Perhaps most important, interactive entertainment is changing the way an entire generation sees itself in relation to the world, expanding popular storytelling beyond passive consumption to include involvement in the development and outcome of an experience. This relatively young industry - only three decades old - is now so pervasive that each person has a stake in how it evolves.

"We have a whole new generation of game players who are going to be the prime engine of our economy and society," says Robert Andersen of the College for Creative Studies in Detroit. "These are the people who will be writing our books, interpreting history, becoming scholars and doctors. It's too late to marginalize the gamer now; the industry is imbedded in the fabric of our society."

This industry is now at an important crossroads, say experts, largely due to its explosive growth. With the costs to develop a hit new game now topping $10 million, major game companies such as Sony and Microsoft are in danger of favoring profits over the innovative spirit that brought them to this point.

"We need games with better stories, more interesting and complex characters; games that keep you up at night wrestling with whether you made the right ethical or moral choices," says Doug Lowenstein, president of the Entertainment Software Association (ESA).

"We are seeing [interactive entertainment] in its infancy right now," says Rob Adams of Orbital Media, which publishes family games. "It's like being at the dawn of television," he says. "What happens now is going to affect how everyone is entertained in the future."