It is a well-known fact that the video game market is bigger than movies and music combined, but did you know the US video game market alone is worth more than the global cinema industry?

In 2023, Deadline reports global box office revenue was $33.9 billion, a 30.5% uplift from 2022, courtesy of Oppenheimer and Barbie. That was widely considered to be a good year, but it pales in comparison to the US gaming market. In the same year, US gamers spent $57.2 billion on their hobby. That includes $48 billion on ‘video game content,’ with $6.6 billion on hardware. That underlines that, much like the cinema industry, the market is heavily dependent on the quality of the output. That's not the whole story though - video games have been going from strength to strength ever since the mid-eighties.

How is it that the video game industry has become so successful?

How Video Games Became So Popular

Big Titles

Franchises: that’s what has sold big at the movies. Marvel films are widely credited with having saved cinema by some (and ruined it by others) by simply creating an immersive universe and then telling every story they can from that world. Stick a Marvel character in a film, and you have a winning formula, but video games have been doing that for many years. At first, games piggy-backed on films – the biggest video games of 1988 include Top Gun and Robocop, trading off the big films. By 1992, the biggest games were Street Fighter II and Sonic the Hedgehog – games that became movies. The tide had turned, and characters such as Mario, Lara Croft, and Agent 47 became popular in their own right after being in video games.

Since the mid-nineties, games have slowly become entertainment juggernauts in their own right. Call of Duty, FIFA, Red Dead Redemption, Grand Theft Auto – these are all huge games that are known around the world. They also make big money for their owners. Call of Duty publisher Activision has recently been credited with helping Microsoft to record a revenue uplift of 49%.

Big titles mean big revenue, and the fact that $466 billion was spent on video game content underlines where the real money comes from. It’s not just the software but also the skins, additional content, and controversial loot boxes. That’s something Electronic Arts has fallen foul of in the past, being classed as promoting gambling with their content on FIFA, but it hasn’t stopped the world from spending real money for in-game benefits. Nobody really likes pay-to-win except those who can afford to do so!

Community

One aspect of video gaming is the community that builds up around a game. If you go to the cinema and watch a film, you might talk about it with your friends, but do you meet new people through the film? Do you watch it develop and grow and become part of a community? Can you watch big events related to the film, maybe even having a little bet on it yourself? All of those answers are no, but in video games, it’s always a yes. Referring back to Call of Duty, a digital wrecking ball constantly slaying the best-seller charts for video games, there’s a community built up that only gets stronger. The premise of the game is simple – shoot enemies with the aim of either winning a round for yourself or your team. However, that’s only the start of the entertainment. There are forums you can join to talk about all things Call of Duty. It’s almost as easy to start a conversation with another gamer about which game you play as it used to be to start one with a stranger talking about which sports team you support.

Call of Duty is much like a sport – there are thousands of players across the world, all of differing abilities, but then there are the very best, competing in live-streamed events. Indeed, the Call of Duty League esport is another example of the reason gaming is driving forward in terms of revenue. Fans can watch their heroes live and even follow a Call of Duty betting guide to wager which player might win a certain map or even draw first blood. It adds a layer of involvement as a spectator, not just a gamer. It takes video gaming out of someone’s house and into the mainstream, just like a night watching Super Bowl. This sense of community and involvement has helped drive video games forward more in recent years than ever before.

Accessibility

Finally, accessibility is a huge benefit to video gamers. Back in the eighties, when Sonic the Hedgehog first dropped, you could play it on the Sega Megadrive, and if your friend wanted to play with you, he came to your house. Now, if you want to play Call of Duty, you can do it on your PC, Xbox or PlayStation. You can do it on a tablet or phone as well, sitting on the bus on your way to work. You can play with a friend in the same room or with a stranger on the other side of the globe.

The shift in revenue isn’t new – in 2011, the global video game industry was worth $8 billion, more than music ($4 billion) and cinema ($3 billion) combined. However, the chasm is becoming bigger, and the fact the US market alone is worth more than the global cinema industry proves that. It’s only going to get bigger – we’ve touched on Call of Duty here, but other games such as EA Sports FC, Madden NFL, and Grand Theft Auto all have similar, or greater impact on the market.

 

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