[ Update: Josh has posted his thoughts. Favorite line: "The problem with that is that the ESRB continues to act more like a political body than as a standards body." Bingo. ]
Here's what I think: I read the ESRB press release last week, and I think it's mostly crap.
The ESRB is digging a hole. Are they regulating what consumers see? If so, then Hot Coffee should never have been an issue, since it could not be activated from within the unaltered game. Are they regulating what's on the disc? If so, then Manhunt 2 should be re-rated, since the images and animations and sounds are all on the disc.
I think the real problem will eventually be whether they are regulating data or code. At that point, I think the current system fails. Suppose I release a program (dressed up as some "game") which takes a user-supplied set of data (say, a music CD, a la Monster Rancher series) as input for algorithms that generate what appear to be images of humans having sex? They aren't actually people, mind you, but the visual images would be called sexual by any reasonable adult. As the developer, I never create models explicitly. I never create animations explicitly. But my program definitely generates what appears to be a sexual image.
Now, will the ESRB regulate what "ships on the disc"? It's just code. Maybe not even textures. Will they regulate what the user sees? They can't know, because the user will supply the data.
The whole idea of regulating media is very thorny. Ideally the ESRB needed to stay as vague as possible about everything they do. History will show that their real error was trying to get specific in response to Hot Coffee. Now that they've written something down, they've got to live by it, and more of their energy will be devoted to making every future controversy square with the first. That system is destined to fail, because the respond to the original controversy was to create a system which regulates what's on the disc, regardless of how it's used.
I think it's possible for us to start having a real conversation about what comes after the ESRB fails.
What if someone makes a phallus-shaped creature in Spore and it ends up on some little kid's world?
My side on it here:
What if someone *doesn't* make a phallus-shaped creature. Now that will be a huge surprise.
History will show that their real error was trying to get specific in response to Hot Coffee.
What was their choice? Do they have have any chance at getting real traction if they don't play the political game?
How does one create a useful alternative?
By saying that the bits on the disc matter, even if the bits are never accessed by the means provided by the author is too specific.
The same bits that the ESRB found offensive when it first rated the game are on the Manhunt 2 disc, but now the code prevents them from being rendered.
They've had to come up with a new reason to justify why this case is different from the other, when it really isn't.
Now, had they stuck with something more vague like "the experience accessible through the in-game interface", they would have left both Manhunt 2 and San Andreas alone, could have justified it on the grounds that consumers modifying the product have specifically strayed from the ESRB's purview, and the decisions would have been consistent. It also leaves the situation vague enough that they are still just talking about exeprience -- which is what the ratings are intended to convey anyway.
I see a regulating agency being detached from the politics and the actors, making rulings, and effectively communicating to the outside parties how to use those rulings appropriately. More and more it looks like the ESRB panicked about Hot Coffee and realized with Manhunt 2 that they were screwed because code can hide graphics in a way that makes an acceptable experience.
I said it here a few months ago, ESRB is in "save their butt" mode. They don't want to be superseded by another organization and the only way to do that in their view is to suck up to the politicians even if that means not doing their jobs at all. The political certainly don’t care if ESRB is being pragmatic, logical or fair. The politicians are being show vertical slices of games and are being told by interest groups there is a problem, and therefore form a political point of view a “visible” change needs to occur. The ESRB is supply a visible change that is politically expedient to ensure they are not plowed under.
The same thing happened with movies and maybe the same solution will apply.
When the rating boards for movies turned the screws the writers and directors actually "developed" their craft thus making much more complex films. They also developed acceptable ways to hide sexuality behind slap stick comedy, violence behind a mask of patriotism, and taboo subjects behind Sci-fi horror movies. By the late 60s and early 70s people had tired of the restrictions and you saw movies throwing off any restrictions and there came an era where you could make movies that you could not make today. Try to make Taxi Diver or Pretty Baby with Dakota Fanning and see what happens?
The cycle for how games are rated and what is acceptable will rise and fall. That doesn’t mean we should not fight, but the only real option aside from ESRB might be something worse.