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June 13 2008

Are Video Games Preparing To Become The Number 1 Entertainment Industry?

GTA IVAccording to The NPD Group, Grand Theft Auto IV from Rockstar Games, sold 6 million copies in its first week of release.  At a retail price of $59.99, that puts the gross sales of $359,000,000 in one week.

I decided it would be interesting to take a look at the top grossing domestic films to see where this would be on the list if it was a movie.  According to the list on Box Office Mojo, this would place it just $2 million ahead of 12th place, Jurassic Park.  For all of 2007, the movie industry grossed $9.6 billion, and so far this year, the video game industry has grossed $6.6 billion, on track to top somewhere between $21 and $23 billion.

So, are we looking at the gaming industry doing nothing but growing?  The film industry has been suffering from diminishing ticket sales, and as readers of this blog know, I feel it’s from a severe lack of fresh material.  True, video games do get the bonus of being virtual, so they can create the most fantastical settings they want with no extra cost in “building”, but their stories are also fresher.  I’m not a fan of the GTA series, but from what I know of them, people do enjoy the storylines of building your way to being a top criminal.

You also have to look at a value for money when it comes to what is going on with films.  According to the National Association of Theater Owners, the average price for a movie ticket in the USA in 2007 was $6.88.  A movie averages 90-minutes in length, meaning you spend approximately $.08 a minute for the movie.  GTA IV costs $59.99 for a reported 40-hours of game play, which works out to around $.02 a minute.  I know this is a highly simplistic way to look at it, but you also add in the cost of gas to go to the theater, snacks, wasted time in a theater, popping in a video game starts to look a lot more appealing.

Several years ago I went to a conference of video retailers, and I heard something that stuck with me like nothing else I had ever heard at a conference: “We aren’t in just a battle for their entertainment dollar, we’re in a battle for their disposable time.”  If someone is spending 40 hours playing GTA IV, that is 40 hours not watching TV or going to movies.  If anyone in the entertainment field starts to wonder about diminishing funds, I think we’ve found your culprit.



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