GameDaily BIZ: Last time I talked to you was at E3, and you were obviously very new to the job at that point; it was literally right after you began. Now you've had more time to talk to companies and familiarize yourself, so how do you feel you've personally adapted to the role?

Michael Gallagher: Firstly, my enthusiasm is probably five times higher than what it was initially, and it was already very high when I first came into the job. So the more I learn, the more driven I am to help this industry garner the full amount of respect that it deserves in the U.S. economy and U.S. culture, and media acceptance and those types of things. So the enthusiasm level's pretty high. I would also say that after eight months into the job, I'm much more comfortable with many of the names and faces, roles and some of the history – at least I've got some familiarity with some of the history of the industry – as well as some of the market dynamics, because after you go through some of the quarterly reporting for the companies and you see how different analysts look at the industry, you learn a lot from that relative to how to make sure the ecosystem for video games can be expanded through policy.

And you have to do that fundamental research in order to be effective, in my view. So much of that is done, but I will continue to learn all the way through my tenure on this job, but I do feel much better grounded in the background information. Also taking a look at the ongoing activities of ESA, which I was just beginning to become familiar with when we first talked in July, I now fully understand everything we are currently doing and have begun the process of coning, turning, trimming some of those activities to where I think they'll be most effective in the months and years ahead. It's a process, but it's one that I'm approaching with a great amount of enthusiasm and curiosity and we've already seen some positive impacts too, so I'm looking forward to the next six months.

BIZ: In terms of the roles of the ESA, I was glad to hear you talk about piracy, because that was something that your predecessor was very passionate about – fighting piracy and talking about how much money the developers and publishers, especially on the PC side, lose to piracy every year. Can you outline a few things specifically lately that the ESA has been doing to combat that?

MG: This is a $3 billion issue to our piece of the software industry. Overall, the impact of piracy to the U.S. economy is over $220 billion dollars a year. The U.S. chamber of commerce did a study on that and put it out, you can find it on their website, and that's everything; that's piracy in pharmaceuticals, written literature and software. For video games, it's a $3 billion issue, and that's from an industry that has $9.5 billion dollars in sales. That's a huge amount of leakage. It's a dramatic amount of harm that is done to the developers, entrepreneurs and the innovators that we have here at the show and it's a top issue for us. So one, yes we recognize the importance of the issue; we've actually got our arms around the rough size of it and it's staggering. It's a significant problem and it's only going to grow as broadband speeds increase and as the hackers are more adept at circumventing the security preventions we have built into the consoles. It's already just a disaster in the PC space, so that's one recognizable challenge.

The second piece is: how do we send the message? I was one a panel with Billy Tozan, who's the CEO of Pharma, with Governor Engler, who's with NAM, the National Association of Manufacturers, Dan Glickman who's the head of the MPAA. The four of us were on this panel together and I was making the case for the importance of fighting piracy for video games side by side with those leaders, so video games are seen as an industry on par with motion pictures, with manufacturers and with Pharma and that's where we belong. We belong on that stage, and we were there. Now, when you get to specific activities, we have an anti-piracy division within ESA that's headed by Ric Hirsch and what it does is it works on enforcement very aggressively. We just recently had a bust in Malaysia where we're going after, as Ric likes to say, the anthills not the ants; we're going after the sources of the material in Malaysia, Uruguay, and Mexico. We're working together in Canada; we just recently had some illegal activity up there. You've got a variety of countries, like North Korea, that we're focusing on. We've got a number of places where the industry helps us do our targeting and we go to work and we get representation on the ground and we get in there to make sure we are making sure that pirates know there's a price to pay in video games. We're also collaborating for the first time with MPAA. We did that with a bust that was accomplished recently... So very aggressive enforcement that is targeted and effective; we're getting results.

Since you and I spoke last, domestically, we had a sting where we used 20 different locations, 16 different U.S. Attorney offices, which simultaneously busted a network of traffickers of pirated goods here in the United States. So, once again, it's very important that we do that because when you get to policy that's another aspect. When we go in for advocacy to the USTR or Department of Commerce, we need to make sure that the U.S. government can send those signals to foreign governments and say "we walk the talk." It's not enough for the U.S. just to say, "Hey, you should do this." We have to lead by example and so ESA is working with the Department of Justice and with the Department of Homeland Security to make sure we are doing exactly that.

BIZ: Regarding the whole Mass Effect/Fox News thing...

MG: [chuckles]

BIZ: It's been on everybody's lips lately, because it was such a big controversy. What do you feel the ESA's role should be in fighting that kind of ignorance and perception around video games? Should you personally be on Fox News or any other network to talk about video games to mainstream America?

MG: It's a great question and it's certainly something we've followed with great interest, but we have to be careful as an association that represents the entire industry, that our activities relative to specific companies and specific titles are very carefully selected. We certainly support the thrust of the industry activities and the reaction of the video gaming community to the distortion that Fox published. So we're certainly supportive, but when you get into specific titles, that's where the line between where ESA's activities stop and the companies pick up. That's where that line gets a little fuzzy, and this one fell on the side of a company issue.