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Why Do Video Games Make More Money Than Box Office Movies?

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.

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