The video game trade group The Entertainment Software Association has said that the combined 2004 sales of video game hardware and software was $7.3 billion in 2004 - an amount that competes with the total Hollywood box office revenue.
To me, though, the timing and time it is taking to introduce new products and games is taking away the impetus that has fueled this huge growth. They have a chance to become the premiere entertainment industry in the world if they do things right.
In the U.S. alone the video game sales have now declined for seven straight months, dropping a total of 8% to $499 million. This is during this time of upheaval in the industry as it waits for the new console technology to be introduced.
The only next-generation console, Microsoft's (MSFT) Xbox, has brought in $96 million of the total.
Hardware sales fell 31 percent in March to $220 million, on slowing sales of current generation consoles such as the original Xbox, Sony Corp (SNE).'s PlayStation 2 and Nintendo Co. Ltd's GameCube. Sony's new PlayStation 3 and Nintendo's Revolution are scheduled to hit stores later this year.
What is important about this to me is how in a relatively very short time, this style of entertainment has caught up with the Hollywood box office already. It isn't simply the gaming and the types of games that is most important, but look at what the players are able to do with their systems, the Web and interaction with others in it. These are the types of things that movie-makers will need to look at for years ahead.
At this pace Hollywood is fast being marginalized, even with their latest attempts at integrating with the online world.
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