If you’ve ever wondered why video games make more money than box office movies, you are not alone. This question has plagued Hollywood for years, but with Gravity giving 3-D and IMAX a chance, the situation could get worse. While a movie like Gravity will help people appreciate the new medium, the overall domestic box office is flat since 2009. Moreover, a new industry called e-sports has emerged, generating billions of dollars in annual revenue. It has even attracted investors such as Andy Miller, co-owner of the NBA’s Sacramento Kings.
A recent study by the Entertainment Software Association shows that video games generate more revenue than movies. In 2016, the video game industry generated $30.4 billion in U.S. revenue, compared to $11.6 billion from movies. Even home entertainment sales of DVDs, Blu-rays, and downloads cannot close the gap. This gap is a staggering $30.4 billion. However, many experts wonder why video games are gaining such a huge following.
One explanation for the disparity between box office revenue and video game profits is the number of credits on a blockbuster. Video games require much fewer credits than Hollywood films. In the case of Pac-Man, only nine people were involved in its creation. Atari, on the other hand, made a big mistake when it released its video game “E.T.” in 1982. That game failed to make a profit and cost Atari more than $100 million. In today’s dollars, that would be $244 million.