Thirty years ago, Congress forced the video game industry to grow up

Every week, more than 212 million Americans play a video game for an hour or more. The average age of those players is 32 years old. It’s an industry that has won cases in front of the Supreme Court and whose collective annual revenues have surpassed those of the Hollywood box office.



That journey to a respected entertainment medium, in many ways, got started 30 years ago, when over the course of a few fateful months, the video game industry faced a number of challenges and made a series of directional changes that ultimately led to it becoming the $184 billion powerhouse it is today.







This story is part of 1994 Week , where we’ll revisit some of the most interesting and confounding developments in tech 30 years ago.







In the summer of 1994, the home video game industry was, effectively, 17 years old (assuming you use the release of the Atari 2600 as the starting point of this timeline). And like any teen, it was beginning to leave its childhood days behind for good.



Congressional troubles



Things weren’t looking good for game makers as the summer of ’94 approached. The previous December (and again in March of ‘94), the industry had been hauled in front of Congress, as Senators Joseph Lieberman (D-Conn.) and Herb Kohl (D-Wis.) co-chaired a hearing to discuss what the industry was doing to keep violent games out of the hands of young children.



At the center of that was Mortal Kombat , the gory fighting game that let you literally rip the spine from your opponent. Nintendo, which at the time was far-and-away the leading console manufacturer, rejected the game’s violence, forcing developers to leave out blood and gory elements in the version released on its system, but Sega saw an opportunity for its Genesis console and welcomed the explicit content. Sega’s sales of Mortal Kombat surpassed those of the SNES system and exposed a weakness in Nintendo’s armor: The company was so committed to being family-friendly entertainment, it was willing to ignore an older audience.



By May, legislation was on the Senate floor, calling for a government panel to develop a video game ratings system if the industry couldn’t put one of its own together within the next year.



Realizing just how dire things could become, the industry, which had previously been loosely organized at best, began to unify. And in April, it officially founded the Interactive Digital Software Association (IDSA), which in 2003 would change its name to the Entertainment Software Association (ESA). Headed, at the time, by Douglas Lowenstein, the IDSA knew the video game industry was in a crisis of its own making, fueled by rapid expansion.



“Congress smelled blood in the water,” says Chris Kohler, a video game historian and editorial director at Digital Eclipse Entertainment Partners. “They smelled an issue they could rally around and make a lot of political hay off of. The video game industry realized it could no longer operate on the sidelines. It needed an organization in Washington, D.C. representing it and lobbying for its interests.”



Sega had its own ratings system in place, but adopting a competitor’s option was a nonstarter for Nintendo. The Motion Picture Association of America (MPAA) approached game makers about taking on rating responsibilities, but the industry had concerns about conflicts of interest and the MPAA’s knowledge of video games.



“The idea of being a ‘stepchild’ to the Motion Picture Association of America just wasn’t appealing to people,” Lowenstein said in Content Rated By: An Oral History of the ESRB , a behind-the-scenes story put out by the Entertainment Software Ratings Board (ESRB). “We felt we needed to develop something that was unique to this form of entertainment.”



An internally-developed ratings system was developed—two in fact, one for PC games and the other for console titles—and launched before the end of 1994. (Eventually, those systems would be streamlined with the ESRB utilizing the same ratings for all games.) Lieberman and other vocal critics would continue to pound the industry for years, but the self-regulation stopped the threat of government oversight.



A hint of the future



As the industry dealt with the existential threat from the government and critics, game makers also were beginning to expand their definition of what gaming could be. Not only were titles offering choices for a wider age range of players, but Sega began work on what would become a precursor to online gaming and digital distribution.



The Sega Channel didn’t launch until December of 1994, but the service, offered in conjunction with TCI and Time Warner Cable, let players access a library of titles for the Sega Genesis online.



It wasn’t without its flaws. The Sega Channel was expensive, costing $15 per month, the equivalent of $32 today, and when you powered off your system, the download was erased, meaning your progress would be lost. It also came out toward the end of the Genesis’s lifespan, which hampered exposure.



Players, though, had access to a collection of 50 Genesis games at a time and it managed to gather as many as 250,000 subscribers before it was shut down in the summer of 1998, carving a path for other online services. Microsoft’s GamePass service might not be around today if the Sega Channel had completely fallen flat.



‘The year of the cartridge ‘



On January 5, 1994, as the Consumer Entertainment Show kicked off, Nintendo issued a press release declaring it to be “the year of the cartridge.” By the time the year ended, though, the game cartridge was facing a competitor that would ultimately doom it to extinction.



Games on CD-ROM were not only cheaper to produce, the medium offered significantly greater storage capacity and a much quicker production turnaround time. So when Sony entered the video game space with the launch of the CD-ROM-based PlayStation in December of 1994, developers were firmly onboard.



Beyond offering a more economical way to distribute games (and offer them at lower retail costs), the PlayStation was a system that was designed with a wider audience in mind.



“The fundamental coolness of the PlayStation was it was at home in a kid’s bedroom, but it could be in a college dorm and sit next to your high-end audio equipment or in the living room,” says Kohler. “They did something that really expanded the audience.”



The PlayStation, of course, was the system that flourished after its 1994 launch, but it was hardly the only game console to test the market that year. The Sega Saturn made its debut, as did the Bandai Playdia (in Japan) and SNK Neo Geo CD. None of the new systems used cartridges.



The end of the pixel era



The extra memory that CD-ROMs provided also allowed game developers to move away from pixel-based games and focus more on larger games made with polygons, which could offer a more three-dimensional experience. PC developers, such as id Software, were already exploring this then-new style of coding and others quickly followed suit.



The additional storage space also led to the short-lived phenomenon of games with live-action, full motion video (FMV) cutscenes, such as Wing Commander III: Heart of the Tiger (starring Mark Hamil) and Tex Murphy: Under a Killing Moon ).









It would be 28 years before FMV would make any sort of a reasonable comeback. 2022’s Immortality was a critically acclaimed title that uses FMV in a unique and thought-provoking way.



The birth of E3



Video games, in 1994, traditionally showed off their up-and-coming titles at the summer edition of CES. But as the IDSA formed, publishers and console-makers began to consider a trade show of their own. And by the summer of ’94, planning was underway for the Electronic Entertainment Expo—E3, a trade show that would become pseudonymous with the gaming industry until it was cancelled in 2023.



“Once the decision was made to create a trade association, then we had to figure out a way to fund the association,” Lowenstein said in Content Rated By . “The industry had felt increasingly marginalized at the Consumer Electronics Show, which is where it had been going as a trade show venue. And so there was a sense that one of the other major acts of this organization in those early days was creating a trade show that would celebrate the industry. And not coincidentally, a trade show [like that] could provide a funding source to operate the ratings board.”



Games that stand the test of time



Donkey Kong Country was the best-selling game of 1994, but it wasn’t the one that helped the industry mature. A number of games created legacies that can still be felt today.



Mortal Kombat II and Doom II showed there was definitely an audience for bloody action games. Electronic Arts released a game for the 3DO called The Need for Speed , which would go on to be a major franchise in the industry. Bethesda Softworks released The Elder Scrolls: Arena , which would give birth to what is arguably the most-loved role-playing franchise in the industry. And a game called System Shock made its way to PCs. While that game’s legacy is just starting to be acknowledged by many players, it was the spiritual forerunner to many modern classics, from Bioshock to Dishonored —grown-up games that tell complicated stories without ignoring fun gameplay.



It’s a long way from Pong .