Grumpy Gamer on the Great Myth

For a few years now, source after source has claimed that the video game industry is “bigger than Hollywood,” or, more specifically, “delivering more revenue than movies at the box office” Now comes a new San Francisco Chronicle article which casually claims the game industry “generates more revenue than Hollywood” as an accepted fact during an analysis of this year’s blockbuster games.

But just because a lot of people say something doesn’t necessarily make it true. And just because video game software and hardware sales are larger than movie box office receipts doesn’t mean the comparison of the two industries is a fair one.

Yes, if you want to be very specific, you can say that U.S. video game and hardware sales (approx. $10 billion annually) are outpacing U.S. movie box office sales (approx. $9 billion, annually). But extrapolating from this statistic that the game industry is bigger than Hollywood in any significant sense is ludicrous.

The Grumpy Gamer gives a good argument for why in a recent article which breaks down the numbers in a way that should give diehard game advocates pause. Besides the obvious overlooked statistic of VHS and DVD sales and rentals, Grumpy Gamer compares budgets (“A big budget game cost from $15M to $20M to make, double that for marketing. A big budget movie cost $80M to $100M.”), audience sizes (“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?”) and this year’s top grossers (“Shrek 2 — $438,478,000” vs. “Grand Theft Auto: San Andreas — $170,000,000) in both industries to show how ridiculous the comparison is.

Some of his arguments are a little soft, but there are enough hard numbers and quantitative arguments here to cow any lazy writer who tries to put an exclamation point on his big game industry article by saying that it’s “bigger than Hollywood.” Bottom line: be careful when making sweeping statements based on faulty statistics.

2 thoughts on “Grumpy Gamer on the Great Myth

  1. I could be wrong, but I’m honestly at a loss for any time that someone that’s actually IN the Games Industry has made this claim. At least I’ve never seen it. Anyone?

    Even Ron Gilbert himself worded it as “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.”

    So while it is a problem in journalism, I’ve not noticed Games Journalism running with this one. And kudos to them for it.

  2. I could be wrong (too), but I’m pretty sure Ken Kutaragi tosses out that “fact” at every E3 Sony press conference I’ve been to. I’m fairly sure Reggie Fils-Aime mentioned it for Nintendo at E3 as well. But I’m usually at a daze in that week, so I may have just dreamt it up. I dream about extremely boring things, unfortunately.

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