It's That Time of the Year Again

Dec 20, 2004 five to noon

For most people, this is the season of colorfully lit houses lining the streets, a chance to catch up with family, and eggnog roasting on a open fire.  It is the season for giving to others and telling your friends that you care.  It is the season to reach out to the less fortunate and bring a little joy to everyone's life.

For me, this is the season to become horribly annoyed over the yearly assertion by the popular press that the Game Industry is larger than Hollywood.  This preposterous notion was first set forth in 1914 when the thriving Pachinko Machine Industry proudly proclaimed that it was bigger then Hollywood.  It was also the last year that it was really true.

Every season we can count on several of these misplaced stories and I thought it would be a good idea to finally debunk them, ending this Yuletide tradition once and for all.

Let's start with the facts.

The 2004 domestic Video and Computer Game Industry is estimated to be around $10B.  This is a slightly misleading figure because it includes the sales of the console machines, in addition to the sales of the software, but we'll go with it.

The domestic US box office is estimated to be around $9B for 2004, and this is where the myth starts to take life.  The problem is the movie industry is a lot bigger then just the U.S. box office.  DVD sales and rentals for 2003 topped $16B.  VHS sales and rentals for 2003 was $6.4B.  VHS sales are declining fast, but most of that will just shift over to DVDs, which brings the grand total for non-box office movie sales to over $20B, twice the figure for the entire game industry.

Things only get worse when you start to look at the amount of licensing revenue the movie industry makes compared to the game industry, which mostly licensees in, rather than out.

Other things that should be obvious, even without the figures, is if the Game Industry is larger then Hollywood, where is all the wealth?  Why aren't game designers, writer, programmers and artist floating in money like some people in Hollywood are.   Where are all the limousines, the fast parties, the tabloids tracking our falls in and out of rehab.  Where is all the money?

The notion of the Game Industry being bigger then Hollywood is also ridiculous when you look at budgets.  A big budget game cost from $15M to $20M to make, double that for marketing.  A big budget movie cost $80M to $100M.   Something doesn't make sense, and it should only take an ounce of curiosity to realize that the myth just can't be true, or that the economics of the two businesses are so different that it's silly to compare them.

I would also venture that everyone in the U.S watches movies, either in the theater or on DVD or HBO.  Can the same be said for games?  This alone should give the preachers of this myth pause.  Think about it.

It's also interesting to look at 2004 U.S. box office totals and you start to see that we aren't even in the same league as movies when it comes to making money:

Shrek 2 -- $438,478,000  
Spider-Man 2 -- $373.378,000
The Passion of the Christ -- $370.233,000    
Harry Potter -- $249.359,000    
The Incredibles -- $232.573,000

You don't get to under $100M U.S. box office until number 19 on the list,  Remember, this is just the U.S box office for 2004.  This does not includes DVD/VHS sales and rental.

Let's look at the all time box office earners (worldwide):

Titanic (1997) -- $1,835,300,000
The Lord of the Rings: The Return of the King (2003) -- $1,129,219,252
Harry Potter and the Sorcerer's Stone (2001) -- $968,600,000
Star Wars: Episode I - The Phantom Menace (1999) -- $922,379,000
The Lord of the Rings: The Two Towers (2002) -- $921,600,000

That's billions of dollars if you've lost track of the digits on those first two.  Billions.  And that's not adjusted for inflation.

You don't get down below $200,000,000 until number 258 on the list.

Adjusted for inflation, the all-time U.S. box office champs are:

Gone With the Wind (1939) -- $1,240,554,000
Star Wars: Episode IV - A New Hope (1977) -- $1,093,654,300
The Sound of Music (1965) -- $874,430,400
E. T. The Extra-Terrestrial (1982) -- 870,985,600
The Ten Commandments (1956) -- $804,340,000

Interesting.

Now let's look at games sales for 2004:

Grand Theft Auto: San Andreas -- $170,000,000
Halo 2 -- $160,000,000
Madden 2005 -- $120,000,000
Spiderman 2 -- $43,000,000
Fable -- $40,000,000

Looking at the top three on the list, they are very respectable, but it drops fast from there.  Once you get down number 20, we're looking at around $20M in sales, compared to the movies industries $100M at number 20 (again, just for U.S. box-office).

I don't know why it bugs me so much when I hear this myth reiterated time and time again.  Maybe it's because of the strange jealously the Games Industry seems to have with Hollywood.  Maybe it's the fear that one day it really will be true.  Maybe it's the fear that it never will be.

I got to run, I can smell the Eggnog burning...

Other people's comments:

Posted by Stuart F on Dec 20, 2004 five past noon

I think that should be $9B, not $9M, for 2004 domestic box office.

Posted by Ron Gilbert on Dec 20, 2004 ten past noon

Fixed

Posted by Alan on Dec 20, 2004 quarter past one pm

Maybe it's that everyone wants "theirs" to be the "best."

Really, I think it's all just silly. If I were a company making plastic/styrofoam cups, I wouldn't be sad that I wasn't bringing in as much money as a soda company, provided I'm making enough money to survive... Really, it all depends on your goals, I suppose. We, people in general, seem to be fixated on only one goal.

Competition is so deeply rooted into the human psyche. Not many people can be content if there's someone with "more" than them. Instead, they have to keep on pushing. And then, when they finally have the most, they get depressed and weep since there's nothing left to conquer...

Nothing changes.

Oops, I'm starting to get all depressingly theological. I'm ending this now.

Posted by Nacente on Dec 20, 2004 two pm

Titanic made that best???!!!! i didn't thought it was that high.

Posted by AdamW on Dec 20, 2004 ten past two pm

Yup. Titanic was huge; importantly, not just in the normal 'big' Hollywood markets (North America, the U.K. etc) but EVERYWHERE. Every country loved Titanic, it's the biggest grossing movie ever in many, many, many countries.

Posted by Nacente on Dec 20, 2004 twenty five past three pm

Hahaha not me ;) I told myself I wouldn't see it and I haven't seen it :)

Posted by Qslugs on Dec 21, 2004 five past three pm

No kidding. I saw a total of 20 min of boat sinking. thats it. I wouldnt have even went to see it if it weren't being played up like sliced bread.

Posted by AdamW on Dec 21, 2004 ten to seven pm

I didn't say it was GOOD, just POPULAR. Heck, Phantom Menace is on the list too. :)

Posted by seb on Dec 20, 2004 twenty five past two pm

Those numbers are mind-boggling. And to think that half the globe is starving...

Nuts.

Posted by UncleJeet on Dec 20, 2004 twenty five past two pm

Well they wouldn't BE starving if they'd just get up off their lazy behinds and go to the concession stand for some popcorn and junior mints.

Posted by AuntJeet on Dec 21, 2004 twenty five past three pm

haha!

Posted by Tony Marklove on Dec 20, 2004 twenty to three pm

Slightly off topic, but, I have thought for a while now that it would really be much better for consumers (players) and game developers if there was a single standard games console platform. You have touched on one of the many reasons when you mention the number of people who play games compared to those who watch movies.

Even though the total number of game players is lower - and will probably remain lower for a long time, if not forever - the problem is really that unless you own more than a single console, it is not actually possible for you to play the top 2 blockbuster games of this year. You must chose one or the other. I know it's perfectly possible to buy more than one console, but I don't see many non-hardcore game players actaully owning more than 1 (maybe I'm wrong, any information available about that?)

Speaking from a personal perspective, I bought a Gamecube - mainly on the strength of Nintendo's first party games - and although I haven't been tempted to buy either an XBox or PS2,  I certainly would have considered buying GTA:SA and/or Halo 2 if they were available.

I don't want to make this post too long (I think everyone ignores the long ones), but I'm sure you can see the point I'm trying to make. Consumers lose out on some of the big talked about game experiences of the year, and developers wasted time and money porting games (especially since most of the middle-of-the-road games, which haven't been snapped up as exclusives, often appear on all 3 consoles anyway).

I know it's not that likely to happen (it's up to the big 3 console manufacturers), but as a games player who likes to play the best games available, I can dream...


(Oh, and by the way, I do mean an 'open' kind of standard, where multiple manufacturers can make the consoles, to keep competition alive. Perhaps, driven by something similar to the OpenGL ARB, although that has it's faults.)

Posted by Scott Anderson on Dec 20, 2004 four pm

We could end up in a situation where we have one console, although I seriously doubt we would have an open standard.  Basically, Nintendo would have to drop out of hardware, and Sony and Microsoft would have to have some kind of deal where Microsoft develops the software (OS, directx, etc.) and Sony builds the hardware. Either that or Microsoft drops out as well, and the one "standard" console is completely controlled by Sony.

Posted by Tony Marklove on Dec 20, 2004 five past six pm

Yeah, I know it's not really likely to happen. I'm not exactly sure how the console manufacturers make all their money (a lot comes from licensing games on their system, as far as I know), or whether it would be possible to keep this cash incentive in place with a more open standard. I think you have to pay royalties to the 'DVD Forum' when producing DVDs, for example.

If Sony, for example, were left as the only major player, I don't think that would be great for consumers or developers in the long run. You get into a monopoly situation. Although, it would allow everyone to buy any game they want, in the short term.

Not to say that PCs are a great technical model for consoles to follow (every player owning a different hardware configuration is not ideal for an entertainment device), but I wonder how it came to be that IBM's x86 architecture is available to companies like AMD to produce competing chips. Couldn't something similar work in the console world.

Finally, I believe when the 3do console was launched, the idea was to set a 'standard' which electronics manufacturers could implement. Maybe the fact that the 3do was such a failure has discouraged anyone from tying again. But, I think 3do's biggest problem was that they tried to create a standard that competed against the prevailing consoles, rather than getting all the big players to agree.

Blah, anyway I only dream for a better gaming world(tm).  :)

Posted by ravuya on Dec 21, 2004 five to midnight

The NUON tried the "We'll license our standard technology to electronics types; go build a system". It didn't go either, although I must admit the hardware kicked the hell out of the 3DO.

Posted by Grab on Dec 22, 2004 twenty to six am

AMD got the x86 architecture through reverse-engineering and making it through many lawsuits on the winning side after many dirty tactics from Intel (NOT IBM - Intel owned the x86 design, IBM just used the chips).

PCs are a great technical model, but not if you want the cheapest commodity hardware.  What PCs bring is hardware abstraction layers like DirectX or OpenGL.  Whilst these layers slow things down a bit, they make up for it by being able to run games on any hardware for years.  By contrast, you upgrade your console, your old games are coasters.

The problem is that someone needs to keep working on the next generation of console, and decide what that's going to look like.  This simply isn't an issue on PCs - you just assume Moore's Law on graphics capabilities and work with that, and new cards will just work with your game.

Grab.

Posted by Tony Marklove on Dec 22, 2004 ten to ten am

Yep, my mistake. IBM was just a typo, I meant Intel, of course.

Thanks for the other details. So, AMD, and the like, had to battle through lawsuits to be allowed to produce x86 chips. That is interesting, I wasn't sure about how that happened.

I guess it would still be possible to license a single chip design for use in an agreed standard. I think I remember seeing stories about PowerPC being licensed for different projects, for example.

I also assume it would be possible to design the rest of the system so that various manufacturers could create components that work without the need for much of an abstraction layer. I know that the XBox can contain hard drives, and DVD drives from different manufacturers, for example, but I'm not really sure how that all works.

Posted by Jeffool on Dec 22, 2004 ten past one am

Just my opinion, but imagine if television signal hadn't become a single standard.  Do you think people would buy multiple TVs for multiple programming?  One for RCA channels, because they're fewer, but lower quality.  Another from it's large choice, even if the sound and video aren't as sharp.  And a third for their children?  Insanity.  The largest problem with this is that Gaming standards change much faster than video standards have thus far, but even they're quickening with the rush to the HD-DVD/Blu Ray wars.  So every four/five years you'd need developers and publishers (herein Devs/Pubs, because I'm lazy,) to agree on a single 'lowest common denominator' standard for the next series of Video Game Players.  (VGPs, or just GPs.  Something nifty like "VCR" and "DVD player".)

The only way I can see a single standard starting is for the Devs/Pubs to agree to only support one open platform and alienate current hardware manufacturers.  Then they would no longer have to pay for licensing rights for three different consoles, and they wouldn't have to worry about porting.  And hopefully backwards compatibility would stay intact by introduction of new commands instead of replacing old (or DLLs and flags in game code to tell which generation the game belongs to,) as opposed to having to recompile the games, or include old hardware in newer GPs, or even emulate the old software.  Of course even then every so often a major technological may change the big picture and ruin all backwards compatibility, but you can't predict when that will happen.  Then rather than having a Sony Playstation, anyone could go out and buy their favorite brand of GP.  Samsung, Thomson, RCA, Sony, whoever.  Any hardware manufacturer would have to clear their device with the standards board in order to cary the "GP level A" compliance tag.  And later iterations would be level B, C, etc, and higher level players would player all lower level games.  But, I'm just some chump dreaming here.  Devs/Pubs would never do that, even though other hardware manufacturers would likely jump at the chance to establish brand loyalty in an entirely new product.

Posted by Sam Tolton on Dec 22, 2004 five to two am

The only trouble is that 3 of the biggest Devs/Pubs are Sony, Microsoft and Nintendo...

Posted by Jeffool on Dec 22, 2004 half past two am

I shed a tear at the truthfulness of your post.
}.u (   <-Me, shedding a tear, circa 1979.

Though if Microsoft is losing money on hardware...  And they're primarily known for software...  Nah, nevermind.  Just a dream anyway.

Posted by Tony Marklove on Dec 22, 2004 twenty to ten am

Yes, Jeffool has expressed much the same idea as I imagine.

Yes, someone would have to decide on a single 'lowest common denominator' standard. I would hope (although I'm not sure how feasible it would be,) that it could have some sort of continuous cycle of upgrades, where the technology geeks could always buy the latest and greatest console for faster frame rates etc. Then, like you mention, when a new "GP level" needs to be established to contain a new generation of games, the common featues from those advanced systems could be chosen as the new base capabilities. (I hope that makes some sense.)

You mention that "Devs/Pubs woudl never [alienate curent hardware manufacturers]," and that's probably true, which is why I think the only way for a whole plan like this to work would be to get nearly every developer, publisher, and manufacurer to agree to make a single large step all at once. I fear that would be almost impossible.

Posted by UncleJeet on Dec 20, 2004 four pm

We have that, it's just called a PC - and the console sales kill it.  :(

Posted by Brendan on Dec 21, 2004 five to one pm

The PC can be a fine machine for gaming... but not always.

For many developers, developing for the console is far easier than it is for the PC. Why? Easy, it?s not a moving or wide ranging target, it?s a rigidly defined system that does not change over time the way a PC does.

Posted by Lowell on Dec 20, 2004 twenty five to six pm

One console would cause other problems (monopolllyyyyy). Plus UncleJeet is right.

Posted by mike d on Dec 21, 2004 six am

Jeet: That's just because a PC if friggin hard to use, and playing high tech games on them is even harder.

Lowell: Well, one console is very different from one standard. and it should be obvious that if you commoditize consoles, you're going to create more demand for games. Microsoft and Sony half-assedly tried to do this when they were selling their consoles at a loss.. though they're in a weird predicament where they don't want to go all the way, cause then they lose licensing fees and whatever (if they think they can get a monoply by doing it the current way, they'll damn well try)..

I mean, that was pretty much Sony's plan to victory before, just in reverse. they commoditized games by lowering the quality barrier, and using CDs. and it worked.

Posted by Chris on Dec 21, 2004 twenty to one pm

I've known 4 years olds that play computer games.  They aren't that hard.  The controls are better than consoles and the gameplay is better.  And with the prices for a decent system constantly coming down, I think a lot more people will consider skipping consoles.

Posted by Ben Tilly on Dec 21, 2004 twenty past five pm

Correction: Sega (briefly) and Microsoft sold their consoles for a loss.  Sony has always sold their console at a profit.

http://www.actsofgord.com/Proclamations/chapter02.html gives the basic story.

Posted by Redwall on Dec 20, 2004 twenty five past six pm

One console to play all games -> Phantom. :)

Posted by modgeulator on Dec 20, 2004 half past seven pm

Yeah, the video game industry isn't as big as hollywood, but it's gaining on it at an alarming pace.
I know exactly how this makes me feel: dissapointed. Dissapointed with the games coming out of an industry that is already too big and scared that we will never get to see video games evolve into their full potential.
Just imagine if movies had been born into the kind of repressive corporate world we live in today. One where the risks are too high to be able to try anything new or innovative. What do you imagine movies would look like today? If losses were unacceptable then every film would have to be a guaranteed success. What would be the easiest way to guarantee success? Take stage shows that were already successful and make film versions of them. The simplest and most obvious way to do this would be to film with a single camera from the "best seat in the house." Would any director dare even using multiple camera angles or would they be afraid of confusing and alienating their audience by doing so? Would movies ever be anything more than a poor man's substitute for theatre?
And what do games developers have to do today? Can they get away with taking real risks and making real innovations? I remember playing Monkey Island when I was about 10 or so and it just blew me away. It opened my eyes to what a computer game could really be. It could be a narrative experience as good as a film or book that could completely immerse and involve the player in ways no other format can. But that hasn't been the way the industry has evolved at all and here we are today with our sports and violent action games: the video game equivalents of those stage show film versions.

OK, I just read what I wrote and it sounds a little too harsh. I don't really hate action or sports games, I just grew up looking forward to something a lot deeper and more interesting from my video games then what we have today.

Posted by UncleJeet on Dec 20, 2004 quarter past eight pm

Movies were born into a repressive corporate world.  The old Hollywood studio system was pretty brutal, and there wasn't a whole lot of room for experimentation and innovation.  It would happen on occassion though, and then new films would incorporate the good things.  It wasn't until the old studio system collapsed that we started to see the really out there experimental stuff be commercially produced.  Sadly, things have grown back to being just as oppressive as they were, but without the structure and assembly-line type production of movies, it's worse than it was back then.  Movies are so expensive now, very little risks are taken by any major studio, and so we end up one step forward, two steps back, so to speak.

Games just went from freeform guy-in-a-garage to the corporate dollar driven, marketing department dictated type of environment it is now, without ever having gone through a good building period like the old Hollywood studio system.  That really laid the ground work for future films to build off of while also establishing the cinema as both a valid artform and a commercially viable product.

Posted by Ron Gilbert on Dec 20, 2004 twenty past nine pm

You should read Easy Riders, Raging Bulls: How the Sex-Drugs-and-Rock 'N' Roll Generation Saved Hollywood.  It's a very interesting account of the transformation that Hollywood went though in the late 60's and 70's.   The game industry needs a "Easy Rider" to change the way everyone thinks about who really wants to be buying games and what makes a successful game.  

I don't want to draw to close of an analogy, a lot is different, but something has to change in this business.

Posted by UncleJeet on Dec 21, 2004 quarter to two am

I agree, and it will happen.  It's just going to have to be a "bolt out of the blue" game that comes in completely under the radar, made by a small team with a very limited budget that has loads of talent and vision.  (Which, of course, is something about as common as rainbows and moon ponies and tiny leprechans with giant pots of beer.)  The biggest hurdle, in my opinion, is art.  We could get The Standardized Engine Of +3 Wonderfulness tomorrow that can make any game and is easy enough for a even a PR rep or a lawyer to use - but the hard part is always going to be getting the artists.  So much depends on the art today, and there's just no way to make push-button graphics that materialize through some sequence of code.  You can fake decent code - you can't fake good art.

Also, I long for the day when some type of control is exerted by the designer(s) over the presentation of the narrative.  In film, editing is really the most important part in the entire process and can make or break a movie.  In gaming, there is little to no attention paid to cuts, camera work, narrative flow, etc...  I realize that there's a big problem there, what with the player being the one who is supposed to be dictating the flow of the narrative - but there has got to be some middle ground that will allow for both - a sort of player dictated progression through a designer mandated presentation.  Or something.  I think I'm talking out of my ass.

Posted by Danila Medvedev on Dec 22, 2004 quarter past eight am

Eventually there will be standard "art packs" as well. Just as there are already sound and texture libraries, but better. Much better, actually, as most of the game creative assets can be generated procedurally. Why waste money on motion capture when a system like Endorphin can do everything faster, cheaper and even in realtime? Why waste money on creating your own textures, when there is a huge library of procedural textures resembling every material in the world? Why waste money on designing character models, when you can just enter a few parameters and have a complete model generated automatically (like in Sims 2, but better)? This wasn't already done, because it haven't became feasible until now (or until few years in the future, actually). But when this happens, game development costs would decrease significantly, allowing smaller teams to work on creative independent games, but also allowing big developers to do much more using the same budget.

Posted by Marek on Dec 23, 2004 ten past two pm

Well there's already the libraries of 3D models that you can license for things like trees and foilage, so you're probably right. A lot of games use the same art package for that, but I've forgot the name. Though let's hope things don't get all standardized. I'm already occasionally frustrated by sound libraries. How often have we not heard the cheap-action-movie electrical jolt sound (a.k.a. the Tesla-coil from Command & Conquer) or the only futuristic door sound that seems to exist (a.k.a. the door from Doom)?

Posted by Paul Herzberg on Dec 22, 2004 eight am

I think it needs to go through a '30s and '40s. First, learn how to make Stagecoach or Casablanca or, heaven forbid, a musical. You want Scorcese, I think what's needed is a Hawks.

Posted by Sergio on Dec 20, 2004 twenty to ten pm

What I would actually want to see compared is units sold, i.e. number of games sold versus number of movie tickets. I think the difference would be even greater when one considers the price of each. Even most DVDs cost less than a game.

Perhaps one day games will be as big as movies. The budgets will be similar, the number of units sold are similar, but more importantly, their prices are similar, i.e. $20 games. (Yes, I know there are a few games that already cost $20.)

Posted by Paul Herzberg on Dec 21, 2004 eight am

Surely computer games are more like TV series' than movies.

It takes, say, 10 or so hours to get through the shortest story driven game (Beyond Good & Evil for example) that means you should have content enough to get you through, roughly, a Friends Boxset rather than a 2 hour movie.

Plus TV is more of a Producer's medium, isn't it? You come up with a concept and get together a team to sustain that idea over a season's worth of enterainment. Each season you have to make a new version of the same concept that's similar enough to not put off your old viewers, while being different enough to justify it existing at all.

I'm sure there are more analogies... You might get the occassional Joss Whedon or David Chase, but mostly what you're going to get is Don Bellisario, or worse.

Posted by PaG on Dec 21, 2004 ten past eight am

The "Gaming is bigger than Hollywood" statistic is even worse when you think about its scope: it is comparing worldwide videogame sale with box office results of movies in the US only.  Contrary to popular belief, people actually watch movies outside of the United States so that would completely invalidate the original claim.

Also, games cost way too much. Hit games cost as much to buy as at least 3 hit DVDs, books or CDs -- there's no way we'll reach the mainstream with prices like that. Instead of ranting any longer here, I'll just point you to an article I wrote on the subject here.

Posted by Tony Hsieh on Dec 21, 2004 quarter past eight am

The money in the computer game industry will never be in the same league as movies for the simple reason that there is that stink of technology obsolescence built right into every single game.

I just paid 300 bucks for the complete (and original) ~40 year old TV series (please don't ask which one).    That goes right into the company coffers for no additional work - save interviewing about 7 geratic actors which 5 of them are out of work anyways.

I will barely pay half the price for a 1 year old game; let alone 10 or 40 year old game.

Posted by Someone on Mar 23, 2006 twenty five to seven pm

well that sucks for you save ur money and buy a new outfit so you can go out on a date insteadc of buying a $300 thing. stupid.....

Posted by JP on Dec 21, 2004 twenty five past eight am

Even if videogames actually ARE "bigger than Hollywood", it doesn't change the fact that they are largely a marketing pseudopod of the film, music and other entertainment industries.

This has happened because game developers have not sufficiently capitalized on the unique strengths of their medium.  Videogames are little more than crappy movies because developers don't sufficiently understand interactive design.

Posted by mariano on Dec 21, 2004 five past noon

intresting comparision; but what about the yearly industry growth?
i mean, in the last 10 years the Total BoxOffice grew less than 100%; What about videogames industry?
And, how do you take into account the role of online gaming communities where you have people paying a monthly fee to play? I mean, i am sure that lineage, lineage2, WOW, Sims Online, etc get some money at the end of the fiscal year.

BTW, sorry my english ;)

Posted by cdguru on Dec 21, 2004 quarter past two pm

The different between games and movies is, well, absolute.

Movies, especially the bad ones, are made with a "formula" - script & actors in one end and money comes out the other.  Most of the time you get your investment back.  Sometimes you make lots more.  Games are much riskier, with the number of flops far, far outnumbering the successes.  And, a just-so game doesn't bring in the cost to make it.  Until that changes, games will always lag behind.

The "formula" game isn't going to happen as long as console games are hardware-constrained and PC games have to put up with the lowest common denominator.  A lot of the "work" in a game is getting to operate decently on crappy hardware.  Console games are the worst, with everyone pushing the limits and the game companies pushing for more, more, more, quicker, quicker, quicker.  So, you will never have a "winner" game that doesn't push the hardware's limits.

Posted by TWE on Dec 21, 2004 half past four pm

Where are the limousines?

Well, most of the large game companies are incorporated.  You have to look up the corporate chain.  Most of the larger companies have their marketing teams paid more than the developers.  It makes sense to pay folks that can sell a product someone worked their ass off on, right?

The board of directors and top executives get free chunks of stock options and low cost and high salaries, as well.  They play an important role with issues such as: warehousing, distribution, taxes, acquisition, company direction, human resources, etc...

As a designer, programmer, artist...  unless you've founded a company in a past and/or made a couple hit games, you're a scrub.  It doesn't matter what your seniority is.  You don't have the bargaining power such as someone who is in the eye of the public (such as directors, actors, producers, etc in movies).  You work behind the scenes and you are not valuable enough for a high paying job.  This is due to a large amount of potential workforce in the market.  Luckily, if you are in the industry and get a few years under your belt, you've got a pretty good resume, but hardly any leverage to squeeze more dollars into your salary at the interview table.

Posted by galiel on Dec 21, 2004 five past five pm

This is a slightly misleading figure because it includes the sales of the console machines, in addition to the sales of the software, but we'll go with it.

"Slightly misleading?" The $10 billion inflates the actual game sales by more than FORTY PERCENT.

US computer and video game software sales in 2003 were $7 billion, according to the ESA.

Sergio said:

What I would actually want to see compared is units sold, i.e. number of games sold versus number of movie tickets.

Ask, and ye shall receive:

Total units sold in 2003, computer and video games combined, were 239.3 million, according to the ESA.

A total of nine console games exceeded one million units. 83 sold more than 250,000. The ESA doesn't mention computer game figures, because the numbers are so small by comparison (52.0M units vs 186.4M for videogames, $1.2B revenue vs $5.8B for videogames - a ratio differential, incidentally, that reveals that many, many computer game sales are from the bargain bins, not the $50 hits).

Number of movie tickets sold in 2003? 1.5 BILLION. With a B. According to a recent study by Exhibitor Relations as reported by CNN. That is just movie theater tickets.

As "big" as? I don't think so.

Posted by Sergio on Dec 22, 2004 twenty five past three pm

Thanks for the numbers. The popularity of both games and movies is better measured by the number of people enjoying each, and not the amount of money each one rakes in respectively, especially when video games is a far more expensive hobby.

Posted by Vicious on Dec 21, 2004 ten past five pm

Games have become so similar to movies, and claim so often to be as captivating storywise and otherwise, that everyone who loves games wants it to be so, but it isnt so. at least not yet. One thing that the grumpy gamer cant deny is the general trend that the revenue of games is on the rise on a yearly basis. maybe some day itll be on the same level as hollywood revenue-wise. Then everyone can shut up about it. Who knows, maybe by then no one will give two shits.

Posted by AdamW on Dec 21, 2004 quarter to seven pm

Tony Hsieh - with respect...that's rubbish. LucasArts still sell plenty of copies of their old adventure games (even though they hardly work on recent versions of Windows), bundled up in various packs. id sold quite a few copies of the Doom collector's edition that was released prior to Doom 3. Someone built a C64 system into a joystick and sold it on the QVC channel - it was one of their biggest sellers immediately. A similar idea was done for the NES by a company in China, building an NES and a bunch of original games into an N64-style joystick...they sorta overlooked getting licensed by Nintendo so they were rapidly busted everywhere they tried to sell them (west coast America, mostly) but before that happened they sold bucketloads (there was a stall selling them in a local mall here in Vancouver, I watched it for a couple of hours, they sold tons). The licensed NES Classic games for the Game Boy Advance sell very well at full price, even though the market for GBA is mostly young kids (so either even people who didn't play the games the first time around like them, or the comparatively few people who played 'em first time around and own a GBA now REALLY love them). New projects reviving old consoles seem to pop up all the time - there was another one for old Atari consoles announced just yesterday.

There's a big market for game nostalgia, and I think it'll only get better. It's also silly to suggest there's no issue of technological obsolescene for films - Citizen Kane was filmed in black and white with mono sound, after all!

Posted by scapin on Dec 22, 2004 twenty five to four pm

I don't believe Grumpy Gamer is in a position to comment on the Myth one way or the other. He doesn't really have any solid arguments and there are a few glaring problems with the ones he does have.

1.

    I would also venture that everyone in the U.S watches movies, either in the theater or on DVD or HBO. Can the same be said for games? This alone should give the preachers of this myth pause. Think about it.



Yes, there are more people that watch movies than play games. But what is the average price for a video game? ~50$? What is the average price for a movie? 8$? 10$ in the city? Now, how much does it cost to create a blockbuster movie? 100mil? How much does it cost to create a blockbuster game? 10mil? The profit margins are much larger in the game world.

2.

    Things only get worse when you start to look at the amount of licensing revenue the movie industry makes compared to the game industry, which mostly licensees in, rather than out.



Again...I just don't know how to respond to this. He doesn't provide any figures to back up his licensing claim or to justify why its larger than the games industry. Games are being turned into movies every day. Not to mention the t-shirts, toys, books, etc.. that are made based on games.

3.

    DVD sales and rentals for 2003 topped $16B. VHS sales and rentals for 2003 was $6.4B.



Where are your numbers for game rentals? Where are these numbers from? Game rentals cost more than video rentals the last time I checked my local blockbuster.

My point here isn't to say Grump is wrong. But if you plan on debunking a myth you had better cover your bases. The article just seems kinda half assed to me.

Posted by AdamW on Dec 22, 2004 seven pm

"Games are being turned into movies every day. Not to mention the t-shirts, toys, books, etc.. that are made based on games."

A lot more movies are turned into games than games are turned into movies. I find it extremely hard to believe that game-based t-shirts, toys and books sell more than film-based ones. Are you honestly saying you think this is the case?

Posted by Karlenea on Feb 14, 2005 quarter past three pm

Ok here's my 2 cents. As a software buyer in Australia for 8 years here are my thoughts....

The developers who create these games come up with these amazing new games that are carbon copies of old games with some "new" feature. Do you have any idea how many games have been pitched to me as "just like Doom", based on the "Half Life engine", blah blah blah. And in Australia these rubbish titles are sold for $89-$99 usually so why would a gamer who spent $99 last week on a disappointing title run back out to buy the "new and inproved" version?
At least consoles games can be resold, PC games - forget it and getting on to work on every machine - forget. If you don't understand the basic workings of a PC forget trying to "tweek" your latest greatest game to work effectively. Has anyone even seen the requirements to run Doom 3? OMG - it's crazy. To think that the average consumer has the knowledge, money or interest to put together a machine that will run some of this junk is ridiculous.

So in come the consoles, and for the record - Sony has sold hardware at a loss (perhaps not in this country but elsewhere yes) - when new consoles come out or the competitors drop their price don't think that Sony doesn't follow suit and somehow lose some revenue in the process. However Sony has a unique position where Playstation can actually be used a tax write off if it underperforms (you forget how big Sony is), which by the way so can Microsoft. Hence the reason Sega went out of business and Nintendo is flailing. Nothing to offset the costs of selling the consoles.

So onto the reason as to why there will never be just one console. And there almost was.... Nintendo and Sony originally partnered together to make the Playstation however due to the fact that Sony has a CD pressing plant (courtesy of Sony Music) they wanted the make the machine CD based. Nintendo in their undying commitment to the cartridge put their foot down and said no - long rumored to be Nintendo's own fears of Sony eventually pushing them out so by holding the manuafacturing of carts Sony would be stuck with Nintendo regardless. Sony obviously thought better of the situation and pulled the agreed upon console to create what we now know as Playstation. Nintendo went on to create N64. So Microsoft, why did they create X Box? I already told you - tax writeoff.
Now why can't publishers write games that will come out on all systems at the same time. Well, the programing for each console is very different and certain titles are licensed to certain publishers. Can you seriously imagine Nintendo giving up Zelda or Mario? Or Sega without Sonic (well obviously with no console they had to do something). Or Sony giving up Crash? (although goodness knows why they put so much into that ugly little creature). It's simple - every company needs a mascot and these guys are no exception.

Finally, if after the realization that the Computer Games Industry is as big as Hollywood wouldn't we be inundated with TV shows like Extra, E!, Entertainment Tonight, etc. for our industry? No! Why? People have a precoceived notion that all gamers are either fat and ugly or skinny nerds who have no life outside of their computer so you will never see one of "us" in a magazine and if you do it's usually some freak dressed up as some obscure game character at a SCI-FI meet or BS hollywood party to coincide with the movie. I mean who wants to see a bunch of fat, ugly chicks or skinny nerds talking about computer games? The world hasn't caught onto the fact that we are not like that anymore - we have evolved. If you don't believe me go to G4 tech TV's website and look at the cast bios - they are either highly educated or actors - the "video game" aspect is written for them. Perhaps a few actually like games and do play them but in reality most of them are just reading scripts probably written by the publishers/developers/marketing teams.

It's all smoke and mirrors - if the people who ran or promoted this industry did their homework and started looking at the people who actually keep them in business, they might have a future. Most of us who have worked on the tail end of the industry (ie the one's SELLING the comsoles and games) get nothing. Eventhough we know better than the suits in the offices of the pub/dev/marketing teams what the consumers REALLY want.

And it's not to be sold out to Hollywood so they can convert our beloved game into some big hollywood blockbuster featuring Mila Jovovich.

Posted by on May 2, 2005 half past midnight

I think it makes perfect sense that the video games industry has outgrown Hollywood. I'm not talking about in actual fact, but about an imature industry that needs money to grow so it can stabilize and actually begin to show solid profit. So naturally everyone in the industry will say they are HUGE and are growing even more. Investors like to hear that, magazines like to write that and morons like to believe everything they hear.

Posted by SephirothX on May 15, 2005 ten past four pm

Your stats are a little misleading.

Halo 2 made $125,000,000 in its first day on the market alone. Dont tell me it hasnt raked more then $35,000,000 in the 7 months after its release date.

Posted by Kruton on May 20, 2005 twenty five to noon

I know this is months after the fact, but it seems to me that you are leaving out a big factor for the video game industry: online, pay-per-month games such as Everquest or Ultima Online.

For those of you who don't know much about this, these are games that you pay a monthly fee (which was $10 six or seven years ago but now is anywhere between $12-20).  Ultima has sold over 1.5 million copies and has consistently had at least 100,000 subscribers at a time over the last 6 or 7 years, and that's still a low estimate.  With some simple math, at $10 a month thats $12 million a year, and like I said, that was a few years ago whereas it is now more expensive to play.  I actually knew people in Ultima who made a living by playing the game: harvesting items in the game and then selling them on ebay.  People like that don't just have one account, but many times have 3 or 4.  Now add in World of Warcraft, Everquest 1 and 2, Ultima Online and a newer online version, Lineage 2, and Final Fantasy 11 Online, all of which I am 99% confident have over a hundred thousand active subscribers and are charging around $15 a month to play.  Granted, not all people who play the online games actually buy the online games because they can get access to the games directly from the companies, so that is probably why they aren't showing up on your top 5 games release.   The Sims is the highest selling PC game of all time and has sold over 8 million copies, although it doesn't charge monthly (as far as I know).

And now for someone who said that comparing the video games to Hollywood isn't fair because Hollywood is just in the US and the video games were all over the world, this is true but doesn't make the point clear.  Hollywood is the biggest part of the world movie industry and the movie industry is biggest in the US.  Video games in the US are not as big as they are in other countries where there are usually more sales and incredible amounts of merchandising.  Large portions of Asian cultures revolve around video games and merchandising.  Many Asians will buy lots of less-popular games instead of just buying every major hit, whereas Americans usually aren't going to spend their money on a game unless they know its good.  Korea has cable channels, not just one, where they air video game tournaments between everyone from the minor players working their way up the ladder to the top players in the country.  Ask an average Korean which celebrity he or she thinks of as the most well known, and he or she will probably answer with one of the announcers or commentators of the cable tournament channels.  I don't even want to get into their video cafes.

Anyway, you may still be right in that the movie industry is bigger than the game industry, but there is a lot of information you are leaving out.

Posted by Kruton on May 20, 2005 ten to noon

I failed to make a couple comments and realizations.  I had assumed from reading another comment that this debate somewhat included the foreign market, but after re-reading the initial post, I see it is only about the US.  You're figure about the game industry making $10 billion in the US is correct.  The figure about GTA making $170M seems a little low to me as they sold 5.1M units, which at $50 a game is more like $255M, but that's no big deal.  There are some good facts here http://biz.gamedaily.com/features.asp?article_id=8735�ion=feature&email=
including one that states that the top 10 video games' sales in the US account for 15% of the market, which makes sense.
More importantly, everything I said about online games is completely relavent because it is not including in this $10B figure.  You can decide whether you think it should be or not, but if you are going to count movie ticket sales along with DVD sales, then you shouldn't just be counting video game sales.  Also, the $10B figure contains console sales as you said, but it does NOT contain PC sales, which would get into games like Ultima and such.

Posted by Alfonso on May 25, 2005 ten to ten am

Hum.... world wide figures are useless in this debate. The gaming industry earnings are only for US.  I'm sure world wide figures would go as high as some top movies (asians are quite the gaming addicts and asians are 1 third of world population) so the billion sales of titanic, LOTR, etc, are pointless here.

I agree with Kruton when he says you are not taking into consideration lots of money the gaming industry (consoles, hand helds, pc) generates and I do not believe that gaming industry earning more than movie industry is so easily discarded or frown upon.

Posted by Alfonso on May 25, 2005 five to ten am

oh, and btw, �where are the limousines and blah blah blah?  

MICROSOFT and SONY.

Do those names being to answer that question?

One of the wealthiest men of all times decided to go for the gaming industry instead of the movie industry.  Enough said about the gaming industry's money making power

Posted by Gank on Jun 1, 2005 ten past two pm

Bill Gates owns 18% of Dreamworks, which he bought in 1995 for half a billion dollars (back when Microsoft was only the #7 game publisher in the world). So it wasn't like he ever made a choice of games over movies.

As for where the limousines are, I think Ron's point wasn't about whether money can be made in games. It was about how over-hyped the game industry revenue is compared to the movie industry.

Posted by rob thomas on Jun 1, 2005 ten past ten am

How much money does Hollywood spend making the movie ?

Posted by Oded Sharon - Buy A Car For Ron Gilbert on Oct 8, 2005 twenty five past four am

Following an article in the and an Israeli business newspaper The Marker, which was about Blizzard's VP being Israeli, I had a long argument with one of the AISeek founders, about the game industry being bigger then hollywood.<br>
The article quotes these two figures:
The value of the global game market (software and hardware) : 33 Billion dollars
Global Sales in game software : 18 Billion dollars.
My friend insisted that in 2002 the game market values were above hollywood !
I refused to belive that and showed him this post of yours. He still kept arguing, with one claim in mind :
Word of warcraft has 3 million subscripers, and if you do the math, 3Million X 30$ per package = 90Million dollars. Then about 6 months X 10$ subscription per subscriber = 120Million dollars.
so it' 210Million dollard for a single game.

What does it mean ?
I can assume it might mean that the Game industry might be bigger the hollywood, but not individual games.
Unlike movies, it's very hard to reuse game's technology for another game.
EA does it all the time !
Hack, LucasArts did it with SCUMM !!!
so it reduces costs to make new games which are just small variaitions of older ones, and as a result there are far more games to be sold.
Far more small budgeted, crappy games, but lots. Perhaps even cellular games might be in that category !

Am I making sense ?

Can games actuallty be bigger then  hollywood ?
Not individually, but as a whole ?
If that's the case, maybe you should also count public access television into hollywood's market...

Posted by unanuis on Mar 23, 2006 twenty five past six pm

you people are idiots who cares GET OVER IT RETARDS get a freakin life

Posted by unanamous on Mar 23, 2006 half past six pm

ignore miss "unanuis" up there please!..shes the retard/fruitcake

Posted by unanuis on Mar 23, 2006 half past six pm

ummmmmmmmm why do u care so much do you people live with your mothers move out there is a world out there, those people you talk to online exist try and fing one instead frying your eyeballs with a computer screen

Posted by unanuis on Mar 23, 2006 half past six pm

please igore miss no-it-all unanamous up there she is even stupider, still take my advice you computer lovers and GET A LIFE

Posted by icelover on Mar 23, 2006 twenty five to seven pm

at least i wasnt willing to be the facial hair on someone's jello-y, green face.

Posted by unanuis on Mar 23, 2006 twenty to seven pm

well at least i dont love some stupid make you wait forever guy named KYLE who is very pimplly maybe he shoud put different type of green stuff know as

Posted by Someone on Mar 23, 2006 quarter to seven pm

i dont really get that

he didnt make me wait forever

hes clearing up

end of story

haha

Posted by unanuis on Mar 23, 2006 quarter to seven pm

facial cream aka acid peel

Posted by Someone on Mar 23, 2006 quarter to seven pm

omg dont let him get on there and see what you said about his face


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