Hot Coffee, Lawsuits And You: IEMA's Hal Halpin On The Retail Struggle

The Interactive Entertainment Merchants Association (IEMA), for those not in the know, is the key North American non-profit retail trade organization dedicated to serving the needs of major video game and interactive software retailers. Its members include Wal-Mart, Target, Toys R Us, and EB Games. Prior to forming the IEMA in 1997, Hal Halpin founded and published the industry news outlet, GameDaily, as well as another business publication, IE Magazine.

The IEMA has had a particularly high profile recently in making public statements over the wealth of U.S. State-specific laws that attempt to restrict violent video games in various legislative ways. In this exclusive interview, Gamasutra spoke to Halpin about the continuing problems of these lawsuits, the effect of the Grand Theft Auto 'Hot Coffee' mod on the retail environment, the rise of digital distribution, and more.

Problem For Games?

"As of this minute, [the game retail industry's] three major opponents are the State of California, the State of Illinois and the State of Michigan," said Halpin. "More specifically, they are those states' respective attorney generals and their governors, who each signed into law bills which their legislatures knew full-well would be in violation of the First Amendment. This political opportunism and grandstanding for the perception of quick votes and a move to the 'moral high ground' has been costly for the industry and for the general public, with the only true beneficiaries being the misguided politicians who sponsored and supported those bills. It's a travesty of justice and a waste of valuable taxpayer resources."

Jack Thompson and the Hot Coffee Debate

"Attorney Jack Thompson is someone whom I believe has his heart in the right place actually," Halpin said. "I think it's clear to all involved that he earnestly believes his perspective shall be the one to prevail and he is willing to put all of himself - personally and professionally - into that fight...a position which I don't see countered on the 'pro' side of the debate. That said, we take issue with his opinion that our members have not done enough to stem the sale of Mature-rated games to minors, and in that regard, we appear to be adversarial."

Along the same lines, Halpin believes that the "Hot Coffee" fiasco, which involved the public discovery of hidden, sexually explicit content in Grand Theft Auto: San Andreas, to be a milestone not only for the gaming industry, but for the entertainment industry as a whole. "All at once it exposed our vulnerabilities, galvanized our opinions and beliefs, shed light upon weaknesses and empowered those on the 'con' side of the debate with renewed optimism," he said. "The ripple effects of that matter will be long felt and have already begun shaping the future of our business."

And as for the ESRB's call for developers to reveal all content contained in a game's disc, accessible or not? "The 'hidden content' issue is really a non-starter, insomuch as the ESRB requires publishers to disclose all content in the game, playable or non-playable, and they always have. That important fact is something that we all now appreciate and thoroughly understand."

"The IEMA has been supportive of the ESRB and self-regulatory efforts since before our formal incorporation, and it's my opinion that it is quite simply the most comprehensive ratings system that I have seen to date. The IEMA members and ESRB have had our share of disagreements on a variety of matters, but generally I think we work together quite effectively. We have been fairly vocal about increased retail involvement in understanding the idiosyncrasies of the ratings process and its management, and we have been making slow but steady progress toward that end."

The Elusive AO Rating

Selling interactive software with an "Adult-Only" rating is nearly impossible in the United States, at least at the retail level. "Our members choose not to stock certain categories of product simply because it doesn't serve their customer's wants and needs. So in much the same way that we generally do not stock X-rated movies, we don't offer AO-rated games," he said. "My personal opinion is that there should absolutely be more AO-rated product available in the market. While I'm not a First Amendment absolutist, I believe in expression, and I also would hope that like music and movies adults interested in purely adult content should be able to purchase or rent similar content on differing media."

Halpin continued: "That said, I find it highly unlikely that our members will change their respective policies regarding AO games going forward simply because it's just not what their customers want. There may well be a time where the market has matured enough to support another extension of the channel which caters to adult content... there may even be some now that I'm not aware of, but I'm not sure that we're there just yet."

Digital Distribution?

With the recent surge of digital distribution services, such as GameTap and Electronic Arts' own EA Downloader service, does Halpin feel that digital distribution could be a major opponent for his clientele?

Halpin laughs as he responds. "I've been sitting on panels at industry conferences for 12 years having a substantially-similar question raised about the impending doom of traditional retail due to developer and publisher-driven digital distribution models. Heck, I've even sat next to would-be competitors who told me point blank how they were going to be the next Wal-Mart of video games and my members would be rendered obsolete. Very few of those pundits are still around these days, and I think it's primarily due to overconfidence in one's product/technology versus the human equation. Look, Wal-Mart is going to be the next Wal-Mart, not XYZ Technologies."

Laughs aside, Halpin does take the subject seriously. "I have been watching the evolution of some very compelling solutions recently which I think could work with our current channel architecture and frankly, giving consumers another option for how they could buy products online makes a lot of sense: buy the product as packaged goods or buy it as a digital download. Absolutely."

One major argument for digital distribution is the continued complaints heard by publishers about "shelf space," the struggle to physically fit one's product on a store shelf amongst all the others. "It's important to note something as it relates to developer's want and need to get access to more shelf space: we already created it," he said. "The IEMA led the way to reducing the size of PC game boxes in order to fit 33% more product on the same store shelves. Additionally, we added more square feet of shelf space and created selling opportunities for six viable and sustainable platforms: Xbox, PS2, GC, PC, GBA, and now PSP/UMD. If you're not able to get your products on store shelves it's now very clearly a matter between developer and publisher."

Halpin suggests: "The excuse of years past of blaming the merchants for being stingy with square footage, or favoritism with genres is obsolete. If you go into any one of our member's stores you'll find a wider and deeper assortment now than you have ever seen, and it's about to get bigger - during the transition phase of the cycle. So yes, digital distribution has grown from a fraction of a percentage to twice that fraction of the same percentage year-on-year, and I'm sure it will be a trend that continues, but developers should really focus on the here and now."

Branding for Charity

"One of the seldom covered aspects of what we do is our self-indulgent passion for charitable giving," Halpin said. "In shrinking the size of the PC games box we unknowingly created a need for standardizing the platform identifier as well. Unlike the console platforms, 'PC' as a category isn't owned or monitored by a corporation, so we were finding thirty-some-odd differing types of platform icons. Working with publishers, we created and monitor the now-standardized PC identification marks (PC-CD, PC-DVD, etc.), the small rectangular black and white logos. By creating that trademark and giving it to the industry, by way of a royalty-free licensing agreement with publishers, we receive in three finished copies of each and every game which uses our mark. Which was great for the first few weeks after implementation, but quickly overwhelmed our offices."

The IEMA head concludes by explaining: "We decided then that we'd tie up with children's charities and donate the games to hospitals, shelters, homes and schools where they could truly affect change. We re-started the game industry's oldest charity, Games for Good, and use it as a conduit for people and companies in our industry to give to those in need - be it cash, games or their time. And I have to say it is the most rewarding thing that we are privileged to do. The stories that we receive in about how those games - games that your readers created - are being used to give comfort, inspiration, education or just a distraction are heartwarming and something we can all be proud of." Amen to that.

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