Videogames Beat DVDs... Except, Not Really

The gaming and tech press are all aflutter with the news that videogames beat DVDs... except they don't, at least, not in all the areas that matter.

The data that lead to the "games beats movies" conclusion, much like the one-day comparisons of game blockbusters like Halo 3 to the one-day takes of top films like Dark Knight, are revenue, rather than unit sales figures. They've taken the 2008 revenue for "packaged media" that includes games and DVD movies (including HD on Blu-Ray) and divided it into "games" and "DVD/Blu-Ray".

While the total increased, the share of DVD/Blu-Ray declined and the figure for games increased.

The problem is that the average price of a game is significantly higher than the price of an average DVD. This means higher revenues but lower unit sales. Far more people bought Dark Knight on DVD, but they paid less, so in the revenue model they don't count as many as all the people who bought GTA IV, for instance.

The problem with this measure is that it exaggerates the cultural importance of games and gaming. The gaming press is painting this as gaming moving into the mainstream and becoming more important. Whether that is really happening is debatable; what's happening is that game budgets are up, game prices are up, and the people that are still paying are proving slower (so far) to reduce their spending compared to DVD purchasers-- probably because they buy fewer units at larger intervals. There aren't enough AAA console releases to buy one every week, but you could easily buy a DVD a week without necessarily dipping into the bargain basement. As such, a DVD purchaser can more easily regulate their spending without sacrificing a significant number of title purchasers. Because DVD prices vary more than game prices, they can spend less without necessarily making significantly fewer purchases, or feeling that they are making a sacrifice.

However, a gamer who has put several hundred dollars into a console, peripherals, and related items, and is looking at 4-5 AAA console titles to purchase in a year might be hard-pressed, even in the face of financial hardship, to eliminate even one of them. They might be more apt to go ahead and get those games, and worry about taking austerity measures later when things are really bad. As such, one might imagine that the impact of the current financial crisis on the gaming portion of the entertainment market may take place within 2009 (and forward) rather than 2008.

UPDATE: Another post on CNet, this one by Don Reisinger, explains why he prefers to spend his entertainment dollar on games, rather than movies. The upshot is, better value for money.

After all, think about it: even assuming that it's only worth purchasing (rather than renting) movies that you really like and will watch repeatedly, there are limits. There are movies I like to watch once a year, but that's pretty much the limit. So assuming a reasonable price, like $30, and a long, 3-hour movie, and ten-year time period (Sony says that's how long console generations should last, so we'll take that) that means 30 hours of entertainment for $30, or $1 per hour.

Halo 3 cost twice that-- but how many people play for 30 hours or less? If you take your time the campaign can easily last 6-8 or even ten, and I tend to play through more than once. Then there's multiplayer. And co-op. And Forge. And films. I don't play Halo games nearly as much as other people, if you include multiplayer, and I'm sure I've spent a heck of a lot more than 30 hours. Other games, like Oblivion, Mass Effect, Fallout 3, include far more gameplay time than that.

Even if you like both, games are generally better value for money, even at the high price point they've reached in this generation.