I grew up in Northern Ireland, right up in the very, very north end of it there, where it's absolutely freezing cold. This is me running around in the back garden mid-summer.

(Laughter)

I couldn't pick a career. In Ireland the obvious choice is the military, but to be honest it actually kind of sucks.

(Laughter)

My mother wanted me to be a dentist. But the problem was that people kept blowing everything up. So I actually went to school in Belfast, which was where all the action happened. And this was a pretty common sight. The school I went to was pretty boring. They forced us to learn things like Latin. The school teachers weren't having much fun, the sports were very dirty or very painful. So I cleverly chose rowing, which I got very good at.

And I was actually rowing for my school here until this fateful day, and I flipped over right in front of the entire school. And that was the finishing post right there.

(Laughter)

So this was extremely embarrassing. But our school at that time got a grant from the government, and they got an incredible computer, the research machine 3DZ, and they left the programming manuals laying around. And so students like myself with nothing to do, we would learn how to program it. Also around this time, at home, this was the computer that people were buying. It was called the Sinclair ZX80, this was a 1K computer, and you'd buy your programs on cassette tape.

Actually I'm just going to pause for one second, because I heard that there's a prerequisite to speak here at TED -- you have to have a picture of yourself from the old days with big hair. So I brought a picture with big hair.

(Laughter).

I just want to get that out of the way. So after the Sinclair ZX80 came along the very cleverly named Sinclair ZX81.

(Laughter)

And -- you see the picture at the bottom? There's a picture of a guy doing homework with his son. That's what they thought they had built it for. The reality is we got the programming manual and we started making games for it. We were programming in BASIC, which is a pretty awful language for games, so we ended up learning Assembly language so we could really take control of the hardware. This is the guy that invented it, Sir Clive Sinclair, and he's showing his machine. You had this same thing in America, it was called the Timex Sinclair1000.

To play a game in those days you had to have an imagination to believe that you were really playing "Battlestar Galactica." The graphics were just horrible. You had to have an even better imagination to play this game, "Death Rider." But of course the scientists couldn't help themselves. They started making their own video games. This is one of my favorite ones here, where they have rabbit breeding, so males choose the lucky rabbit.

It was around this time we went from 1K to 16K, which was quite the leap. And if you're wondering how much 16K is, this eBay logo here is 16K. And in that amount of memory someone programmed a full flight simulation program. And that's what it looked like. I spent ages flying this flight simulator, and I honestly believed I could fly airplanes by the end of it.

Here's Clive Sinclair now launching his color computer. He's recognized as being the father of video games in Europe. He's a multi-millionaire, and I think that's why he's smiling in this photograph.

So I went on for the next 20 years or so making a lot of different games. Some of the highlights were things like "The Terminator," "Aladdin," the "Teenage Mutant Hero Turtles." Because I was from the United Kingdom they thought the word ninja was a little too mean for children, so they decided to call it hero instead. I personally preferred the Spanish version, which was "Tortugas Ninja." That was much better.

(Laughter)

Then the last game I did was based on trying to get the video game industry in Hollywood to actually work together on something, instead of licensing from each other, to actually work.

Now, Chris did ask me to bring some statistics with me, so I've done that. The video game industry in 2005 became a 29 billion dollar business. It grows every year. Last year was the biggest year. By 2008, we're going to kick the butt of the music industry. By 2010, we're going to hit 42 billion. 43 percent of gamers are female. So there's a lot more female gamers than people are really aware.

The average age of gamers? Well, obviously it's for children, right? Well, no, actually it's 30 years old. And interestingly, the people who buy the most games are 37. So 37 is our target audience. All video games are violent. Of course the newspapers love to beat on this. But 83 percent of games don't have any mature content whatsoever, so it's just not true.

Online gaming statistics. I brought some stuff on "World of Warcraft," it's 5.5 million players. It makes about 80 million bucks a month in subscriptions. It costs 50 bucks just to install it on your computer, making the publisher about another 275 million. The game costs about 80 million dollars to make, so basically it pays for itself in about a month. A player in a game called "Project Entropia" actually bought his own island for 26,500 dollars. You have to remember that this is not a real island. He didn't actually buy anything, just some data. But he got great terms on it. This purchase included mining and hunting rights, ownership of all land on the island, and a castle with no furniture included.

(Laughter)

This market is now estimated at over 800 million dollars annually. And what's interesting about it is the market was actually created by the gamers themselves. They found clever ways to trade items and to sell their accounts to each other so that they could make money while they were playing their games. I dove onto eBay just a couple of days ago just to see what was gong on, typed in World of Warcraft, got 6,000 items. I liked this one the best. A level 60 Warlock with lots of epics for 174,000 dollars. It's like that guy obviously had some pain while making it.

So as far as popularity of games, what do you think these people are doing here? It turns out they're actually in Hollywood Bowl in Los Angeles listening to the L.A. Philharmonic playing video game music. That's what the show looks like. You would expect it to be cheesy, but it's not. It's very, very epic and a very beautiful concert. And the people that went there absolutely loved it.

What do you think these people are doing? They're actually bringing their computers so they can play games against each other. And this is happening in every city around the world. This is happening in your local cities too, you're probably just not aware of it.

Now, Chris told me that you had a timeline video a few years ago here just to show how video game graphics have been improving. I wanted to update that video and give you a new look at it. But what I want you to do is to try to understand it. We're on this curve, and the graphics are getting so ridiculously better. And I'm going to show you up to maybe 2007. But I want you to try and think about what games could look like 10 years from now. So we're going to start that video.

Video: Throughout human history people have played games. As man's intellect and technology have evolved so too have the games he plays.

(Music)

(Applause)

David Perry: The thing again I want you to think about is, don't look at these graphics and think of that's the way it is. Think about that's where we are right now, and the curve that we're on means that this is going to continue to get better. This is an example of the kind of graphics you need to be able to draw if you wanted to get a job in the video game industry today. You need to be really an incredible artist. And once we get enough of those guys, we're going to want more fantasy artists that can create places we've never been to before, or characters that we've just never seen before.

So the obvious thing for me to talk about today is graphics and audio. But if you were to go to a game developers conference, what they're all talking about is emotion, purpose, meaning, understanding and feeling. You'll hear about talks like, can a video game make you cry? And these are the kind of topics we really actually care about.

I came across a student who's absolutely excellent at expressing himself, and this student agreed that he would not show his video to anybody until you here at TED here had seen it. So I'd like to play this video. So this is a student's opinion on what his experience of games are.

Video: I, like many of you, live somewhere between reality and video games. Some part of me -- a true living, breathing person -- has become programmed, electronic and virtual. The boundary of my brain that divides real from fantasy has finally begun to crumble. I'm a video game addict and this is my story.

(Music)

In the year of my birth the Nintendo Entertainment System also went into development. I played in the backyard, learned to read, and even ate some of my vegetables. Most of my childhood was spent playing with Legos. But as was the case for most of my generation, I spent a lot of time in front of the TV. Mr. Rogers, Walt Disney, Nick Junior, and roughly half a million commercials have undoubtedly left their mark on me.

When my parents bought my sister and I our first Nintendo, whatever inherent addictive quality this early interactive electronic entertainment possessed quickly took hold of me. At some point something clicked.

(Music)

With the combination of simple, interactive stories and the warmth of the TV set, my simple 16-bit Nintendo became more than just an escape. It became an alternate existence, my virtual reality.

(Music)

I'm a video game addict, and it's not because of a certain number of hours I have spent playing, or nights I have gone without sleep to finish the next level. It is because I have had life-altering experiences in virtual space, and video games had begun to erode my own understanding of what is real and what is not. I'm addicted, because even though I know I'm losing my grip on reality, I still crave more.

(Music)

From an early age I learned to invest myself emotionally in what unfolded before me on screen. Today, after 20 years of watching TV geared to make me emotional, even a decent insurance commercial can bring tears to my eyes. I am just one of a new generation that is growing up. A generation who may experience much more meaning through video games than they will through the real world. Video games are nearing an evolutionary leap, a point where game worlds will look and feel just as real as the films we see in theatres, or the news we watch on TV. And while my sense of free will in these virtual worlds may still be limited, what I do learn applies to my real life. Play enough video games and eventually you will really believe you can snowboard, fly a plane, drive a nine-second quarter mile, or kill a man. I know I can.

Unlike any pop culture phenomenon before it, video games actually allow us to become part of the machine. They allow us to sublimate into the culture of interactive, downloaded, streaming, HD reality. We are interacting with our entertainment. I have come to expect this level of interaction. Without it, the problems faced in the real world -- poverty, war, disease and genocide -- lack the levity they should. Their importance blends into the sensationalized drama of prime time TV.

But the beauty of video games today lies not in the lifelike graphics, the vibrating joysticks or virtual surround sound. It lies in that these games are beginning to make me emotional. I have fought in wars, feared for my own survival, watched my cohorts die on beaches and woods that look and feel more real than any textbook or any news story.

The people who create these games are smart. They know what makes me scared, excited, panicked, proud or sad. Then they use these emotions to dimensionalize the worlds they create. A well-designed video game will seamlessly weave the user into the fabric of the virtual experience. As one becomes more experienced the awareness of physical control melts away. I know what I want and I do it. No buttons to push, no triggers to pull, just me and the game. My fate and the fate of the world around me lie inside my hands. I know violent video games make my mother worry. What troubles me is not that video game violence is becoming more and more like real life violence, but that real life violence is starting to look more and more like a video game.

(Music)

These are all troubles outside of myself. I, however, have a problem very close to home. Something has happened to my brain.

(Music)

Perhaps there is a single part of our brain that holds all of our gut instincts, the things we know to do before we even think. While some of these instincts may be innate, most are learned, and all of them are hardwired into our brains. These instincts are essential for survival in both real and virtual worlds. Only in recent years has the technology behind video games allowed for a true overlap in stimuli. As gamers we are now living by the same laws of physics in the same cities and doing many of the same things we once did in real life, only virtually. Consider this -- my real life car has about 25,000 miles on it. In all my driving games, I've driven a total of 31, 459 miles. To some degree I've learned how to drive from the game. The sensory cues are very similar. It's a funny feeling when you have spent more time doing something on the TV than you have in real life. When I am driving down a road at sunset all I can think is, this is almost as beautiful as my games are.

For my virtual worlds are perfect. More beautiful and rich than the real world around us. I'm not sure what the implications of my experience are, but the potential for using realistic video game stimuli in repetition on a vast number of loyal participants is frightening to me. Today I believe Big Brother would find much more success brainwashing the masses with video games rather than just simply TVs. Video games are fun, engaging, and leave your brain completely vulnerable to re-programming. But maybe brainwashing isn't always bad.

Imagine a game that teaches us to respect each other, or helps us to understand the problems we're all facing in the real world. There is a potential to do good as well. It is critical as these virtual worlds continue to mirror the real world we live in, that game developers realize that they have tremendous responsibilities before them. I'm not sure what the future of video games holds for our civilization. But as virtual and real world experiences increasingly overlap there is a greater and greater potential for other people to feel the same way I do.

What I have only recently come to realize is that beyond the graphics, sound, game play and emotion it is the power to break down reality that is so fascinating and addictive to me. I know that I am losing my grip. Part of me is just waiting to let go. I know though, that no matter how amazing video games may become, or how flat the real world may seem to us, that we must stay aware of what our games are teaching us and how they leave us feeling when we finally do unplug.

(Applause)

DP: Wow.

(Applause)

DP: I found that video very, very thought provoking, and that's why I wanted to bring it here for you guys to see. And what was interesting about it is the obvious choice for me to talk about was graphics and audio. But as you heard, Michael talked about all these other elements as well. Video games give an awful lot of other things too, and that's why people get so addicted. The most important one being fun.

The name of this track is "The Magic To Come." Who is that going to come from? Is it going to come from the best directors in the world as we thought it probably would? I don't think so. I think it's going to come from the children who are growing up now that aren't stuck with all of the stuff that we remember from the past. They're going to do it their way, using the tools that we've created. The same with students or highly creative people, writers and people like that.

As far as colleges go, there's about 350 colleges around the world teaching video game courses. That means there's literally thousands of new ideas. Some of the ideas are really dreadful and some of them are great. There's nothing worse than having to listen to someone try and pitch you a really bad video game idea.

(Laughter)

Chris Anderson: You're off, you're off. That's it. He's out of time.

DP: I've just got a little tiny bit more if you'll indulge me.

CA: Go ahead. I'm going to stay right here though.

(Laughter)

This is just a cool shot, because this is students coming to school after class. The school is closed, they're coming back at midnight because they want to pitch their video game ideas. I'm sitting at the front of the class. and they're actually pitching their ideas. So it's hard to get students to come back to class, but it is possible.

This is my daughter, her name's Emma, she's 17 months old. And I've been asking myself, what is Emma going to experience in the video game world? And as I've shown here we have the audience. She's never going to know a world where you can't press a button and have millions of people ready to play. You know, we have the technology. She's never going to know a world where the graphics just aren't stunning and really immersive. And as the student video showed, we can impact and move. She's never going to know a world where video games aren't incredibly emotional and will probably make her cry. I just hope she likes video games.

(Laughter)

So my closing thought. Games on the surface seem simple entertainment, but for those that like to look a little deeper, the new paradigm of video games could open entirely new frontiers to creative minds that like to think big. Where better to challenge those minds than here at TED?

Thank you.

Chris Anderson: David Perry. That was awesome.