How Come Video Games Are More Profitable Than Hollywood Movies?
Video games come with a distinctive appeal that draws legions of followings. Proving its dominant drawing power, global video game purchases reached a staggering 500 million in 2010. the industry continues to serve one of most lucrative markets with gamers collectively spending 3 billion hours each week playing the said platform.
Investigative findings by the Association of Psychological Science reveal that gaming in general is considered as the ideal platform for players to take on the characteristics of their ideal self. Video games offer gamers the opportunity to play an ideal role or virtually adopt a new identity, bringing about feelings of enjoyment of the massively social and interactive gaming experience and satisfaction at each victory.
A Formidable Industry
In 2008, the video game industry – covering all video games in all video formats – made more money than all Blu-ray and DVD movie releases combined in terms of product sales. Video game sales were at $32 billion, up by 20 per cent from 2007. Hollywood film sales dropped six per cent, fixed at only $29 billion.
A case in point is Grand Theft Auto IV, which became a jaw-dropping success when it broke two entertainment industry records, hauling the biggest sales on a single-day and seven-day basis since its release on April 29, 2008. GTA IV sold 3.6 million copies or $310 million in equivalent sales within the first 24 hours of its availability. On the first week, the sales figures subsequently skyrocketed to over six million units or an equivalent of $500 million.
The GTA IV first-week earnings are comparable to giant movie releases. in a report by Reuters, the British-produced video game has outperformed Harry Potter and the Half-Blood Prince from Warner Bros., which raked in $394 million during its opening week in 2009. GTA IV also beat blockbuster Spider-Man 3 from Sony and Buena Vista’s Pirates of the Caribbean: At World’s End, which earned $382 million and $344 million, respectively, when they opened in cinemas in 2007.
On December 12, 2011, Modern Warfare 3 officially de-throned the number one movie of all time – Avatar, as the fastest entertainment media to reach the $1 billion mark. the former got its first billion dollar earnings 16 days after it was released while the latter for 17 days.
Exemplifying robust international business marketing techniques, video games have also amassed earnings from its European market, decisively pulling the limelight away from the movie industry. Regarded as the most valuable purchased entertainment market, video game sales are four times more than cinema earnings, also trumping music and DVD sales combined.
Shedding light on the phenomenal video game following, UK paper the Guardian notes how video gaming pushes itself to the mainstream consciousness by stimulating the consumer’s intelligence, appealing to their imagination and improving constancy in player involvement – something that Hollywood may not be very successful at.
A Glimpse of the Future
Industry research firm Gartner, Inc. has estimated that in 2011, global spending on the gaming ecosystem will reach over $74 billion, showing an increase of 10.4 per cent from $67 billion in 2010. Key transitions to gaming technology, business and software strategies are predicted to last beyond 2015, and by then, spending will jump to a whopping $112 billion.
The gaming ecosystem covers gaming console manufacturers Nintendo, Sony and Microsoft; software for platforms or game consoles like PlayStation 2 and 3, Wii and Xbox 360; portable consoles Nintendo DS and DSi, Game Boy Advance, and Sony PSP; PC or notebook software; mobile gaming, as well as online and social gaming.
Discussing gaming business and software strategies in general, marketing firm Zebra Partners representative Perrin Kaplan tells Gaming Business Review that gamers will tend to respond to new products, irrespective of how they are being packaged – console, PC, handheld or Internet. with new games mushrooming on various forms of media, the challenge for vendors in the video game industry is to adapt to what insatiable gamers want: to be continuously surprised and interested by a new type of fun and new technology that come with video gaming.