by , 4:15 PM EDT, May 18th, 2005

Entertainment Software Association president Douglas Lowenstein laid down the facts in this year's E3 keynote speech. The "Six Easy Steps to World Domination" speech was delivered in an unconventional style that directly addressed industry insiders while explaining the state of the video game industry to the broader audience listening. Mr. Lowenstein presented the following major points to an early morning theater packed to capacity.

For his first point, he demonstrated that video games are now a $33 billion dollar per year industry with the Yankee group reporting an audience of 54 million players of varying intensities between ages 15 and 34 in the United States alone. Citing a need for the market to be broadened, he stated that the market needs to focus on creating games with both mass appeal that also reach a larger female audience, as the industry is often viewed as male-focused and male-dominated.

"We need a cultural shift so that young women don't feel that playing games is a hobby monopolized by their boyfriends and husbands," said Mr. Lowenstein, who noted that the industry has to work to break this down.

In moments of his speech that seemed as if he was addressing the industry directly, Mr. Lowenstein claimed that the market can't be misled to believe that only games that receive an "M" rating via the Entertainment Software Rating Board (ESRB) will be chart toppers. Historically, "E"-rated games have posted the highest numbers of sales once best-selling titles such as Grand Theft Auto: San Andreas and Halo 2 have been taken out of consideration.

Other advice to the industry included the suggestion to create games with deeper stories, more emotional impact and to create titles that "linger and become part of your psyche," as found with other forms of entertainment that resonate with their audience.

"Let's be honest...no one likes to die over and over and over again. This is the only industry that you have to go out and buy a 200 page book in order to finish a game," commented Mr. Lowenstein, who then mentioned the idea that games of different difficulty levels with alternate price could be created to appeal to both the casual and hardcore elements of the video game market.

The industry's current financing models, often viewed as publisher-controlled, were also highlighted in the speech. Although the market for video games has doubled over the last five years, the average development budget for a new video game is in the $10 million dollar range, a factor that makes publishers careful about which projects they'll fund, the safest choices generally being established licenses or sequels to successful games. New sources of capital are necessary for riskier, outside-the-box games, suggested Mr. Lowenstein.

Online and mobile markets were illustrated as needing to be driven and embraced according to Mr. Lowenstein, who pointed out the U.S. game industry has been slow to take advantage of foreign business markets, especially in nations where established broadband infrastructures are already in place and online gaming has a ready market waiting for it. The U.S. mobile phone market, which is improving "painfully slowly", needs to be tapped into in order to bring domestic technologies to the same level as those of leading Asian markets.

The final and strongest point of Mr. Lowenstein's keynote was the fact that the video game industry needs to surmount the cultural bias that typically holds negative connotations about it. The video game industry continues to be attacked on several fronts, but the industry itself should focus on parents who play games as well as consider its works to be protected forms of speech. At the same time, the industry should ask itself if everything which pushes the envelope (especially elements which are considered controversial, such as sex or violence in a given title) is actually necessary to push the envelope.

"Acceptance is the key to legitimacy," said Mr. Lowenstein, who ended the speech by pointing out that the video game industry needs to avoid "quick hits" that help sell a game and encourage ideas that boost the industry's credibility while occasionally exercising both self-criticism and self-examination when necessary.