The study also found that the industry generated an additional $10.5 billion in economic activity from the sale of computer and video game software, and some related game hardware.



This new study clearly dramatizes the growing importance of the video game industry in America's high-tech sector, said Douglas Lowenstein, president of the Interactive Digital Software Association (IDSA), which commissioned the study by Nathan Associates Inc. With the introduction of new advanced game machines, surging demand for video game software, and an expanding base of dedicated and casual game players, it's clear that the industry will be a major force in the American economy for years to come.

The detailed study of U.S. Government census and other economic data shows that sales in the game software industry in the year 2000 grew at a rate of 14.9 percent per year, more than double the rate of growth of the U.S. economy as a whole and far outpacing sales growth in related industries.

Moreover, growth in employment, and wages in the computer and video game industry between 1995 and 2000 far outpaced growth in other major U.S. industries. For example, wages generated by the computer and video game industry showed an annual growth rate of 17.4 percent, and employment generated by the industry grew at 10.1 percent per year. By comparison, motion picture production, distribution and allied services sectors, widely considered to be the king of America's entertainment industries, have recognized growth in annual wages of 9.2 percent and employment of 5.2 percent during the same period.

Equally striking, the video game industry job and wage growth rates outstripped those of such high-tech stalwarts as the computer manufacturing industry, consumer electronics and computer storage industries.

The study also revealed that the entertainment software industry is a leader in research and development. The report shows that the game software publishing industry devotes 14 percent of its receipts to research and development compared with other entertainment industries, which devote 9 to 12 percent of sales to R&D.

The report, titled Economic Impacts of the Demand for Computer and Video Games, captures the complete impact the computer and video game industry has had on employment, wages and income taxes, in addition to the indirect effects on other industries. The study was authored by Robert Damuth of Nathan Associates Inc. and relied on data found in publicly available sources, primarily the economic censuses and annual surveys of the U.S. Department of Commerce.

In addition, some data were collected from research companies as noted in the report. Indirect economic effects were estimated using economic impact multipliers provided by the Bureau of Economic Analysis, U.S. Department of Commerce.