 11717/ S. 6401) you have been asked to sign
_______________________________
Dear Gov. Patterson:
I write today to ask a few questions about a measure that is currently sitting on your desk awaiting your signature. The measure (A. 11717/ S. 6401), which recently passed through the New York legislature, proposes a new regulatory regime for video games. It would include greater state-based oversight of video game labels and console controls as well as an advisory board to monitor the industry.
As a life-long gamer—and now the parent of two young gamers—this is a subject I care deeply about. I also come at this topic from an academic perspective as someone who analyzes the intersection of child safety concerns and free speech issues surrounding various types of media and communications technologies. I am the author of a frequently-updated book, Parental Controls & Online Child Safety: A Survey of Tools & Methods, which provides a comprehensive look at the many tools and methods on the market today that can help parents deal with concerns about objectionable media content.
But mostly I write you today from the perspective of someone who just enjoys games. Actually, let me clarify that: I am utterly infatuated with video games. Gaming has been a life-long passion of mine and something I have enjoyed with friends and family since I owned my very first PONG and Atari 2600 systems in the 1970s. Since then, I have owned virtually every major video game console sold in the United States. Even today, as I approach 40 years of age, I find myself sitting down many nights to enjoy games with my son and daughter on the Xbox 360 and Sony PS3 consoles that we have in our home.
Like millions of other Americans, gaming is now fully integrated into the fabric of my life and the lives of my children. It has become one of the most enjoyable media experiences for my generation and the generation of kids that we are raising. And, although I am certain that the New York legislature had the best of intentions in mind when passing this bill, I believe I speak for a great number of those other American gamers when I say that the measure on your desk is somewhat of an insult to our intelligence. Let me explain by raising a few questions about this bill, which I will argue is unnecessary, unworkable, and unconstitutional:
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Is Piracy Killing PC Gaming?
Sean Sands makes the argument that it is in a very powerfully worded editorial today over at The Escapist entitled “Sink the Pirates“:
PC developers are being forced to make more dramatic decisions in the face of overwhelming piracy, an issue that Cevat Yerli, CEO of Crysis developer Crytek, recently enumerated at one legitimate copy to every twenty pirated. [...] Yes, I think Cevat is inflating his 20 to 1 statistic, but he’s probably not nearly as far off as you or I might think. Looking at arguably one of the largest P2P torrent sharing sites on the web (no, I’m not going to link to it), and the number of Games torrents currently available, the evidence is absolutely damning. Despite PCs’ relative weakness in the marketplace, clearly in the backseat by orders of magnitude in relation to the next gen and handheld systems, it represents 50% of all torrents. Let me stress that - the number of illegal PC downloads are, at any given moment, equal to or greater than the illegal downloads for every other system combined. [...] Here’s the bottom line: Yes, piracy is destroying PC gaming. That is an immutable truth, evidenced by the exodus of PC developers defecting en masse to make games for consoles. End of story.
I’m not prepared to offer an opinion one way or the other, but I have noticed the slowdown in the PC gaming market recently and wondered about why many developers were moving over the more secure gaming consoles. That doesn’t necessarily prove that piracy was the primary factor, but it certainly could be part of the explanation.
What do you think?
Understanding The True Cost of Video Game Censorship Efforts
GamePolitics.com points out that Minnesota will reimburse the video game industry to the tune of $65,000 for their attorneys fees it incurred when challenging Minnesota’s 2006 “fine-the-buyer” law. The Minnesota law was unique in that it sought to impose fines on the buyers rather than the sellers of games rated either “M” for Mature or “AO” for Adults Only under the industry’s voluntary ratings system. Other state and local laws that have been struck down in recent years imposed penalties mostly on game retailers who sold games rated M or AO to minors. In a scathing opinion handed down back in August 2006, James M. Rosenbaum, Chief District Judge of the District Court of Minnesota, struck down the Minnesota law as unconstitutional.
But here’s what’s really important about the fact that the industry recovered legal fees in this case and others. As the Entertainment Software Association noted in its press release about the Minnesota settlement: “The ESA [has] prevailed over similar unconstitutional laws in nine other jurisdictions [and] now has been awarded close to $2 million in fees and expenses spent in defending gamers, developers and publishers’ First Amendment rights.”
As I have noted previously, these cases make it clear that there is a significant opportunity cost associated with censorship efforts. That $2 million in recovered legal fees could have been plowed into educational efforts to help explain to parents how to use the excellent voluntary ratings systems or console-based parental control tools that are at their disposal. Moreover, that $2 million in recovered industry legal fees does not account for the resources that state and local officials put into these regulatory efforts. So, we are talking about a much greater deadweight loss for society and taxpayers.
Continue reading this post »
“Parental Controls and Online Child Protection” - Version 3.0 release
PFF has just releasing an updated edition of my booklet on “Parental Controls and Online Child Protection: A Survey of Tools & Methods.” The new version, Version 3.0, includes two new appendixes and updates to each section to reflect new parental control tools and programs developed in the last nine months.
The updated report is timely as it comes on the heels of the recently-announced Internet Safety Technical Task Force, which is being chaired by the Berkman Center for Internet & Society at Harvard Law School. I am privileged to serve as a member of the Task Force, which is evaluating various online safety technologies and strategies and then reporting back to state attorneys general with our findings.
Those issues and much more are covered in the latest edition of my report. The report explores the market for parental control tools, rating schemes, education efforts, and initiatives aimed at promoting online child safety. I believe that the parental controls and content management tools cataloged in the report represent a better, less restrictive alternative to government regulation. As I conclude after evaluating that state of the market: “There has never been a time in our nation’s history when parents have had more tools and methods at their disposal to help them decide what constitutes acceptable media content in their homes and in the lives of their children.”
Version 3.0 of the special report, now over 200 pages, contains over fifty exhibits and numerous updates in all five sections of the book. Major updates have been made to the Internet, social networking, and mobile media sections, reflecting the growing importance of those sectors and issues. A greatly expanded section on video empowerment technologies has also been included. Finally, two appendices have also been added: a comprehensive legislative index cataloging over thirty bills introduced in Congress on these issues (complied with John Morris of Center for Democracy & Technology), and a glossary of 35 relevant terms and cases.
The report is available free-of-charge on the PFF website, as are the previous editions. And I am happy to provide hard copies to those who are interested.
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