For most people, this is the season of colorfully lit houses lining the streets, a chance to catch up with family, and eggnog roasting on a open fire.  It is the season for giving to others and telling your friends that you care.  It is the season to reach out to the less fortunate and bring a little joy to everyone's life.

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.  This preposterous notion was first set forth in 1914 when the thriving Pachinko Machine Industry proudly proclaimed that it was bigger then Hollywood.  It was also the last year that it was really true.

Every season we can count on several of these misplaced stories and I thought it would be a good idea to finally debunk them, ending this Yuletide tradition once and for all.

Let's start with the facts.

The 2004 domestic Video and Computer Game Industry is estimated to be around $10B.  This is a slightly misleading figure because it includes the sales of the console machines, in addition to the sales of the software, but we'll go with it.

The domestic US box office is estimated to be around $9B for 2004, and this is where the myth starts to take life.  The problem is the movie industry is a lot bigger then just the U.S. box office.  DVD sales and rentals for 2003 topped $16B.  VHS sales and rentals for 2003 was $6.4B.  VHS sales are declining fast, but most of that will just shift over to DVDs, which brings the grand total for non-box office movie sales to over $20B, twice the figure for the entire game industry.

Things only get worse when you start to look at the amount of licensing revenue the movie industry makes compared to the game industry, which mostly licensees in, rather than out.

Other things that should be obvious, even without the figures, is if the Game Industry is larger then Hollywood, where is all the wealth?  Why aren't game designers, writer, programmers and artist floating in money like some people in Hollywood are.   Where are all the limousines, the fast parties, the tabloids tracking our falls in and out of rehab.  Where is all the money?

The notion of the Game Industry being bigger then Hollywood is also ridiculous when you look at budgets.  A big budget game cost from $15M to $20M to make, double that for marketing.  A big budget movie cost $80M to $100M.   Something doesn't make sense, and it should only take an ounce of curiosity to realize that the myth just can't be true, or that the economics of the two businesses are so different that it's silly to compare them.

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?  This alone should give the preachers of this myth pause.  Think about it.

It's also interesting to look at 2004 U.S. box office totals and you start to see that we aren't even in the same league as movies when it comes to making money:

Shrek 2 -- $438,478,000  
Spider-Man 2 -- $373.378,000
The Passion of the Christ -- $370.233,000    
Harry Potter -- $249.359,000    
The Incredibles -- $232.573,000

You don't get to under $100M U.S. box office until number 19 on the list,  Remember, this is just the U.S box office for 2004.  This does not includes DVD/VHS sales and rental.

Let's look at the all time box office earners (worldwide):

Titanic (1997) -- $1,835,300,000
The Lord of the Rings: The Return of the King (2003) -- $1,129,219,252
Harry Potter and the Sorcerer's Stone (2001) -- $968,600,000
Star Wars: Episode I - The Phantom Menace (1999) -- $922,379,000
The Lord of the Rings: The Two Towers (2002) -- $921,600,000

That's billions of dollars if you've lost track of the digits on those first two.  Billions.  And that's not adjusted for inflation.

You don't get down below $200,000,000 until number 258 on the list.

Adjusted for inflation, the all-time U.S. box office champs are:

Gone With the Wind (1939) -- $1,240,554,000
Star Wars: Episode IV - A New Hope (1977) -- $1,093,654,300
The Sound of Music (1965) -- $874,430,400
E. T. The Extra-Terrestrial (1982) -- 870,985,600
The Ten Commandments (1956) -- $804,340,000

Interesting.

Now let's look at games sales for 2004:

Grand Theft Auto: San Andreas -- $170,000,000
Halo 2 -- $160,000,000
Madden 2005 -- $120,000,000
Spiderman 2 -- $43,000,000
Fable -- $40,000,000

Looking at the top three on the list, they are very respectable, but it drops fast from there.  Once you get down number 20, we're looking at around $20M in sales, compared to the movies industries $100M at number 20 (again, just for U.S. box-office).

I don't know why it bugs me so much when I hear this myth reiterated time and time again.  Maybe it's because of the strange jealously the Games Industry seems to have with Hollywood.  Maybe it's the fear that one day it really will be true.  Maybe it's the fear that it never will be.

I got to run, I can smell the Eggnog burning...