NEW YORK (CNN/Money) - There's a lot of money in mayhem.
Since its release in late October, "Grand Theft Auto: Vice City" has sold 4.4 million copies. Assuming $50 per copy (the average price of the game), that puts cumulative gross revenues in the neighborhood of $220 million. Those numbers are more than double what "Grand Theft Auto III" (2001's top-selling game) was posting in the same time frame.
You often hear the gaming industry compared to Hollywood, so let's put that number into perspective. $220 million is $7 million better than "Austin Powers in Goldmember" took in at the box office. It's $10 million better than "Back to the Future." It also tops "Toy Story," either of the "Mission Impossible" films, "Indiana Jones and the Last Crusade" and "Gone with the Wind." In fact, the number is so strong that only 34 films have posted box office receipts greater than what was spent on "GTA: Vice City".
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| Vice City sales have blown away most Hollywood hits |
Granted, there are a few caveats there. In terms of overall exposure, movies still win hands down. And those sales numbers don't include VHS and DVD sales – but keep in mind that "Vice City," published by Take Two Interactive Software (TTWO: Research, Estimates), is still topping the sales charts with only one serious competitor coming its way anytime soon (Nintendo's "Legend of Zelda"). And future installments of "Grand Theft Auto" are on the way (expect an official announcement at this year's Electronic Entertainment Expo in May).
"Vice City" was last year's most notable success story, but the entire industry has reason to celebrate the year-end numbers from NPDFunworld. Game sales were up 7 percent in December (substantially better than the retail industry's 1.2 percent rise). Total game software sales in 2002 were up 21 percent. That's in line with what most analysts were predicting (though some were a little disappointed). The industry, as a whole, took in $10.3 billion, according to Mike Wallace of UBS Warburg. That's a 10 percent overall jump (including hardware sales).
Historically, the gaming industry usually starts to plateau around this time. Three years into a console's life cycle (as Sony currently is with the PlayStation 2), it has a fairly substantial user base and hardware sales begin to taper off. Software sales continue to increase, though, as people put together a library of games, then start to slow in the fourth and fifth year, as the next generation of console systems start coming out.
But this cycle has been anything but traditional. Instead of two consoles duking it out for your dollar, there are three. While the increased competition would seem likely to drive prices down faster, the industry has actually managed to hold prices higher than ever before, thanks to continued demand. The PlayStation 2 still costs $199, while the original PlayStation had seen its price drop to $149 by this point in its cycle.
Software sales have also held a high price point longer than before. Top 10 games are always in the $50 range, but less popular titles usually have lower prices by this stage. So far, the industry has managed to keep $50 price tags on most games during this cycle (though expect casual audience games to fall to $39 sometime this year).
Analysts are fairly confident the growth will continue in 2003. Sony (SNE: Research, Estimates), Microsoft (MSFT: Research, Estimates) and Nintendo are expected to drop retail prices on their machines by mid-year, which should stimulate further hardware sales – and, as a result, software sales.
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"I think we've got the seeds for solid growth over the next couple of years," said Stewart Halpern, managing director and analyst for RBC Capital Markets.
Halpern said he expects software growth for current generation consoles to grow by 25 percent in 2003 – and sees software sales for all platforms growing by 15 percent. Deutsche Bank analyst Jeetil Patel told Reuters he is calling for industry growth of 13 percent this year, though he added that cautious consumer spending might put that projection at risk.
The gaming industry still has a way to go before any title can come close to challenging the $600 million box office totals of "Titanic" or "Star Wars"' $460 million. But Harry Potter might want to start looking over his shoulder. "Chamber of Secrets" took in $255.4 million. That's not out of striking range for the citizens of "Vice City."
--Reuters contributed to this story.
Morris is Director of Content Development for CNN/Money. Click here to send him an e-mail.
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