Interactive Digital Software Association

The 1999 State of the Industry Report provides a comprehensive overview of the interactive entertainment sector, documenting its rapid evolution into a dominant force in the global home entertainment market. The primary thesis posits that the industry has transitioned from a niche hobby for adolescents into a mainstream, high-growth economic sector characterized by broadening demographics, technological innovation, and a commitment to self-regulation.

Key findings highlight significant financial growth, with industry sales reaching $5.5 billion in the United States by 1998, marking the third consecutive year of double-digit expansion. By the end of 1999, total software sales were projected to rival the box office revenue of the motion picture industry. The report notes a shift in player demographics, as adults now constitute the majority of frequent gamers, with 69 percent of PC players and 54 percent of console players aged 18 or older. Furthermore, the industry serves as a major economic engine, directly employing 50,000 workers in the U.S. and contributing over $16 billion to the national economy.

The scope of the report is primarily focused on the U.S. market, though it addresses global trends, international piracy challenges, and future growth potential in regions like the United Kingdom and Germany. Data is derived from industry surveys, including the 1998 Interactive Entertainment Attitude and Usage study, research from the NPD Group, and an executive survey of industry CEOs.

The report also emphasizes the industry's proactive stance on content management through the Entertainment Software Ratings Board (ESRB). With 75 percent of parents identifying the rating system as helpful, the industry advocates for continued self-regulation over government intervention. Despite this success, the report identifies software piracy as a critical threat, noting $3.2 billion in annual losses, and outlines ongoing efforts to combat intellectual property theft through international enforcement and legislative advocacy.