This is the text of the official position paper distributed by ASP, STAR and ESC. Permission to copy and distribute is granted anyone. Only media and organizations should contact Karen Crowther (who is overwhelmed!). Please write letters and pass this on to your representatives, newspapers etc. ======================================= _______ ____|__ | (R) _______________________ --| | |------------------- STAR Shareware | ____|__ | Association of Trade | | |_| Shareware Association and |__| o | Professionals Resources -----| | |--------------------- P.O Box 13408 |___|___| 545 Grover Rd. Las Vegas, NV 89112 Muskegon, MI 49442-9427 _______________________ --------------------------------- Game Ratings Representative: Educational Software Cooperative Karen Crowther P.O. Box 575 P.O. Box 892 Siloam Springs, AR 72761 Mendocino, CA 95460 --------------------------------- Voice/Fax 707 937-3320 EXECUTIVE SUMMARY ================= The Association of Shareware Professionals (ASP), Shareware Trade Association and Resources (STAR) and the Educational Software Cooperative (ESC), represent more than 2,000 software publishers, distributors and developers. The organizations recognize the need and benefit of proper content labeling on computer software. They have been developing a suitable system for their segment of the industry, and are interested in working with all sectors of the business to create a unified system. They are aware of other efforts along the same lines, and are alarmed that lack of consultation has produced proposals that are potentially devastating the viability of their members' businesses. Working together, they have appointed Ms. Karen Crowther to represent the shareware segment of the software industry as a ratings standard is developed. Ms. Crowther is president of Redwood Games, Inc., a shareware company known for its educational and family oriented games. THE SHAREWARE INDUSTRY ====================== Shareware is a method of marketing software that allows consumers to evaluate a program before paying for the right to use it. In addition to its traditional computer bulletin board and mail order channels, shareware is also sold in mass-market retail stores such as Wal-Mart, K-Mart, Caldor, and CompUSA, representing thousands of titles in tens of thousands of locations. In fact, the bulk of the mass-market, low- cost software is published or licensed from shareware authors. The creation of high-quality, low-cost software by the shareware industry has been a fundamental force in the rapid decline in software prices for consumers. While the shareware industry includes many large companies, it still affords entrepreneurs an opportunity to economically start new software businesses. Much of the innovation that makes America a world leader in software originates in small shareware enterprises, and they are key source of employment in the software sector. PRODUCT RATINGS SYSTEMS ======================= Recently, major publishers of videogame cartridges, led by Japanese companies Nintendo and Sega, organized the Interactive Digital Software Association (IDSA) to create a system to rate the sexual, violent, and other content of computer games. From what can be determined, they seem to intend to expand a Sega internal cartridge-game rating system to encompass the entire software industry by setting up a new review organization. This new bureaucracy would force developers to produce expensive video presentations of their products and then pay to have the videos reviewed before the products could be released. It seems the ratings would be determined by a secret panel of reviewers and judged as to their acceptability to certain audiences. Their system will serve the needs and interests of cartridge manufacturers very well. No consultation outside of the IDSA is known to have taken place. This system is in the formative stages. A working committee of the Software Publishers Association (SPA) is developing a content-based rating system that would uniformly disclose the existence of objectionable matter in software products. The system utilizes "registered disclosure" to record certifications by the publisher as to the product content - affording strong legal protection for consumers while significantly reducing the size and cost of administering the system, and eliminating delays that could have dire consequences for the publishers and retailers. The SPA is consulting with its membership and has been actively soliciting input throughout the industry. This system is in the formative stages. The shareware industry is developing a content-based rating system with specific parameters that allow products to be pre-rated at the developer level. This allows developers to avoid specific content that would result in more severe ratings. The rating system allows for internal tagging of programs to allow them to be scanned for content, making the system suitable for use in the coming "information superhighway" and provides for future software locks that would allow schools and parents to "lock out" software that falls outside their self-determined parameters. The system capitalizes on existing packaging and advertising statutes to provide for strong sanctions against developers that may mis-rate their products. The system eliminates delays, nearly eliminates administrative costs, and meets the needs of developers, publishers, parents and children. The system has been developed with the input of hundreds of developers, using information from the IDSA, the SPA and congress, and is near completion. CONCERNS WITH IDSA PROPOSAL =========================== The associations recognize that the key IDSA players (Nintendo, Sega, and Electronic Arts) are the largest companies in the cartridge games industry. As currently composed, the IDSA has only a dozen members, representing the narrow interests of only the few dozen existing cartridge game manufacturers and is designing a system to meet only their own needs. Although the IDSA proposal will be an easy step for cartridge game manufacturers, it's clearly harmful or potentially fatal to over 1,000 SPA members and over 2,000 ASP, STAR and ESC companies - the bulk of the entire software industry. None of these companies have any representation in the IDSA. The associations were especially alarmed to discover that Senators Kohl and Lieberman have already begun to approach the customers of our members. In letters to our most important and valuable accounts, the senators encouraged them to refuse to purchase our members' products unless rated by the IDSA. If successful, this could force many of our members out of business as they are faced with a choice of submitting to an inappropriate and damaging review process (one which they had no voice in shaping) or to lose their customers altogether. There are a number of areas that the IDSA will need to address before their cartridge-game rating system can be expanded to other software formats and to smaller companies. Review Delays ------------- Cartridge game manufacturing cycles include lengthy periods for tooling and production, requiring many months of advance planning. The cartridge segment also produces only few hundred new products each year. These factors keep the volume of products to review comparatively low and negate the impact of reasonable delays for product review. Our members release hundreds of new products each week, and the number of shareware games already in distribution currently exceeds 10,000 For the IDSA's committee to review all of these within 7 days, as it proposes to do, is not realistic. The associations feel that the IDSA has not taken this into account and so has no realistic plan to deal with the volume. If implemented, the IDSA's system would immediately create a huge backlog of games to be reviewed, greatly slowing the entry of new games into the market. This would intolerably burden an industry whose strength lies partly in innovation and in the quick exploitation of market niches. Adequately addressing this (within the framework of a review panel) will require the commitment of millions of dollars to staff and equip a bureaucracy of magnitude not yet realized by the IDSA. Unlike the game-cartridge segment, the PC software producers have time lags between product completion and production that are frequently measured in hours. During the critical fall season, a two- or four- week delay could be catastrophic to many of our members. Cost ---- The IDSA has indicated that the $500 fee for a rating is a subsidized cost and that, to be self-supporting, its system will require more funds. In the context of the wildly unrealistic volume expectations of the IDSA, it can reasonably be expected that the eventual cost will be many times this amount. Under the IDSA plan, submissions for review would be done on videotape. For cartridge games (which connect directly to TV's and VCR's), this is straightforward and quite inexpensive. For PC games, capturing video and sound on videotape requires the use of costly special video equipment that many shareware companies can't afford. Add to this the reasonable administrative costs in time and manpower for the developers to process their applications, and it's not unreasonable to anticipate costs running into the thousands. This cost will fall most heavily on the children's educational games since these games sell only one third the volume of adult games. To large cartridge-game manufacturers, this is pocket change. To many of our smaller members, it is more than an entire month's income, and would make their continued business operations impossible. Variants -------- While the cartridge game companies rarely make changes to a game after it's released, upgrades and variants are the very lifeblood of the PC market. Products are frequently re-released several times with improvements in art, sound, game design and coding. In the shareware market, this is particularly prevalent with several dozen new releases of a product over its lifetime. These are extremely important to the long-term viability of a product (and a company) in our market. The shareware industry is also unique in its non-exclusivity. Developers frequently release the same basic product (with cosmetic and sometimes content changes) in many different variants to many different publishers. The IDSA proposal makes no allowance for these common occurrences and we fear that this will multiply the costs of the IDSA system to our members. CONCLUSION ========== The membership of our organizations recognize and support the implementation of objective content labeling standards for computer software. They are interested and willing to work with other segments of the software community to establish a workable and useful system. They are deeply concerned that they have not been represented in the development of the system that the senators are now promoting, and are unhappy that their legitimate business needs have been neither heard nor addressed. They have profound reservations about being saddled with an ill-conceived and economically nonviable cartridge-game system, created and controlled by only a dozen large companies from only one small segment of the industry. The ASP, STAR and ESC are creating an objective, content-based, self- rating system which can be implemented under the auspices of the three organizations. Our goal is a system that can provide helpful information in a manner that is consistent and meaningful, and that does not unduly interfere with anyone's ability to market their products. We plan to inform the IDSA and SPA of our progress, and hope to join them in a single standard. We have grave concerns about the apparent possibility of placing control of this important aspect of our business in the hands of an association controlled a handful of very large companies - companies who have no understanding of our part of the industry or empathy for small enterprises. We believe that when the videogame corporations, the public, and Congress better understand this and the importance of shareware to the games market, they will support us in our desire for an effective, viable ratings plan. FOR MORE INFORMATION, CONTACT: Karen Crowther, P.O. Box 892, Mendocino, CA 95460, Voice/Fax 707 937-3320.