Water shortages? There’s a game for that now. Ditto world famine, the global oil market, and the struggle for Middle East peace. In fact, over the last couple of years, there has been a surge in the number of video game developers who would rather design for social problem solving than entertainment (think Grand Theft Auto meets the electric car).

That’s good news for the rest of us: video games have finally begun to shed their one-size-fits-all reputation for blood and bombast. Behavioral experts agree that so-called “games for good” can teach empathy to those who play them — a prerequisite for collaborative problem solving.

But the really good news here? Demand for such “social issues” games is rising, too — thanks in part to the federal government, which has started to commission hundreds of them across multiple agencies. According to Kumar Garg, of the White House Office of Science and Technology Policy, the demand is certain to continue, at least for the next couple of years. “Society is becoming more social given the social networking technologies before us,” Garg told people attending the recent 2010 Games for Change Festival in Manhattan. Says Games for Change Chairman Alan Gershenfeld , “When people are motivated, they can move mountains. When they aren’t, it takes mountains to move them. Games can build an incredible motivation to learn and to act. Games can be that bridge to more civic engagement.”

I caught up recently with Gershenfeld in New York. What follows is an edited transcript of our conversation:

You say that games can tie social networks to social action. What makes you so sure?

Games are unique as a medium in that they’re interactive and participatory. That separates games from linear media like film and television. Games let you step into other peoples’ shoes, take on roles, make decisions with agency and see the consequences. Again, that’s very unique. There’s a game called Peacemaker where you can play the Israeli leadership side or the Palestinian leadership side in the Middle East conflict. Nothing in game design is neutral and this game was really well reviewed; philanthropists on both sides of the conflict have released it. It’s intriguing and worthwhile to be able to step into somebody else’s shoes.

Games create a motivation to learn, and in some ways, I think, that is the most powerful thing. We live in a country where 30 percent of kids are dropping out of high school — in many cities the dropout rate is as high as 50 percent. And yet 97 percent of kids are playing games. If you can tap into this medium that has this incredible potential for learning, I do believe — if it’s really thoughtfully done and rigorously tested — game play can be a key piece of keeping kids motivated in school and wanting to learn. Games help foster peer to peer learning.

Can games in the digital space jump over and create behavior change in the real world in mass numbers?

Absolutely, but it’s not simple. Like film and radio, it takes hard work. It takes great craft.  There are, certainly, a lot of examples of people who have created games that have created behavior change in the real world. Have they scaled to millions or 10 millions? Not yet, but I am confident as we raise the sector, they will.

Today, almost every major foundation and major government agency is either funding games or looking at funding games. Additionally, the White House is sponsoring multiple game-based contests around childhood obesity and around STEM learning — science, technology, engineering, and mathematics.

We’re at a point where it’s less about convincing people that games are a social impact medium that should be looked at and more about this question: “How can we most effectively leverage this medium for the public good?” We have a Corporation for Public Broadcasting in this country. We have a National Public Radio. They’ve had an enormous impact on closing the gap between what the commercial TV and radio industries don’t accomplish and what each medium is capable of doing.  Why don’t we have a Corporation for Public Gaming?

Why not, indeed?

For a long time, people just looked at computer and videogames as frivolous at best, and at worst, things that have been really bad for you. Most of the public dialogue has been around the negative aspects. I think there is an important debate to be had about the role of computer and video games in society and their effect on children and adults. But there has been very little discussion, until recently, about how this incredibly powerful game medium could be harnessed for learning, health and social impact. In the last few years, the [games-for-social-change] sector has been growing by leaps and bounds because there is increasing amounts of research showing just how powerful the medium is.

Who’s behind this movement to formalize the games-for-good sector?

There are organizations now that specifically focus on games for change, games for health, and games for learning. There also are academic centers doing innovative stuff now around games — University of Southern California, Carnegie-Mellon University, MIT, University of Wisconsin, Georgia Tech, and so on. And there are government groups as well as major philanthropic foundations like the John D. & Catherine T. MacArthur Foundation, the Knight Foundation and the Bill & Melinda Gates Foundation that are looking hard at the games sector. There is also growing interest among game developers from the commercial side of the games industry. As the gaming industry has aged, the game makers have aged and have had kids of their own. A bunch of game makers are looking now to start their second careers, and society is starting to see more and more individuals within companies wanting to embrace these social-good games, as well.

What could a Corporation for Public Gaming achieve that government isn’t already or cannot?

The structure of how the government should engage in public interest gaming needs more thought and research. How might public games be similar or different from public television and public radio? Different countries have different models for public support of the media. In America, it’s a divided model; there is some public funding but also sponsorship and “viewers like you.” I think that’s a very powerful concept, that the viewers are a key part of the funding cycle for programming. In terms of funding and governance, there is some real thought and history to build upon. But even before we talk about funding — because, as we speak, there are hundreds if not thousands of games being made with taxpayer dollars across multiple government agencies — just insuring that those taxpayer dollars are being spent efficiently is another component.

Games are a young, constantly changing, very complex medium with many different platforms. I do think that another role, perhaps, for a Corporation for Public Gaming would be to ensure that the people who are coding games in the public interest have the right skills and tools to effectively make those games. They should also have a portfolio of games under their belts: the best-selling game franchises in the commercial business often have been built over many, many cycles — World of Warcraft, Call of Duty, Guitar Hero, the John Madden football franchise.

Government agencies and philanthropies also tend to award a lot of grants but they don’t necessarily have the skills to assess the people who apply for them. They don’t always know whether applicants have the right technology, design or management skills, and experience. Government agencies and philanthropies also don’t have the ability to troubleshoot if game projects go awry: games are very complex and the development of them often can go awry. Government agencies and philanthropies also don’t always think through the marketing, distribution, and outreach.  These are things that game publishers do. I sometimes call these philanthropic foundations and government agencies ‘accidental game publishers’ because they’ve taken on all of the responsibilities of a game publisher but they do not have the staff or the knowledge to do it. I think this is a clarion call for the creation of new public-private partnerships or perhaps some new entity within government that could provide the kind of scaffolding needed to take full advantage of the medium.

Why are games so powerful?

Besides being interactive and participatory, they’re also unique in that you can use them to fail in a safe environment. Failing in a virtual space is much safer than failing in the real world. For example, there’s a game being presented this year around climate change by a group in England called Red Redemption. They actually did a lot of research on this release. In the game, you can pay the failure state — where essentially, you melt down the entire planet. Red Redemption found that players who did that retained more of the learnings of the game than did those who saved the planet. You don’t have to put people down a literal path. You can use the medium in really inventive ways and test to see if the pedagogy and impact, the rewards and challenges, are really coming out.

What are some of the new trends in the space?

Social networking games like Farmville, the Zynga games, the virtual worlds. Social networking games are services, not products.  And what the successful games in this space do is pair the game designers with the heuristic experts, to scale the number of players. That same rigor of getting really talented game designers to sit down and work with really smart heuristic experts could and should be applied to social impact goals to scale participation and educational impact or health impact or social impact.

Not only are games highly interactive but some also allow players to build their own achievement levels. To build a game level, you have to build mastery around the subject matter. You can empower youth through game design. Designing a game is an incredibly complex process. You are designing a digital system for somebody else to use and one that has to be in balance. We live in a world of systems. So if you look at the emerging 21st century literacy skills, they involve things like creativity, collaboration, systems thinking, problem-solving, iterative design, and digital media literacies. These are skills that kids and grown-ups will need in the 21st century world. Designing games hits every one of those buttons.