DETROIT — Gov. Jennifer Granholm signed legislation that would make it illegal to sell or rent adult-rated video games to those 17 and younger.

“These are not just harmless games. The child becomes the protagonist,” Granholm said before signing the legislation Monday afternoon in Detroit.

One new law would punish those selling “M” — for mature — video games for disseminating sexually explicit matter to minors. Retailers could face a felony punishable by up to two years in prison and up to a $10,000 fine.

Hal Halpin, president of the Interactive Entertainment Merchants Association, said the video game industry almost certainly will file a lawsuit. Federal courts have struck down video game bans approved by Washington state, Indianapolis and St. Louis County in Missouri, saying they encroached on the First Amendment.

“Generally speaking, we feel it’s unfair to single out games as an art form and treat them differently from music and movies,” Halpin said.

Granholm said she is confident the Michigan law will hold up.

“We are adopting the entertainment software’s standards. We’re merely asking them to card,” she said.

Halpin said stores already are voluntarily asking teens to show ID when trying to buy mature-rated games.

“Our goal is to card at the same success rate as movie theater owners,” he said. “Legislating us to do what we’ve already committed to is unnecessary.”

Granholm acknowledged that several retailers have already stepped up to prevent selling adult-rated games to minors or remove them from their stores altogether.

She signed another law requiring retailers to post a sign explaining the rating system used for video games, something Halpin said many already do. Under the new law, failure to post the sign would be punishable by up to a $1,000 fine.

The governor likened the video games to alcohol and other materials that are “kept behind the counter” but Halpin said they should instead be treated like movies, music and television.

The Entertainment Software Rating Board, a self-regulatory body set up by the gaming industry, has set up a video game rating system similar to movie ratings. The “M” rated games may contain intense violence, blood and gore, sexual content and/or strong language.

Mature-rated games comprised 12 percent of all new games released last year and 16 percent of sales. “Grand Theft Auto: San Andreas,” criticized for violence and an Internet download that allows for sexually graphic scenes, was the highest-selling game of 2004