The adult entertainment industry is on the verge of making online gaming sexier at a time when mainstream publishers are fighting a political and cultural war over erotic content.
The controversial topic will be the subject of a conference in San Francisco on Thursday, where many of the growing industry's big names will gather.
"This is the newest industry and the oldest industry in the world coming together," said Jezebel, a telephone sex business owner and operator of the virtual Bareback Bordello in RedLightCenter.com, an online game inspired by Amsterdam's famed Red Light District and now in testing.
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Unlike the mainstream games, where virtual sex happens in areas apart from the main thrust of play, RedLightCenter starts with sex.
"Our product is adult-themed and it's only for adult users," said Utherverse Chief Executive Brian Shuster.
The majority of video game sales in the United States come from console and hand-held game sales. Hardware makers Sony Corp. (SNE), Microsoft Corp. (MSFT) and Nintendo Co. Ltd. have long declined to license development software to game makers whose titles include sexual content.
Still, sex has been the hot-button issue for the $12.6 billion U.S. video game industry since its ratings board last summer slapped an "Adults Only 18+" label on Take-Two Interactive Software Inc.'s (TTWO) best-selling "Grand Theft Auto: San Andreas" game.
That move followed the discovery of an explicit sex scene known as "Hot Coffee," which could only be unlocked and viewed with a third-party computer download.
Retailers, who do not carry adult-rated games, pulled the title from shelves, costing Take-Two millions of dollars and putting a chill on an industry accustomed to self-censorship.
The incident inflamed critics of video game makers — whose average U.S. customers is an adult man over the age of 25 — and spawned crusades by lawmakers who want to impose fines on retailers who sell sexually explicit or violent games to minors, despite several court rulings that have blocked such laws on First Amendment grounds.
"I'm not interested in playing the political game of getting a game out in a box and getting it rated. Games have been sickeningly violent over the last decade. Now that they start to show breasts, the government is up in arms," said Shuster.
RedLightCenter is only available via online download.
As bad as it was for mainstream companies, "Hot Coffee" has left the playing field wide open for adult content purveyors, who are always looking for new ways to tempt customers.
Porn site NaughtyAmerica.com promises to challenge RedLightCenter with its adult gaming universe due out in late summer. A subscription to NaughtyAmerica's game will cost less than $12.95 per month, while subscriptions to RedLightCenter will be $20 per month starting June 14.
Those games join other X-rated offerings such as "Virtually Jenna," an online title that gives users the opportunity to have sex with a computer-generated version of popular porn star Jenna Jameson for $29.95 a month.
Paying visitors to RedLightCenter can adopt virtual characters called avatars and use them to live out their sexual fantasies, including having "intercourse" with another avatar.
Still, the game is not limited only to erotic activities. Users can hang around and chat, listen to music at the dance club or even run businesses. The site also offers real-world sex videos and shopping for lingerie and other erotic items.
While sex is the hook, Shuster said his goal is to create a community that drives the heavy traffic a successful Web site needs to thrive.
"Sex isn't as much of a game as it is a way to connect. We're coming in as a way to fill that gap," he said.
In the end, though, the game is all about business.
"It's a more practical way, ultimately, to deliver adult content," he added.