In recent years the video game industry has come under fire from parents and legislators, largely because of the possible connection between game violence and real violence committed by children. This controversy has sparked a lot of discussion around placing legal restrictions on video game content.
The creation of the ESRB was in part an attempt to avoid these legal restrictions by adopting voluntary, industry-sanctioned controls. This follows several precedents in other media industries.
The Motion Picture Association of America followed the same course when it adopted its own ratings system in 1968 (administered by the Classification and Ratings System, or CARA). In the 1980s, the music industry began voluntarily placing "Parental Advisory: Explicit Lyrics" stickers on CDs containing strong or violent language. In 1954 the publication "Seduction of the Innocent" proclaimed that comic books were twisting the minds of America's youth. A Congressional committee investigated, threatened legal control, and the comic book industry quickly formed the Comics Code Authority. The CCA had a long list of elements that could not be included in comic books, such as drug use, nudity, negative portrayals of authority figures, and poor grammar. Since the 1990s, CCA guidelines have been generally abandoned by major comic publishers. Marvel Comics adopted its own ratings system in 2001.
Have ESRB ratings actually helped shield the video game industry from laws that restrict game sales? Not entirely. At the state and county levels, legislators have proposed and even passed laws that require parental warning labels on certain games and result in fines or jail time for retailers who sell games to children. These laws have been repeatedly overturned by the court system, however. The rules defining which games can't be sold to minors are so hard to decipher that retailers have a difficult time determining if they're breaking the law. Courts have also concluded that the laws violate the First Amendment of the United States Constitution. In 2003, the Eighth Circuit Court of Appeals ruled that video games are on par with other forms of literature, including music, books, and television shows, and are therefore protected by the First Amendment [ref].
Next, we'll see if ratings have any effect on sales.