The $150 billion video game industry grapples with a murky track record on diversity

The video game industry may be booming in the coronavirus era but it continues to face intensifying pressure over its handling of diversity and inclusion.

For years, gaming has been criticized for fostering a culture that excludes and is even hostile toward women. Stereotypes surrounding so-called “gamer girls” for instance have led to harassment of female gamers online and resulted in a perception of the $150 billion industry as one dominated by men.

The industry has been trying to change this by highlighting the variety of people that play video games and throwing the spotlight on initiatives to engage women, ethnic minorities and other underrepresented groups. The Entertainment Software Association (ESA) for instance notes that American gamers are almost evenly split between men (54%) and women (46%).

But industry employment demographics show a different picture. “The industry is overwhelmingly white and male,” Tanya DePass, director and founder of I Need Diverse Games, a non-profit aiming to diversify the gaming industry, told CNBC. 

According to the International Game Developers Association (IGDA), 71% of game developers globally are men while just 24% are women and 3% are non-binary. And when it comes to race and ethnicity, just 2% of developers are Black while 69% identify as white.

Jay-Ann Lopez, founder of the online community Black Girl Gamers, said that increasing diversity and inclusion in the sector has been a “work in progress.” Big industry events like E3 — which is usually hosted by the ESA every year — and Gamescom “happen to be very male-led,” Lopez, who is based in the U.K., told CNBC.

“Even the way they’re designed, marketed and structured is very male-focused,” she added. “It’s hard, especially now, to tell what action (on diversity and inclusion) is actually being taken as opposed to performative narrative.”

Lopez held an online summit on the Amazon-owned live streaming service Twitch in June, aimed at giving a platform to Black game streamers as well as industry representatives from the likes of Ubisoft and “League of Legends” developer Riot Games. Her organization began as a small Facebook group in 2015 but has since grown into a community of around 6,000 members, Lopez said.

This year, the issue of discrimination against women in the industry in particular has manifested itself in a number of ways.

Last month, Ubisoft announced plans to shake up its work culture in response to allegations of sexual harassment and discrimination at the company. According to Bloomberg, the French publisher’s now-former creative chief Serge Hascoet behaved inappropriately around women and even prevented a female character from becoming the only playable lead in the game “Assassin’s Creed Odyssey.” Hascoet was not immediately available for comment when contacted by CNBC.

Hascoet and two other top executives of the company resigned following an investigation into allegations of misconduct. When asked about the allegations in Bloomberg’s reporting, an Ubisoft spokesman told CNBC: “We don’t have anything else to share at this time.”

Meanwhile, the trailer for a full-motion video game called Gamer Girl received sharp criticism for its portrayal of a female game streamer whose actions are controlled by the player, which assumes the role of her livestream’s chat moderator. The trailer was subsequently pulled, but its publisher, Wales Interactive, claimed it was created “to raise the issue of the toxic environment which can often appear online behind the anonymity of a username.”

A string of controversies in the industry has exposed the gaming industry’s murky track record on diversity. It’s been years since the so-called Gamergate scandal, which saw women in the industry subjected to coordinated harassment. The episode at the time highlighted a toxic culture in gaming that enabled sexism and harassment of non-white male gamers and developers.

“The industry hasn’t progressed, especially with all the folks being outed as abusers, rapists and harassers on the (developer) side,” DePass said. “It’s far too common to see threats, hate and other vitriol flung at community managers, developers when they are more public facing or have any kind of social media presence.”

Sony-owned video game developer Naughty Dog faced an online backlash over its survival horror game The Last of Us 2, with one of the game’s voice actors, Laura Bailey, receiving death threats on social media. “I try to only post positive stuff on here,” Bailey wrote on Twitter, “but sometimes this just gets a little overwhelming.”

“The games industry have not been able to keep the Black, ethnic minorities, LGBTQ+ & women safe,” Stephanie Ijoma, founder of Black gaming and entertainment organization NNESAGA, told CNBC. “There is a lot of abuse in power in this industry which opens the floor up for incidents to happen.”

There have been some positive steps around diversity, particularly in the creation of video games. Titles like The Last of Us 2 and Tell Me Why, a Microsoft exclusive from French developer Dontnod Entertainment, have won praise for increasing the visibility of LGBT characters.

And in the competitive e-sports scene, several top executives at professional gaming organization FaZe Clan recently quit to start a competing venture focused on bringing more women, people of color and LGBT people into the mix.

For Nicole LaPointe Jameson, CEO of Evil Geniuses, investors have a particularly important role to play in helping diversify talent in the industry. Jameson, who previously worked in private equity, said the bulk of investment that goes into e-sports tends to come from venture capital, or VC, investors.

“Part of the esports problem is there aren’t a lot of diverse owners and founders in the space,” she told CNBC. “Even though it’s changed over the past year, the type of investor profile that’s interested in a space like this tends to be venture.”

Jameson says it wasn’t easy for her to enter the space. “There was no one like myself, however you want to slice the pie: national background, demographic, age, gender, race,” she said. But, she added: “To be diverse is to be successful.”

Roberta Lucca, co-founder and chief marketing officer of British game developer Bossa Studios, also thinks investors need to play their part. Herself an angel investor, Lucca says a big focus for her has been identifying “underrepresented founders” in the space.

Lucca and fellow Bossa Studios co-founder Henrique Olifiers think that big triple-A developers need to be ready to take more risks in game development. Olifiers notes that the independent publisher created a diverse set of characters for its upcoming Surgeon Simulator 2 game.

Indie developers are “less constrained” by “established dogmas that take a long time to chip away,” Olifiers said. “The bigger a game, the more risk averse that production has to be. In doing so, naturally they tend to perpetuate dogma, whereas smaller games can be more risky in that regard — even though there’s no risk at all to being inclusive and broader.”

Demand for gaming has exploded during the coronavirus pandemic. According to analysis firm NPD Group, a record $11.6 billion was spent on video games in the U.S. in the second quarter, up 30% from the previous year. Major companies in the industry such as Nintendo and Activision have benefited as a result, posting better-than-expected earnings.