When Games Ruled the World

January 3rd, 2012 Tech, Tech Features, The West Australian

The next decade’s heroes of pop culture might not be Obi Wan and Anakin or Jake Sully and Neytiri, but Captain Soap MacTavish and Marcus Fenix. Reports about video game revenues nipping at Hollywood’s heels have been a 21st century staple, and the last three years have seen the former emerge as the winner. In 2008, while video and Blu-ray sales dropped 6 percent to US$29bn, video game sales rose 20 percent to $32bn. And the UK Telegraph reported this week that video games outsold films in 2011 throughout the region.

More people actually saw movies than bought games, but when a top tier game retails at over $100 versus around $15 for a movie ticket, it was the film industry’s race to lose as video games exploded in popularity.

Analysts and fans took notice in October 1998 when Titanic ended its 10-month North American cinema run with almost US$601m, surpassing $1b worldwide soon after. In December 2009 Avatar opened to huge hype and crossed the $1bn mark in only 19 days, ushering in the new 3D era and opening the floodgates for a slew of billion dollar blockbusters from Alice in Wonderland and Pirates of the Caribbean: On Stranger Tides to the US$2.283bn two-part Harry Potter and the Deathly Hallows finale.

By contrast, Call of Duty: Modern Warfare 3 was released on November 8 of this year. The CEO of publisher Activision told investors 1.5 million people were queueing outside 13,000 stores around the world for midnight openings. In France two armed men purposely collided with a supply truck carrying a shipment of the game and robbed the driver of his cargo using tear gas. The game went on to make US$400m in the US and UK alone in 24 hours. Within 16 days it had earned US$1bn, beating Avatar’s record and making a video game the most successful commercial entertainment property in history.

But game publishers are already looking at the future. They know their mostly young, male fans are dedicated console gamers but demographics such as female and older audiences are harder to target. The new frontier is social network gaming, where companies like Zynga (worth US$7bn a few days ago) hold a commanding lead with simpler, less solitary games like Farmville. Game publishers are now spending up big on social gaming acquisitions and launching App store versions of their titles to attract new customers.


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