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00:00Hi. Fun and games and a whole lot more we're talking about thevideo gaming industry this morning on Black in Focus. I'm Karen Toulon here at Bloomberg in New York. I'm delighted to be joined by Stan Pierre- Louis. He is the president and CEO of the ESA. And if you're not really cool like Stan I have to tell you what that is that that's the Entertainment Software Association. Stan welcome toyou. Thank you. And thank you for hosting this conversation. Well SamI'm really excited to have you join us because ESD is the voice and advocate for the more than forty three billion dollar.That's 43 billion with a B U.S. video game industry. And you just wrapped up your annual E3 conference which was heldvirtually this year. There is so much to talk about. The 43 billion dollars is thedirect business. But according to one report when you consider all the other contributing factors that the industry can getcontributes around 90 billion dollars to the U.S. economy and almost half a million jobs. That's really quite a lot. Your inyour impact is really quite large. So first let's start with a trade as we want to talk about one portion of A3 which isspecific specifically around around diversity and bringing more diverse publishers players employees into the mix. But bigpicture what. What. How did E3 shape out this year. Sure. And again thank you for this conversation. I think it's reallyimportant. So USA the Entertainment Software Association represents the US videogame industry and that's everything fromrepresenting the industry before state and federal legislatures to working with industry on advancing its overall goals.We also own and operate E3 as you mentioned the premiere videogame showcase in the world. That show has been around 26years now. Traditionally it has been a physical show where people showed up and tried out games and retailers came to checkout games. It was mainly a B2B affair with some consumer interaction but with 20 20 having the pandemic and just havingthe inability to have a show at all it gave us the opportunity to rethink what E3 could be and how we could present it to theworld how we could present our industry to the world. One big decision we had to make was whether or not we thought by summerof 2021 we could have a physical show. And one of the things I learned in this process is trying to puton a show of that magnitude just requires the movement of people in things way out in advance. You've got to think about whatyour booth looks like and who needs to be there and what games are showing and what's going to be ready. And if you think backto where we were this past fall no vaccines were yet approved. International travel was still banned.Trying to hedge around where we might be in the summer seemed like a tall order. But trying to plan a digital show seemed likeit was very attainable. And with support of many media companies and video game companies who wanted to be engaged we were ableto harness that energy and think about how to showcase what people wanted to see. First and foremost they want to see gamesthey want to see the announcements they want to hear about products and services that they might be able to engage with.But we also wanted to take the opportunity to have conversations around the things we're talking about now whether it's coveredrelated and its impact on us. But also this massive conversation we're having on diversityequity and inclusion. What does it mean to be an inclusive industry and what does itmean. You want people to understand that we are not only open for business but we want more people creating games so that morepeople are playing the games that they see themselves in. So we structured four days of programming that included showcases andpress conferences but also had programs ranging from developers talking about how they put together games.Ask me anything sessions with famous studio heads and the like about what it's like running their studios or putting out agame. But also let's have a conversation about whereas the games industry on women and diversity on having African-Americanrepresentation like next representation world representation. And so a lot of the programming involved looking at differentcultural issues and different ethnic issues and looking at DTI but trying to do so in a way that felt like the right spirit fora marketing event. And I think it was well received in many quarters and we're taking that learning to figure out how elsecan we enhance the value of these three. World not only in terms of showcasing the best games and products and services coming upbut also reflecting who we are and who we aspire to be as an industry. So you know I do want to touch on intellectualproperty and UN security which are you know we're kind of bubbling up at the same time that you're having your conference.That was no hacking of of systems and security were an issue. So I do want to touch on that at the end. Since you brought it upfirst. I mean the gaming industry is facing two very real realities. One is the reality of success. Right. You have towonder around two hundred and fourteen million players in the US. Seventy five percent of U.S. households have at least onevideo game player. Right. Last year alone around 100 billion hours of content for watched on YouTube. And so it's everywhere.But the other reality is like much of the tech space diversitylow single digits in black and blacks and gaming. We've talked about this before for a story I wrote for Bloomberg is aspiringto get to 5 percent on black representation and employment and an end in leadership positions in five years. All right. So verylow single digits. You gave central stage to take two interactive to make a GrandTheft Auto charge. You had to have this panel discussion on diversity and and inclusion.I watched it after it. It was remarkableat least to me as as as a user. What why. Why do that why. DAX center stage.Well as an industry I know that we have been looking at this issue for some time but I think as you saw over the past yearmany industries including the video game industry really started to reexamining what their commitments were and what theirprograms were in this space. Know looking broadly for a moment the new president of the United States had four key goals. Helaid out in his opening remarks one was defeating coded getting back up our economythe environment and racial equity. And so you knew that that was going to be a focus on a policy level. And you saw more and morecompanies speaking out on some of these issues who had never done so before. So I think our industry had been working on thisfor some time. But the events of last year really made it more of a fever pitch to focus on it. And so you've seen differentthings develop. For example you mentioned take two and we'll talk about E3 in a moment. They recently announced the fundingof a major endowment at the University of Southern California for scholarships that will help black and indigenous studentsbecome game developers. You see an announcement by Microsoft not only trying to double the number of its senior black leadershipby 2025 150 million dollar investment in doing so but working with historically about colleges universities to increase theirown pipelines and that of the tech industry. And we've recently announced our relationship with a Black Girls Code a group basedin the Oakland area. But that has no chapters in 15 different cities around the country. And we're looking to partner withthem in creating mentor opportunities learning opportunities and bringing in speakers to talk about opportunities in thevideogame space so that young girls and black women of color who are coming up in the stem and seeing fields see that as anopportunity and as a real goal. I think E3 being the largest stage we have for the video game industry because it's the onetime when everyone on the globe who cares about games is focused on the games world.It created a real nice opportunity to showcase a conversation that we're all having and we need to advance. And I reallycredit take two and saying that this is important enough a topic that we want to take center stage promote this dialogue bring inother partners who are expert in this field and and really let it rip and start that conversation. And some of the feedback hasbeen really positive and people saying wow I never thought we would have this global conversation. I'm looking forward to itcontinuing. And I think that just speaks to where we are aspiring to be as an industry.And so you mentioned so many things. You mentioned you know programs for four for four young girls. You mentioned programsat the university level. You mentioned programs within with employers and then programs for rising managers and leaders.Is that what it takes to move the needle. Does it take all of the above. We have to do everything.Yes I think all the above should be the answer to any question anyone has in this space because it really takes these effortsat every level and each company and each organization will have its own flavour of how they do it because each culture isslightly different. What's true is two things. One is that change is started and sustained at the top. So if the top of thehouse says this is a priority and we're making a priority and I want to incentivize it that's where change happens. The other isthat you have to have sustainable programs and that means advancing and developing the talent you have but also trying toincrease the number of people who are coming and increasing that pipeline. So it takes a real commitment at the top of anorganization that says this is important and then it takes sustainable programs that people buy into and really foster inorder for it to become reality. You said you'd used a really important word and that's culturein the gaming industry. Kind of the fallback position. If you said you know think about a video game or you're thinking abouta a young white male. He's a teenager or he's an arrested development. Young white male who quite hasn't moved out of hisparents basement or he owns a really large home. But for whatever reason he still just lives in the basement. He eatslittle pizzas any plays video games. And that seems to be you know who we kind of think about. Right.And then we think about all the bad actors right. We think about all the trolls we think about that kind of culture as well.And that culture and infiltrated some of the sessions that you hosted because you held a very open platform which is reallykind of fascinating in and of itself. You put everything out there and people could join and listen and participate. And soyou couldn't necessarily play gatekeeper or we could come back to this. The point though is is that culture changing. Becauseyou know when I talk to founders black founders women founders other founders they say their problem when they go to raisecapital that if they don't look like one of the guys it's tough to kind of break in. There's a pattern right. There's a patternan understanding of what a gamer looks like. There's a pattern of of understanding what the industry wants. And that's kind ofwhere the money kind of flows to. Is that pattern changing. Is that culture shifting.Well first and foremost I think one of the things that we want people to understand isthat the video game player universe is much wider than people really believe it to be. When you talk about Twitter and 14million Americans playing and almost 1 in 3 around the world playingthat means everyone is playing. And when we put out studies on our demographics every demographic group is playing. And one ofthe interesting stats to me is something like 10 percent or 15 percent of the people over 65have been playing for less than 10 years which means they started playing in their 50s. I'm not the typical thing peopleare thinking about. And also for girls who play video games are three times aslikely to get STEM degrees in college than those who didn't because they're interested in and understand what's behind thescene. And so you're seeing a growth in every demographic of who's playing. And I think that is what's starting to infiltrategame making when you see like the insecure game and the like based on the show and all that is done to create this empire ofmore and more people are realizing that everyone is a gamer because everyone is connected. So when you talk about some ofthe activities online one of the things we want to do with you three is make it as expansive as possible. So we had our ownplatforms but we also put it onto all the other major platforms. And there was there's a lot that always happens on theseplatforms that visited E3 as well. What was what was heartening to see was the counter action of people saying well wait aminute we're having a conversation which is relevant to our industry and where we are as a society. Why are we castigatingit in a negative light. Let's make sure we're uplifting and understanding. This is a moment during our hour premiere eventfor the industry. But since you're there we're respecting and honoring the importance of these conversations. And there wasmore than one. I think that the take to conversation with center stage which made it really amazing. But there were otherconversations around women who provide voice acting and what their experience has been over the years and how things havechanged. There was a great discussion about Southeast Asian developersand a woman who was Filipino and what it meant to create a cooking game to not only talk about her passion for cooking butto bring her culture into it. So I think there were things that were both obvious but also subtle in the conversations that wewere able to create. And I think the more we give voice to the positive energy around these topics the more we push down theconversations of the few but vocal minority who are trying to create negative waves. And this isn't just about video gaming atthe end of the day. Right. So your your your industry really touches a lot. It really is the kind of at the focalpoint of of innovation. Right. And so when you think about health when you think about job training think of education.Videogames have have a place. And in all of those things. Right. You talked about girls in STEM. I loved one of your one of yourpanelists who said thatnine out of 10 kids play video games. And it's not nine out of 10 boys. It's not nine out of 10 races. It's not nine out of 10gender orientations. It's just nine out of 10 kids play video games. And that kind of like really it was such a simplestatement but it really kind of blew my mind actually a point. It's touching everyone.Can you talk a little bit about why you where you see your industry going with these grown ups with these seniors peoplewho I suppose I shouldn't say seniors but people who are fifty five plus who were picking up video games for the first time andhow that might relate not just to their enjoyment of games but it might relate to how they interact with their doctors or howthey schedule medicine taking. Oh that's exactly right. And in fact the AARP has done studies every few years around the growthof the growth of silver gamers. They call them. And it's astronomical when you see the numbers of people over 50 who arepicking up video games for the first time. I think it's having a mass effect in two ways. One is as you talk about services. Soyou know medicine for example more and more physical therapy is using the value of video games to help people do their exercisesbecause it's more fun than just simply lifting your weight and twisting it three times. But landing the plane and using yourrisk in the same way has tremendous value. So you think you see the delivery of services or video games increasing. I think theother thing is that people are connecting more through video games more and more. What's driving that growth is that I canplay with other people who are passionate about this topic or this game or this genre. And people are connecting with otherpeople and playing and meeting new people connecting with family. Suddenly it was that of that kind of bubble out ofpocket. It started before covered. I think people who weren't gamersrealized and I'm going to paraphrase someone else that there is a relationship or a community on the other side of the screen.You're not the only person playing. But there are others who are passionate about it too. But you've had grandparents playingwith their grandkids or connecting through games because that was the medium of choice for some kids. And that was a great wayfor grandparents to to enjoy getting together. So you see a lot of intergenerational play. So in terms of services but also interms of connection games have created this opportunity and code that accelerated the adoption for many people of this medium.Since you mentioned this as we mentioned I guess I brought it up health care I do want to circle back in just a couple ofminutes. We have left to talk about something that you did talk about during during E3 which is security.How much how important is that to your community. How important is it to the companies that you deal with the notion that JAT isbeing kept safe that that private information is being kept safe. And and I know it's something that's important to theBiden restriction as well. Any any developments out of that any initiatives that you'relooking forward to. Well we certainly take security as a top priority for a few reasons both as an industry but also as GSAthe operator to be three. One is because we want to ensure that everyone has a safeand trusted experience on our networks and protecting people's ability to connect with one another in safe ways. And I knowthat our companies treated the same way. I think second war more as we are a data driven society. You want to ensure that you aregrowing in the right ways and protecting people's data. It helps in your business relationships. It helps in your consumerrelationships. I think digital hygiene has become much more important to people. We've seen news about what's happening bothin terms of companies government agencies and in particular with foreign actors who are after the data for either corporateespionage reasons or what have you. So it's something that we as an organization but also is in this we take very seriouslybecause more and more people are accessing games through online means. And so you want to ensure that those experiences can betrusted ones. And you've seen companies with many many opportunities to highlight what they do in terms of trust andsafety on the data front but also in terms of online experiences for users. And I would point out that in December 3 consolemakers Nintendo Ex Fox and Sony came up with some online principles for safety just talking about the fact that we needto work with our partners in law enforcement we need to work with the industry and work withwith with the consumer base on how to make the online experience just moretrustworthy but also safe for everyone. And I just want to end on on this on this note Gordon Bellamya longtime name in the in the gaming industry. Now professor at USA talked about belonging and not just the name for need fordiversity and equity and inclusion but also feeling like you belong. And he said that you want to be the backer not just offrosting which I thought was kind of a really lovely analogy. And he said that what he felt was important. That was that youwant to become part of the business model. You want to be be that that diversity should. A business challenge and that thereshould be no cap to it is do you think that's where where things need to be headed thatit really needs to be a business challenge like the way forward isto look at this as as an opportunity. I wholeheartedly agree with that statement but also that whatwe're seeing now one year out from the focus on DUI for so many companies and organizations is seeing how that's coming through.Seeing what those commitments are and how sustainable they are. And I think it's key to maintain the importance of it in theconversations to incentivize it and to make it a business goal because ultimately if you want to expand your markets to newplayers into new territories you need voices that represent those those demographics because that's who's going to want toplay those games. There are games are universal. Absolutely. There are also games that really reach an audience in a specialway. And having people in the room we're making the games who speak the different voices and different communities iscritically important to making sure it will be adopted and accepted and really reflective of a broader society.Stan thank you so much for joining us Stan. Here the way of the E s a thank you for your time. We really appreciate it. Thankyou. Not only for this interview by the way I just really appreciate the programming that you're bringing to Bloomberg andthe conversations you're having and the importance you're placing all these conversations. So I just wanted to thank youfor ensuring that different voices are heard and that this conversation happens. Well that's very very nice. Well thank youStan. Well you're going to want to pay attention because next week right here for the Fourth of July which can be acontentious holiday for some. But one thing you cannot argue about is food. We're going to be talking with Stefan's StephenSatterfield. He is the host of Netflix's docu series High on the Hog on How African-American Cuisine Transformed America. We'llbe celebrating black American food traditions from oysters to your weekend barbecue if you're having one. So that's next weekon Black in Focus. But that's it for this week. I'm Karen Shula. For all of us here Bloomberg have a good weekend. Take care. Byebye.

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'Black in Focus': ESA President and CEO Stan Pierre-Louis

From increasing diversity to safeguarding personal data, the Entertainment Software Association is the voice and advocate of the more than $43 billion U.S. video gaming industry. “Black in Focus” host Karen Toulon spoke to Stanley Pierre-Louis, ESA president and CEO, about their 2021 virtual conference, and where he sees opportunities for growth. (Source: Bloomberg)

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