Something has been bothering me for a while now. It’s this claim that Video Games will overtake Movies as an entertainment industry. Sorry to tell you guys, but it just isn’t going to happen. I understand it’s the more interesting story to claim that the video game industry will be bigger than Hollywood, but it just isn’t going to happen. What you see in the graph above (via Matt Griswold) is:
Domestic video games sales vs. Domestic movie box office
That’s right, the figures you usually see don’t take into account DVD Sales, never-mind Digital movie downloads, VOD, or television rights. Hollywood made $15.4 billion on DVD Sales alone in 2007 (thanks to my friend Matt Griswold for the stat). Who knows that the digital movie numbers look like, but Disney alone sold almost 3 million movies on iTunes in 2007, with new releases running $15 a pop. And that is only one movie studio on only one of the available movie download services. And then there is the television market. Consumers pay for HBO so that you can watch the latest movies. HBO and networks pay a premium for the rights to air these films. In 2004 this equated to $16.6 Billion. I’m sure with the expanded cable line-up and introduction of OnDemand movies, these numbers have probably grown considerably We’ll include a conservative estimate of $17.5 billion for 2007). We won’t get into merchandise sales, because it gets too complicated (however, It wouldn’t surprise me if a movie licenses, like Star Wars, probably outperforms the merchandise sales for the entire video game industry… I could be wrong).
And to be fair, the video game sales numbers doesn’t account for the estimated $3 billion in digital game downloads, subscription services like MMORPG’s, Mobile (cellular) games and Downloadable content, which is estimated to be around $3 billion in 2007 (note: I’m not able to find an exact number on this one). I apologize ahead of time if I have gotten any of these numbers wrong. I’ve tried to find the fairest numbers available through internet search, and believe I have done a good job. But it should be noted that this isn’t a media study, and I’m only going off what is available publicly.
So here is the real world chart of the estimated gross revenue that Hollywood makes off movies vs. what the video game industry made off video game sales in 2007:
And to jump off the pure gross money conversation, it might be also interesting to discuss the people numbers behind both businesses.
And mainstream media immediately jumped on the story that The Heartbreak Kid opened to only half of it’s box office goal, a drop blamed on the release of Halo 3. I’m sure the fact that no one in America wanted to see The Heartbreak Kid had nothing to do with it’s lackluster box office efforts. But to give video games their due, Halo 3 did make $170 million in it’s first day of sales, a figure mainstream media was touting as “higher than Spider-Man’s record-holding opening weekend of $151 million.” But most reports failed to mention that a movie ticket costs only $9 while Halo cost $60 (and a whopping $130 for the Legendary Edition) a pop.
But let’s look at the real people numbers:
- Halo 3 has sold over 8.1 million copies.
- Spider-Man 3 sold 49.2 million tickets and an additional 7.1 million DVD’s.
This means that 70.5 million people have been “entertained” by Spider-Man 3 (not including television, digital and on demand viewing), compared to the 13.7 million people who have played Halo 3. It should be noted that I used multipliers on both the video game and dvd numbers to reflect the average amount of people to use said items per household.
And while Video Games will never come close to overtaking movies (at least in the foreseeable future), One thing is for sure, video games are big business. And that can’t be ignored.
March 26th, 2008 at 12:43 pm
That figure isnt necessarily meant to compare movies as a whole, but movie theater audiences.
March 26th, 2008 at 12:50 pm
dameetch: yes, but they’re comparing the domestic video game audience as a whole up to only a portion of the movie audience. That is unfair especially when mainstream media uses these comparisons to predict that video games will overtake movies as an entertainment industry, and that can’t be further from the truth.
March 26th, 2008 at 1:15 pm
At $9 a pop, one only has to play the $60-a-pop halo for 6.6 hours, which really equates to a couple play sessions (if not one long one). Supposing that the average movie time 2 hours, the article’s analysis, along with any other comparative gross dollar figures, aren’t comparing apples to apples.
One could also argue the multiple ticket buys for the same movie (repeat viewings for blockbusters, dragged-along girlfriends, etc), tie-ins not recognized for both, increases in DLC for games, etc, but the main point of these recent studies is not that video games have overtaken Hollywood, but that they may be overtaking the theater, and are certainly closing the gap in dollars.
March 26th, 2008 at 1:44 pm
The B: Your argument makes almost no sense what so ever. This isn’t an argument about time investment, this is an argument about gross revenue, and the facts show that video games will never come close to overtaking movies. The aside at the bottom was to show how few people actually play a big blockbuster game (the biggest of all time even) compared to how many people have seen a movie. I’m sure that repeat viewing theatrically doesn’t even equate into huge numbers. The average and majority of moviegoers will only see a movie once.
Also it should be noted that while Hollywood made $15.4 billion on DVD Sales alone in 2007, we don’t have accurate numbers on how many people rent movies (although with the invention of Netflix, I’d bet it’s a lot).
There are 117 million video rentals a year (this includes gamefly, blockbuster, other chains, mom and pop, everyone)
Netflix alone ships 1.6 million movie rentals a day, on average. That’s over 584 million movie rentals from Netflix alone each year. And who knows how much from Blockbuster, other corporate chains and mom and pop stores.
March 26th, 2008 at 1:48 pm
It’s kind of an apples and oranges thing. The video game industry will go head-to-head against the movie industry in terms of cash… GTA4 is expected to make $360mil in its first week, which is impossible with movies.
For a truer comparison of who can overtake who, you also need to look at individual units sold, not just dollars made. $360mil in video games is only around 5-6mil units, which is actually weak in terms of how many tickets a blockbuster movie will sell in that same week.
Plus there’s the fact that video games are still very much a 13-to-35 male demographic industry, while movies cater to anyone 2 years old and up. And only in movies will you see geeks buying tickets to a movie they don’t care about so they can watch a highly-anticipated trailer that will appear on Youtube 10 minutes after it screens :P That’s like free money for movie studios!
March 26th, 2008 at 2:01 pm
Enrique: Nice take on the whole thing. Yes, it is apples and oranges indeed, but my point is if the media is going to make comparisons, they should do it right and compare the gross revenues from people playing video games against the gross revenues of people watching movies, and not just the small (20-something) percent that sees them theatrically.
March 26th, 2008 at 2:11 pm
Peter, if you know for sure that Movies will always be beating videogame sales then why take the time to compare them, or the media coverage of the comparison?
I don’t play as much video games as I used to but i still watch movies I think will be good or come highly reccommended (or if I want to take a date to a movie I might watch something horrid with other things in mind).
But why can’t I have both? If there was ever a crossing in sales, i wouldn’t be 1% affected.
Personally, i think in the next 50 years movies will begin to become more interactive with the audience, and also play off the audiences senses. I’m not talking about smell-o-vision, or anything like that but maybe things like better more advanced 3D screens.rumbling seats, changing temperatures and setting (fog, mist, ?rain?) or at least the illusion of this stuff.
Getting people into theaters has just gotten harder because of the internet and all that. And it will only get worse. it’s up to the studios to make the experience something you DEFINITELY can’t get at home or anyhwere else.
Personally, I’m excited!
March 26th, 2008 at 2:22 pm
GTA IV will hurt Iron-Man sales.
March 26th, 2008 at 2:28 pm
The media hypes it because 10 years ago video games were for geeks and kids but now you are seeing a larger demographic playing games and much larger budgets to make them so its clear that the industry as a whole is growing all the meanwhile theaters are having more and more trouble getting people in the seats.
Movies will not lose out to games anytime soon. The theaters may have a hard time keeping pace but that is because of technology (home theaters, Blu-Ray, internet). Its so easy and comfortable to watch movies from home it puts a strain on the theaters and thats what is contributing to their sinking profits not games.
March 26th, 2008 at 2:32 pm
Jezzus: If you had read my article, then you would realize my article was written in rebuttle to the mainstream media’s lack 20-20 vision when it comes to things outside mainstream news. They believe that the movie box office represents the gross of the movie industry, when it is only 20-something percent of the money they make purely off people watching movies (merchandising and all that stuff aside).
My second point is even if they were on equal footing from a gross money perspective, which isn’t going to happen anytime in the next couple decades, Films will still boast 7+ times as many actual people enjoying the product.
And yes, both can and will survive together
March 26th, 2008 at 2:34 pm
@ Captain Awesome
Yeah, I agree. If Iron Man opens to less than $70-80 million domestically, not to mention worldwide figures, as Grand Theft Auto IV will be all over the globe at the same time as well, we’ll see a lot more of these pesky “Event Video Games [bigger than] Event Movies?” These stand-offs are few and far between, but the video game industry is the one talking the smack. They obviously view the film industry as the old man in this fight, especially Rock Star Games, who are cockier and louder than id Software ever was.
I also agree with The Jezzus, in that event movies will become more like video games and amusement rides in the future to fight off piracy, the Internet and the narrative film possibly going out of style with youth (I know it’s crazy, but I think some mighty big changes are in store for American pop culture shortly).
Then again, the movie industry is continually moving more horizontal, while the video game industry seems to want those big vertical weekend fireworks that Hollywood has been enjoying and fretting for years.
Also, what happens when video games move into movie theaters? I see that happening in the next 10 years. ’90s quarter arcades on crack.
March 26th, 2008 at 2:40 pm
Hunter: $70-$80 million off the bat is unlikely. The film is projected to make $200 over it’s domestic run. This is the same amount Superman Returns made, and that film had a $50 million opening weekend. And it should be noted that Superman has a much bigger fan following and presence than Iron Man.
I’ve already heard that audience interest in studio tracking has Iron Man at a lower place than to be expected. Again, remember, Iron Man doesn’t have the built in audience of a Spiderman, Batman, Superman, and to many outsiders of the comic book world, he is a b-level superhero.
Will GTA4 hurt Iron Man? A little, but not a lot. I think Iron Man will dissappoint on its own, and yes, GTA4 will get blamed…
March 26th, 2008 at 2:48 pm
And as for the video game experience moving to the movie theater… I’m not so sure. There is no reason in this on demand world to gather together at one place for any activity. Thats why ticket sales are expected to decline while on demand, digital and dvd type options rise. The next generation of video consoles won’t even use discs, you will download the games off the internet, and the used market will die off (sad, yes, this will happen to movies too). The future is more web 2.0, people getting together online, while at home in their separate houses. I doubt the arcade will ever come back. If you think about it logically, there is no reason for it to. Even if the arcades offered the promise of an experience you couldn’t get at home on a console, like some of these Disney arcades with their virtual reality games, it won’t catch on. Video game companies will not develop a game for a couple hundred futuristic arcades when they can do digital downloads to millions of homes around the world.
March 26th, 2008 at 3:02 pm
Hunter did you see when MS had that Imax Halo 3 tour before it’s launch?
My god it was amazing. People were allowed to come and play Halo 3 in high-def Imax goodness. While I don’t own a 360. I got to see the game running on an Imax screen and I just about burst my eyeballs in visual orgasm.
March 26th, 2008 at 3:05 pm
heres a question:
When a game is made into a movie, does that money count towards the movie industry or the game industry:)
March 26th, 2008 at 3:05 pm
@ Peter
Ahh, yes, human interaction going the way of the do-do bird? Theaters, studios and filmmakers are already pushing 3D, bigger screens, $35 tickets, and more expensive movie experiences to pay for more expensive movies. That’s a lot of investment, and a lot of it serves to counteract/compromise with downloading movies and piracy. Kids already spend a lot of time at the mall, I don’t see that changing too much in the future. There will always be nerds and such, sure, but interaction is just a part of growing up.
As video games become more interactive and larger, I do see arcades coming back and possibly moving into theaters, but they won’t look like quarter arcades whatsoever. They’ll be like competitive forums and hang-outs, with events playing right next to 3D blockbusters, concert films, and whatever else. People will still date, unless this avatar make-out sesh stuff really takes off. Please, don’t. Hah.
As for companies developing games solely for these hypothetical arcades, I agree this will not happen. However, these games will all be online and instant. If there’s bait like prizes et al, it could catch on. Movies and video games can benefit each other in the future in a public atmosphere.
Re: Iron Man Expectations
Right. I agree. But Iron Man’s opening and performance will still be compared to comic book movies with equally high budgets. And once the studio starts pushing GTA4 as a primary reason to relieve some of the blame if it does under-perform, we’ll see a lot more articles like the ones you’re dismissing here. And the video game industry will declare victory, and Hollywood will pay more attention next time a Metal Gear or a Halo lands on a prime date. Like a lot of things in Hollywood, this is about public perception, not statistics.
March 26th, 2008 at 3:15 pm
I never understood why anyone cares which sells better.. Both are entertaining and neither are going anywhere.. There will always be movies and there will always be video games. Who sales more of what form of entertainment shouldn’t matter to anyone but the company’s making money.. Not us average people that don’t make anything off of either.
it’s like people ranting Skateboarding is better the BMX. MMA is better then Boxing, etc etc..
naw.. who cares.. it’s all sticking around and not going anywhere and it’s just different forms of entertainment or sport. So why should we worry about who sells more of what?. lets just sit back and enjoy it all.
March 26th, 2008 at 3:15 pm
Yikes. Bitter much?
Never say never.
March 26th, 2008 at 3:18 pm
The thing is people who play video games watch movies but its not any more the other way around since less people play video games. Its less money for a movie ticket plus its alot harder to make the games and 360’s PS3′ and Wii’s.
March 26th, 2008 at 3:20 pm
Does the OP enjoy playing videogames?
March 26th, 2008 at 3:36 pm
Because someone asked and For the record, I do enjoy playing video games. I’ve actually attended 2 E3 (back when it was in the LA Convention center). I am more of a casual gamer now (Guitar Hero, Rock Band and most likely Spore when it comes out).
March 26th, 2008 at 3:44 pm
@John - it’s better to compare the costs on like terms (like a P/E ratio for stocks)… how about “cost per entertainment hour”?
—
Movie (2 hours) = $10 = $5/hour ($10/hour with your lady-friend)
DVD (2 hours) = $20 = $10/hour (same with your lady-friend)
Video Game (20 hours) = $60 = $3/hour (same with ALL your lady-friends)
March 26th, 2008 at 3:51 pm
I don’t think there is any debate over how much entertainment you get for your money, that’s an entirely different conversation. Yes, you get more entertainment for your money with a video game, but you also lose quality. Quality of the computer animation, quality of acting, quality of storytelling (the best video game doesn’t have a story that competes with an average film experience… but thats also another conversation).
Matt, I’d also like to mention that with a DVD, a lot of people watch deleted scenes, commentaries, making ofs. There is more hourage in a dvd experience than theatrical.
March 26th, 2008 at 3:56 pm
@Peter, you’re right, and it was a point I wanted to make but couldn’t put into bite-sized words, lol … even accounting for rentals, DVDs, ancillary, etc., movies move more units.
@Matt, you’ve got the right idea, but number of hours won’t be consistent for games. A movie will always be within 90 minutes to 3 hours (few exceptions apply). A video game, though, could take 10 hours to beat or a whole month. Then you’ve got online world games where there’s no ending.
March 26th, 2008 at 3:57 pm
What is the point of this post?
Everyone knows that movies make more money. Why are you defending the film industry for seemingly no reason?
March 26th, 2008 at 4:05 pm
derek: mainstream media apparent doesn’t know, and continues to report this inaccurate and sensational story of how video games will overtake Hollywood. You can’t compare a slice of an orange (hollywood’s box office) to a whole apple (video game sales).
March 26th, 2008 at 4:19 pm
Won’t even enter the discussion on reduced quality (yet), but I won’t cede that point by any means. John did in fact bring up up the cost, so I addressed it.
My beautifully disfigured chart simply points to the fact that video games have shown tremendous growth in recent years and have more room to run in general (especially considering this data, like you suggested with DVDs, includes only one facet of their business, and omits online gaming). It’s not about the death of movies by any means, but they are battling each other for the same attention and entertainment dollars - so video games can’t be dismissed either. NEVER.
March 26th, 2008 at 4:23 pm
@Enrique - online worlds are a problem to account for in general if you’re grouping them into the discussion… there are a TREMENDOUS amount of factors to consider in this worthy discussion, so we have to find similar and constrained boundaries.
March 26th, 2008 at 4:25 pm
I LOVE video games. I’m constantly debating in my head which I like more. Games or movies. I really think I’ve come to the conclusion that Video Games are my favorite choice for media entertainment. I came to this revelation when I decide that I get more excited when a game I’m looking forward comes out then a movie.
However, why do we game fanboys get mad when the truth comes out. Peter didn’t say video games will NEVER be a bigger industry then movies. Just not anytime soon…
He also didn’t say that people don’t enjoy them either. He just said more people do enjoy movies more so then video games. And that the movie industry is a more profitable industry. Maybe one day that will change.
Anyways, I want GTA IV more then seeing Iron Man! :-p
March 26th, 2008 at 4:32 pm
@Jon - he did say “NEVER” actually, but you brought up a more tantalizing point… are movies more “profitable” than games? I’d be fascinated to know if there’s any EA accountants listening in…
March 26th, 2008 at 4:44 pm
I come here as a game-industry defender (tho, I’m totally a movie fanatic.. Besson/Chan Wook Park whore.)
And I have to say, not in 5-10 years time for sure .. but who knows in the future? games are the seed of what you saw in movies as “Matrix” .. do you really think EVERY single person in civilizated-earth isn’t going to get in “simulations” when it become less like a game and more like a true simulation?
You can see this effect already in games that are freedom driven such as Gran Turismo/The Sims/GTA.. or MMOs in general.
A lot of the people playing those games had never played games before… apart from solitaire…
20 years? who knows.
Regarding “now”, if people are willing to pay 60 bucks for a game and in the end the industry makes more money out of it .. would they pay the same for a movie?
March 26th, 2008 at 4:51 pm
let’s keep this discussion on topic… Which medium provides you more entertainment is subjective and off topic. The purpose of this posting was not to say that movies are better than games, it was a statistical and money discussion about how many people and how much money both mefiums make comparibly. Obviously some of the video gamers who have entered the discussion believe games could overtake movies… I’d love to hear how that will happen.
March 26th, 2008 at 5:28 pm
It IS possible, though I certainly don’t wish for it… the point is that movies have yet another competitor (with considerable room to grow) in the struggle for attention and dollars. The market cap of gaming reflects its traditional audience/appeal, but Wii, casual games and virtual worlds are opening gaming to a much greater segment of the population… and their industry will grow accordingly.
Again, I’m not saying that gaming WILL overtake the aggregate movie industry, but simply that the two are playing a zero-sum game along with numerous other media.
March 27th, 2008 at 2:53 am
Movies entertain more people, but the Video Game industry will make more money in due time :P
March 27th, 2008 at 6:27 am
Nice post blocking, nothing like cutting down on folks who dont agree with your poorly reasoned article.
March 27th, 2008 at 8:07 am
The movie industry, in general, will suffer the same fate that the music industry is currently suffering. The gaming industry probably will as well, but since it’s a newer medium of entertainment, it won’t happen as quickly.
This is not to say the movie industry will die, but if you look at the eventual demise of the music major labels (which will happen unless they change their business models), you can compare them to the major movie studios. When movies are continually looked at (not only by the studios, but by the media and fans alike) as gross sales numbers instead of the art and/or entertainment they’re meant to be, it shouldn’t be surprising what the sliding numbers indicate. The decline of the theater experience is a trend that will continue.
Gaming is a factor because most people only have so much time and money to split between their entertainment, but the real problem lies within the industry itself. Movie execs really should be watching what is happening in the music industry as a portent.
March 27th, 2008 at 9:00 am
davenix you’re probably banned right now, good luck with that
March 28th, 2008 at 1:28 pm
Never?
March 28th, 2008 at 3:49 pm
I just got this to say.
People will go see a movie more then 1 time, people are only going go buy a video game one time.
March 28th, 2008 at 3:57 pm
Eric, my best friend bought Super Mario Brothers on NES, he then re bought it as part of the Mario collection on Super NES, and he just repurchased the game in the Wii marketplace… Gamers do buy games more than once, especially when you talk about library titles.
April 1st, 2008 at 10:09 pm
your idea is bullshit…u said video game is never beat movie??? video game only really increase in revenue in seraval years compare to 100 years of movie. what did the movie do in its first years…movie must struggle with theatre…since the colour TV born, the movie domain the theatre completely( now u choose between go to the theatre or stay at home watching a movie u choose??). THe video game is same, it is their intial of developement. one day when the graphic, the gameplay is develope enough (when u watch something and i don’t realise it’s movie or game). one day the movie is goiong to die out (only watch it in the museum)..that’s i call u fucking asshole, go to kill yourself bastard
May 5th, 2008 at 1:44 pm
how much does a typical movie cost to produce and market?
how much revenues can a typical movie make in theatrical release, DVD, VOD, cable, broadcast, merchandise, and publishing licensing?
how much does a typical videogame cost to produce and market?
how much revenues can a typical videogame make in game product release, merchandise, film licensing, and publishing licensing?
it would be interesting to compare movies vs. videogames from the point of view of revenues generated per $ of production and marketing.
May 5th, 2008 at 8:41 pm
fuck u cesar, what movie, music…and all these bullshit did for the damn world. Video game make internet, IT…develope dramatically.Video game is one of most factor in the flat world….hollywood make something so called art..i pissed it off. Art do not make people alive, technology do