Video Game Industry vs Movie Industry: Which Is More Profitable?

When thinking about entertainment giants, which industries come to your mind? Video games and movies are the obvious answers. Both have captured the minds and hearts of millions, generating huge revenues while shaping pop culture in their own unique ways. In terms of profitability, the debate about the video game industry versus the movie industry is something that continually draws interest. Which one of these two is more of a cash cow?

While it took over a century for the film industry to perfect this craft of telling stories through the screen, video games are young and, quite unbelievably, still in an incredibly huge growth rate. From simple pixelated fun to immersive billion-dollar experiences, video games have come a long way over the past three decades.

Could the gaming industry, then, ever eclipse movies in terms of profitability? Let’s dive into comparison between the video game industry and the movie industry and see how these two entertainment powerhouses really stack up.

Read more: Is the Video Game Industry Bigger Than the Movie Industry?

Video Game Industry Vs Movie Industry: Stats

It is no secret that debates involving the video game industry vs the movie industry more often than not favor gaming, especially when the numbers are anything to go by. Currently, the video game industry stands at an astonishing US$282.30 billion, according to Statista. This impressive figure includes revenues from several segments, including console games, PC games, mobile games, and the increasingly popular domain of esports. In contrast, the movie industry is projected to reach only US$73,06 billion by 2024 (according to The Business Research Company), making it clear that gaming is raking in nearly three times the revenue of movies.

Examples of Games That Made Money More than Movies

Since most people will generally say which entertainment industry grosses the most money in a year, the usual response is probably films. They couldn't be further from the truth, though. Movies may have a glossy, tinsel-like appeal, but that doesn’t necessarily make them the most profitable.

For two decades now, video game sales have significantly outpaced revenues from blockbuster movies, beating combined total revenues from box office and home video sales. This brings us to the interesting debate of the video game industry vs the movie industry. Take, for instance, the box office sensation Avengers: Infinity War, which ran with a whopping $2.8 billionin 2019 and became history's biggest opening weekend box office return. This was followed by “Avatar: The Way of Water”, which grossed $2.9 billion upon its release in 2022.

To be certain, let's look at Grand Theft Auto V. Released on September 17, 2013, the game had moved about 11 million copies in 24 hours, or around $817.5 million in revenue. In just three days, the game crossed the $1 billion mark (has generated $8.6 billion made to date), establishing it as one of the most successful entertainment products of all time. In fact, it has consistently outperformed entire franchises like The Avengers in terms of revenue.

Another game that demonstrates the power of the gaming industry is Red Dead Redemption 2, by Rockstar Games. The game is also very successful, as it has out-earned many popular films.

The list of high-grossing video games doesn’t stop there. Tetris has sold around 520 million copies, while Minecraft has moved about 300 million units. Additionally, Honor of Kings generated an impressive $864.32 million, PUBG Mobile brought in $636.7 million, and Candy Crush Saga made $592.75 million.

What Makes the Gaming Industry More Superior and Profitable?

Comparing the video game industry vs the movie industry, it is very provoking to think over the criteria that provoke such fantastic profitability of the gaming industry. Here are some of the key elements that make the gaming industry not only superior but also highly profitable:

1. The Rise of Mobile Gaming

Mobile gaming is one of the fastest and most prominent drivers in the growth of the gaming industry. This category dominated over half of the global gaming market with a revenue of $86.1 billion in the year 2020 alone. This might be attributed to the accessibility and ease that come with mobile games. To play a mobile game, one does not need a high-performance console or a superfine computer; all one needs is a smartphone and access to the internet.

All this ease of access lets games reach an even bigger audience, with casual gamers who wouldn't say they were traditional gamers getting pulled in. As more smartphones have penetrated most parts of the world, it is no surprise that mobile gaming has continued to grow, bringing in a great stream of income for developers and publishers alike.

2. The Popularity of Esports

The esports market, which is in a growth boom, is another significant factor contributing to the profitability of the gaming industry. The estimated value of the esports industry was $1.1 billion in 2020; for the next several years, further growth will take place accordingly. But what really makes esports so attractive is that it's just so accessible for viewers and competitors alike. Between Twitch and YouTube, it has never been easier to watch competitive gaming, and leagues and tournaments springing up left and right allow new players to join in.

If you are among the many viewers of an esports match, then you probably know just how really exhilarating this particular field is. Because from millions of fans who tune in for their favorite teams head-to-head for million-dollar prize pools, the ecosystem becomes lucrative thanks to sponsorships, merchandise, and ticket sales.

3. The Unique Hardware Ecosystem

Unlike the film industry, the gaming sector also benefits from selling specialized hardware, such as consoles and gaming PCs. This adds another layer of profitability. Imagine when you buy a PlayStation or an Xbox, you're not just purchasing a device but also investing in an entire ecosystem of games and accessories.

It also revolutionized microtransactions and downloadable content in collecting revenue on behalf of game developers. From character skins to full game expansions, everything is sold to players for real money. This really enriches the game-playing experience and also brings a very substantial boost to the bottom line for a developer. Further adding to this are merchandise sales, where fans can show their love for a game with everything from collectibles to wearables. This multi-point avenue to revenue generation is rather different from most industries, such as the film industry, where revenue streams are limited.

4. High-Quality Development and Effective Marketing

Quality gaming has improved a lot over the years, and much of it owes to zealous development teams and an effective way of marketing the games. For example, Rockstar Games, needless to say, is one of those names that speaks volumes about high-quality gaming. Their reputation for producing intricate and well-polished games gives them a significant advantage in the market. You may be wondering, what does this mean for sales? Simply put, when a company builds a strong reputation for quality, players are more willing to invest in their products. They know they’re getting an experience that’s worth their money.

Effective marketing also plays a crucial role in reaching the right audience at the right time. With targeted advertising and strategic promotions, game developers can maximize their visibility and attract potential buyers. This combination of quality and effective marketing drives significant sales and fosters a loyal customer base. Read more: The Strategic Role of the Games Industry in Driving Economic Growth and Innovation

5. Rich Storytelling and Community Engagement

Finally, solid narratives, replayability, and community activities ensure interest in the game among players long after it was published. Indeed, Minecraft is an ideal case from the point of view of these perspectives. Apart from offering a playing field for creativity, it is a highly shared experience within the player community of shared experience, creations, and modifications. In this respect, it stimulates replay value with continually varied strategies and goals. This can encourage players to repeatedly revisit the game. The moment a game has conquered its players' hearts and minds, this builds a loyal base that would gladly invest time and money in additional content.

Moreover, the community involvement created through forums, social media, and in-game events keeps the excitement alive. Equally common, game developers listen to suggestions made by their players through implementations and updates that improve the general experience one gets while playing the game. This active engagement not only boosts player satisfaction but also translates into sales for expansions and sequels.

Wrapping Up

If there is a debate that pits the video game industry vs the movie industry, then the answer lies in the numbers. Yes, movies might have that glitz and glamor, like a red-carpet premiere and star-studded casts. But, video games go a little further, that is deeper engagement, interactive storytelling, and replay value.

So, which is more profitable? It has taken over the lead in today's entertainment landscape, and such a trend is nowhere near an end. Be it just a casual player or involved with the industry yourself, the future of gaming is bright and it will be profitable. If you want to expand your game into new markets, thereby enjoying the global potential of the gaming industry, let Digital-Trans Asia be your partner in taking the game to the next level. Equipped with in-depth and professional knowledge in game localization, we ensure that your game reaches all its players in their own local, native language for a smooth, enjoyable experience.