GRAND THEFT AUTO V Is Not Scaring Hollywood

by     Posted 310 days ago

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Dozens of articles and blog posts have covered Grand Theft Auto V‘s $800 million in day one, worldwide retail sales. Virtually all of them have tried to make the point that this somehow proves that video games are now beating the crap out of Hollywood.

Hogwash. First order hogwash, at that.

First, let’s not quibble with the fact that GTA V has proven to be a financial success. Selling $800 million of anything in 24 hours is impressive. That the game will likely surpass $1 billion in a matter of days should prove definitively that video games are a major commercial force.  Hit the jump for more on why the video game industry isn’t bringing down Hollywood any time soon.

grand-theft-auto-5-box-artOnly, we already proved that over and over again with other high-profit game releases. Last year, when video games generated just under $58 billion in global revenue, we proved that. That didn’t even include mobile gaming.

That a video game made $800 million retail in a day is newsworthy, but it’s hardly earth shattering. It’s not telling us anything about video games as an industry (or art form) that we didn’t already know.

It most certainly is not telling us anything about the film industry.

Yet many members of the fourth estate just couldn’t help themselves. Perhaps they just needed something to compare it to, because they couldn’t quite wrap their heads around basic addition and division.

Slate.com, continuing its trend of lazy post-lets, published this doozy: “The game is expected to blow past the $1 billion threshold, making its sales figures the envy of other like-minded industries, namely Hollywood.”

Those 23 words represented 21% of the entire article. Take a moment to reflect on that.

Deadline Hollywood, which should know better, posted a piece not much longer than Slate’s and just as work-shy. It included the following: “The GTA V [sales] already sets it in front of Man of Steel, which with a worldwide haul of $663 million, is the [third] biggest movie of 2013 so far.”

Meanwhile, the Los Angeles Times wrote about Call of Duty: Black Ops II. That game was the previous holder of the single-day sales record, recording $500 million in its first 24 hours. “That game went on to reach $1 billion in sales in 15 days,” recounted the piece. “Faster, many observed, than the box office record-holder Avatar.”

Why are all of these bits of reporting so forehead-slap-inducing? Let’s start with the basic math.

grand-theft-auto-v-collectors-editionThe suggested retail price for GTA V is $60. You can find it for as cheap as $55, but you can also find a collector’s edition going for $150. Who knows what the average retail price paid was? Let’s generously go with the low end of $55.

At that price point, $800 million in sales adds up to about 14.5 million copies.

Now let’s look at Man of Steel, which Deadline Hollywood brought up. Let’s not even bother with its worldwide grosses. In just the United States alone, it has made $291 million, a mere 36% of GTA V’s single day sales

But the average ticket price in the United States is $8.38 according to the National Association of Theater Owners. So that measly $291 million totals out to just under 35 million tickets. Even with repeat buyers, that’s double GTA V’s audience, and that’s just the U.S.

If that same average ticket price was applied to worldwide box office, Man of Steel would have sold 79 million tickets. The Avengers, which bested the box office in 2012 grossed $1.5 billion around the world and $624 million here at home. That’s almost 77 million tickets in just America. Around the world, it was probably closer to 180 million.

grand-theft-auto-5-skydivingThe Los Angeles Times deserves some credit for at least mentioning that once GTA V surpasses $1 billion, however many hours from now, it will have sold “roughly 18 million copies of the game.”

It’s not as if one metric is inherently better than the other. But when somebody posts online, “GTA V made $800 million in a day! When was the last time you saw a movie do that?” you can guess they wouldn’t be gloating quite so much about the total number of people who ponied up to buy said game.

But did 14.5 million people see the biggest Hollywood blockbuster in just a day?

No, but that just makes a more damning case for video games, at least in comparison to movies.

Everybody lines up to buy GTA V on day one. They take it home and play it for days after that, but all the money is spent right then and there. Take a look at the drop off in sales between day one and day two for any major video game release ever.

Movies don’t work like that. You consume the movie more or less at the same time you buy your ticket, and the laws of physics and time cap just how many people can see a movie in a single day. There are only so many theaters, and only so many seats inside of them. There are only so many hours in a day – 24 of them, in fact – to fit those two-hour blockbusters.

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  • tertiaryintervention

    Of course Hollywood won’t be brought down by video games, Hollywood is being brought down by Hollywood and I am laughing all the way down with them.

    Also the author has a flawed understanding of the gaming industry and by flawed I can say without hesitation that the author has NO understanding of the industry at all.

    • Kevin

      based on?
      And Hollywood is far from being brought down. The gaming industry has many of the same flops and high budget problems. And why you would post on Collider, a film website, if you don’t like Hollywood, I haven’t the slightest clue.

      • tertiaryintervention

        Try again idiot. Let me clarify. Hollywood film studios are destroying Hollywood. Inflexibly and fear drive inform their every decision. The bloat gets worse and worse. I promise you if next summer is anything like this summer film Hollywood will not exist in it’s current form by 2020.

        Ask yourself why they are looking to China more and more for financing.

      • Kevin

        Film studios aren’t closing. There will be less high budget films, of course, but that’s really the only major difference. I don’t understand what you mean by China, most high-budget films are made outside the US.

      • Seanpb

        They’re going into China because for the first time the Chinese government is allowing foreign films to be distributed in their country of 1 billion people. Which is what, 15-odd% of the world’s population who can now pay to see western movies in the theater. The trade off is these films contain Chinese centric or excsluive content. Thats the only part of the deal thats a gimmick. The rest of it (distributing the film in China) is simply good business sense and a license to print money.

        Additionally, whilst using Man of Steel as an example, what adds to the gross is DVD/Blu Ray. at $20-$40 depending on region and release, that’s just more money.

        You can’t deny that whilst games are becoming a super profitable enterprise, a company like Rockstar, or the makers of COD can only churn out 1 of these sorts of big ticket games every couple of years – one a year at the most, for a substantial investment in time and money on their end. The big studios, on the other hand, can release many more products into the marketplace.

      • tertiaryintervention

        No they’re going to China because they want to spread the risk around. They hedge their bets with acquiescence to Chinese demands when it comes to content, then they have the backing of the state in promoting the flick.

        Hahaha. Media sales? Are you high? DVD/BR is dying. The only reason it hasn’t died completely is that the studios are fragmenting streaming options against their own profits. HD has helped slow piracy but that wont last long. As soon as fibre is mainstream you will hear the death nell.

        As for the amount of games a studio can churn out a year, do you really rate quality by volume? So the more shit they put out the better in your eyes? No comment.

      • Seanpb

        They’re going to china because another 1 billion people live there. Its simply more market opening up. In return they get subsidized, sure, but they also get a potential goldmine worth of receipts.

        Didn’t Titanic do something like $100m+ during its release their last year? Easy money.

        Even when home video goes fibre you won’t be getting it for free, and there will always be a market for people who like to physically own stuff. Its why records as well as CDs survive, however small a piece of the market they have. Bottom line is enough people still like actually owning something they can hold. Thats immaterial to my point though, as what I was saying is that the initial box office income is supplemented by home video release, whether it be vhs, dvd, blu ray or fibre. They aren’t just going to give it to you for a nod and a handshake. Then there’s toys and other commercial tie ins that don’t exist in the same quantity or availability for video games.

        And finally, studio output was mentioned to stress whilst Rockstar is capable of releasing a game of GTA V’s hype and quality at a cost of $250m once every 3/4/5 years, Disney, Warner’s, Universal et al can produce a couple of huge budget films with a potentially huge audience every year. Its not about quality in that sense, its simply saying those studios are capable of making more films more often than a game studio is able to do the same in their format.

      • poppincherry

        How is Hollywood destroying Hollywood? It leaves one with idea that Hollywood is this pure place. Hollywood is a fucking whore house. Crap coming out of tinsel town is business as usual.

    • Steve

      “Also the author has a flawed understanding of the gaming industry”

      Care to elaborate on this?

      • tertiaryintervention

        Case in point. Word of mouth and the idea that game sales don’t grow based off of it. All the author knows is the vanilla garbage game studios throw out every year, Call of Duty, Madden, Halo. He should try to understand a business before he opens his mouth about it. But then again if he did the entire premise of his article would be null.

      • Kevin

        He said game sales don’t grow based on word of mouth?

      • tertiaryintervention

        Hey Kevin how much is collider paying you to shill?

        “Take a look at the drop off in sales between day one and day two for any major video game release ever.” The implication being sales don’t build for most games after day one.

      • Kevin

        What he said was true.

      • tertiaryintervention

        Prove it.

      • Kevin

        That day one sales are better than day two sales?

      • tertiaryintervention

        You’re trying to sidetrack the argument. You know what I am asking you. Fuck on off if you can’t deal with facts you clown.

      • Kevin

        So what you just said was an implication is now a fact?

      • tertiaryintervention

        It was not my implication it was the author’s you retard. You can dance around it all you what, you’ve done nothing but prove my point. Although I would hazard to say you were the author himself since you seem as clueless as he is.

      • Kevin

        Blah blah blah, putting words in peoples’ mouths, calling people names, blah blah blah.

      • tertiaryintervention

        Sure thing sweetheart. Whatever makes the fact that you are an idiot easier for you to swallow.

    • LEM

      As long as there are saudi billionaires Hollywood will have financing.

      • tertiaryintervention

        As long as there are chinese investors Hollywood is willing to kowtow to Hollywood will have financing.

        There I fixed it for you.

      • LEM

        I didn’t know people actually typed that last line.

      • Dheep’

        Yes, I hear they are pretty Stupid.

  • Dave

    More BS hollywood spin coming out of the collider.

    • Neo_

      What BS? Its called math..

      • Strong Enough

        don’t bother. he’s probably a republican. they don’t believe in facts

      • Mixed Race rich kid NYC

        And the award for most unnecessary political comment goes to…

      • Strong Enough

        Thank you, thank you. I’d like to thank Buddha for giving me fingers to type with. and also for Chicken Tacos which will be supply me with a full stomach tonight. And also shout out to Kato. WE MISS YOU BRO COME HOME!

        *cries*

      • Shane Walker

        Yeah, I’d have to agree. Instead of saying something worthwhile about the article he used it to arbitrarily throw out a pointless zinger about republicans? I wish people like him would just stay off of the Internet. And never leave the house for that matter.

  • Lou

    Why you mad, bro?

    • Kevin

      Because other articles are comparing things unfairly.

  • dj

    Here is the problem with this author’s logic: The cost of the game, including marketing, is reported to have been 265 million. The budget for The Lone Ranger was at least 250 million to make. There is a big problem when movies cost as much, or more than, video games. Video games can charge 60 dollars and people will pay it because you get more bang for your buck. Who the hell would pay 60 bucks to go see a movie. It doesn’t matter how many tickets are sold, what matters is profit, and video games just make better profit. Not that it matters, we’re talking about two completely different art forms, but this article is pointless.

    • zac

      sure compare the latest misfire but this article makes a lot of damn simple sense! you cant compare movies to games, its apples and oranges, last time i checked avatar cost 500 mil! on a 15-20 dollar return per person not to mention billions in ancillary deals. only way you can compare it is if you rent GTA V for 2 and half fours for 10 bucks a pop an gamers line up to play. Also the whole world watches movies, the whole world doesn’t play serious games like GTA V. I don’t play video games but I do respect the craft but to say Hollywood only makes crap well that’s bull! What the hell do you call the oscar season and as for blockbusters let the kids have summer that’s what it’s they’re for. Pretty sure “Gravity” opens in a few weeks and that’s a hollywood blockbuster that doesn’t need to be in summer anymore

    • Kevin

      This article is pointing out the flaws with many other articles, that is far from pointless.

    • The Driver

      It’s a big problem for games to be that expensive to make too. Whatever hollywood’s reaction or lack thereof to GTA V’s success, it’s budget was a monstrosity. Most of the gaming community was taken back by how freaking much it cost to make. That is NOT the norm nor is it a good sign for games.

      It’s a great game don’t get me wrong, but just like Hollywood, the success inspires a bunch of “me too” would-be blockbuster games that miss the mark like Assasin’s Creed 3 or Resident Evil 6. The scary thing is these budgets are just going to continue to inflate and stifle creativity into the next gen. The more money they dump into these things the easier it is for companies to get shuttered after one or two market misfires (an already notorious problem in the game industry).

    • Brad Pilcher

      “It doesn’t matter how many tickets are sold, what matters is profit, and video games just make better profit.”

      It actually does matter how many tickets are sold. If I sell 10 of something for $10 a pop, I can make the same revenue as if I sold 100 for $1 each. Since films net a higher volume of buyers, they can offer a lower price and still earn gobs of money. Plus their margin for error is higher, because it’s easier to get a new buyer at a relatively low price.

      Again, as I wrote in the article, the profit margin of any particular film cannot be ascertained from box office alone. Studios reap money not only from initial box office, but also the home video release, television rights, streaming rights, and merchandising. Video games don’t have that long a revenue tail.

      As for the assertion that “video games just make better profit,” that’s suspect at best. The film industry, by virtue of the volume of buyers and its ability to release more product per year, can turn very tidy profits. The AAA video game market? Well, let’s see:

      Polygon did a great write-up on the state of the AAA video game business last year. You can read it at http://bit.ly/1gQP1hQ, but I’ll summarize some numbers for you.

      Ubisoft’s fiscal year profit margin was 3% while EA’s profit margin was 7%. Those are not good margins, especially for companies that spend tens (if not hundreds) of millions per game. There’s virtually no room for error with margins like those.

      Activision managed an impressive 30% profit margin by the end of the 2012 fiscal year, but it’s success was largely tied to World of Warcraft, which is reaching the end of its lifecyle. That would explain Activision’s declining profits from the year before and why, even with a double digit profit margin, its total revenues were down 19% and $200 million less than Ubisoft’s.

      So yeah, I like video games. I play them. I buy them. I want them to keep churning out great, sprawling narrative worlds to interact with. But if I had a choice between being a Hollywood producer or a video game executive, I know which one I’d choose.

  • Catsniffer

    Linkbait like this is why I’m done with this site. Pointless article. Pointless read.

    • Kevin

      Bon voyage.

  • Jason

    Games are not taking down Hollywood… YET. But that time will come.

    • Kevin

      No it won’t.

  • Jason

    Games are not taking down Hollywood… YET. But that time will come.

  • Stefan Bonomo

    I thought this weas a great article. Is Hollywood losing to video games? Hell no. Are video games a failure? Hell no. They both work in different mediums, thus each earn their money differently. Like he said, a game costs between 50-60 bucks (GTAV is selling some places for 70) while movies in a theatre costs 10-20 bucks. So it’s kinda hard to compare them in terms of general numbers.

  • Stefan Bonomo

    I thought this weas a great article. Is Hollywood losing to video games? Hell no. Are video games a failure? Hell no. They both work in different mediums, thus each earn their money differently. Like he said, a game costs between 50-60 bucks (GTAV is selling some places for 70) while movies in a theatre costs 10-20 bucks. So it’s kinda hard to compare them in terms of general numbers.

  • peter

    Games are more fun have better stories and are far more interesting Hollywood is digging its own grave by making pointless remakes, sequels, prequels that people are not interested to see.

    • http://buzzabit.com/aaron/ Aaron Sullivan

      You are paying attention to the wrong movies if you think video games have done better with stories and the “more interesting” thing is very subjective.

      They are different and point out the failings and successes of each other in the places they are similar but very few blanket statements apply here.

      Also, keep in mind roughly 10% of people finish video games. So 10% of people are experiencing the entire story. If video game stories ARE better few know about it.

    • Kevin

      The biggest videogames are all remakes, sequels, and prequels. And saying games have better stories than movies is like saying movies have better stories than books. The film industry (why do people still refer to it as Hollywood?) is not struggling.

  • alex99

    Apples and oranges. Why is this even a discussion.

  • Norrtron

    Jesus Christ what a worthless article. Why do people have to compare these two industries trying to say which one is better?

    • Kevin

      He says that they shouldn’t be compared. Don’t judge an article before you read it.

      • Norrtron

        The entire article is one big comparison.

      • Kevin

        by pointing out how different they are

    • Dheep’

      I don’t like your School. My school is better.

  • asiboy14

    This makes as much sense as the Apple vs. Google Argument.

  • Yep

    GTA V already passed a billion a few days ago (it did it in 3 days). You’d know that if you just used google or something before releasing your article.

    Also of course video games aren’t killing movies. They’re totally different mediums. Plus there are giant portions of the population who don’t even play console games but pretty much everybody, to some extent, watches movies.

    • Guest

      He says that they shouldn’t be compared when he said, “nonsense competition between movies and video games”.

  • Kevin

    Since there are so many “pointless article” comments, it looks like a lot of commenters didn’t read the article. So I will summarize: many articles recently have come out saying that the film industry must envy GTA V making so much money so quickly. Brad gives some statistics as to how the gaming and the film industry differ in their revenue. Then he says that they shouldn’t be compared because of it (another thing a lot of commenters are saying that makes me believe they didn’t read Brad’s piece).

  • Nick

    An angry rant, disguised as a news article, bashing other news article sites.. The is like the ‘inception’ of shitty journalism

  • Jeremiah

    In Australia, GTA V will be retailing for 90$-110$ as with most of our new PS3 games so well above a movie ticket, although our movie tickets for an adult are about 20$…..

  • Strong Enough

    A game costs 60 bucks. a movie ticket is 9 bucks. end of story.

  • Universal

    $8 being the average ticket price is COMPLETE BS and collider knows it. Problem is the actual average ticket price would skew data in a much less impressive way. So of course they go out and dig up statistics that fit their articles. Garbage journalism on every level.

    • Brad Pilcher

      It’s what is reported by the National Association of Theater Owners, and the jump to $8.38 was actually a rather large increase from the previous high based on historical trends.

      Keep in mind it’s an average, so it takes into account matinee prices, senior and student discounts, and other factors that deflate the cost of a ticket as well as things like 3D and IMAX surcharges that inflate the cost of a ticket.

      It’s also a national average. If you live in a large metropolitan area, your average may be higher, but if you live in a smaller city or a rural area, your average could even be lower.

      In Atlanta, where I live, 2D, non-IMAX, non-matinee tickets hover around $12, but I frequently hit up the weekend matinees. In my favorite theater, I can see a movie for $7 on Sunday morning.

  • asharpman

    I have but one thing to say: games are not an artform. They never have been and they never will be. In order to be a game, there has to be a chance of success and failure. You don’t fail or succeed at art. Games are for fun, not for profundity. The only parts of a videogame product that can be considered art are things like the cutscenes, music, character/art design; e.g. the non-game elements.

    • asharpman

      Debate me, gamers. Warning: your arguments will all fall apart, even though I’m sure right now you’re think that you’re right.

      • Nathan

        Nobody Cares.

      • asharpman

        “I’m really dumb.” – Nathan

  • matthew

    I don’t understand the price comparison? You cant just take a movie and say if it had tickets the same price of games then bam alot bigger sales. majority wouldn’t go to the movies if they were that price, they are different markets.
    Yes a game is $60 but that is what I want to pay for it and think it deserves, if a movie ticket price cost that much I’d tell it to go take a hike.

    I will say obviously games won’t bring down movies, oversaturation of the market with the same products will bring it down.

  • Nathan

    Is Hollywood scared? Nope! (GTA: the movie here we come!)
    Is the film industry scared? Nope! (Hell, one could argue the competition is helping the industry evolve)
    Is Brad Pilcher scared? OF COURSE!

  • Dheep’

    You got Games & you got TV . For us – never the Twain shall meet. We watch a bit of TV. Lots of Movies & NO games. Lately ,since watching the finale of Breaking Bad ,have seen LOTS of Grand Theft Auto Commercials. We never fail to remark on How Cheesy & crappy they STILL look. And how Absolutely Stupid & Juvenile the Plots Still are. We wonder – ” Who in the Hell Plays this Garbage? Oh ,Little Boys” . So there must be a LOT of little Boys around. Young & Old.

    We also make note of where this title originated – Ron Howard’s 1st (or 2cnd?) movie. Can you believe it? Funny.
    But like we 1st said here- What Garbage.

    • Michael Davis

      However you analyze the numbers, investors are looking at what is taken to the bank, not how many copies or tickets were sold.

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