In yesterday’s call discussing Q1 results, Take-Two stated that they felt that the start of the summer movie blockbuster season would not impact the sales of their highly anticipated GTA IV. On the flip side, there has been some discussion over whether there will be a negative impact on the box office returns of the similarly anticipated Iron Man. An analyst at Janco Partners suggested that the April 29th release of GTA might affect the sales of the May 2nd release of Iron Man. How likely is it that a video game premiere will disrupt the premiere of a highly awaited movie?
Mike Hickey of Janco Partners, in a note on Marvel’s stock, pointed out the reduction in the box office when Halo 3 was released:
“The last significant video game release, Halo 3, generated over $300 million in sales from its first week in the market,” he added. “Halo 3 was released on just one platform, the Xbox 360, and attached nearly 50 percent of the installed base. GTA IV will be released on both the Xbox 360 and PS3, which have both significantly increased their installed bases since the release of Halo 3. A GTA IV 25 percent attach rate to a combined Xbox 360 and PS3 installed base at its April 29 release would imply 5.8 million units sold or roughly $360 million in retail sales the first week of the game’s release.”
Hickey does an excellent job of breaking down the potential sales of GTA IV, and undoubtedly the film and the game both share the same target demographic of 18-34 year-olds. This sort of analysis falls short upon a closer look at the films that Halo 3 impacted when it launched. Back in October, when the film industry was crying foul, the main movie whose bottom-line experienced the hurt was The Heartbreak Kid according to Shacknews:
Halo 3 amassed upwards of $300 million for publisher Microsoft in the week following its September 25 release, with over 2.7 million gamers hopping online and racking up more than 40 million hours of play across the same time span.
That’s a worrying figure for the film industry, which saw ticket sales reduced by 27% for the weekend of October 5 over last year, resulting in paltry total revenue of $80 million. Couple that with the less-than-stellar performance of The Heartbreak Kid–the latest directorial effort from Dumb & Dumber writers Bobby and Peter Farrelly (pictured left)–and it’s got Hollywood sweating over the eternal struggle between games and movies.
I hate to impugn the reputation of the Farrelly brothers, but The Heartbreak Kid was almost universally panned and dismissed as a poor remake of the original film. The film industry might have tried to pin the blame on Halo 3, but the audience buying Halo 3 has virtually no overlap with the audience of The Heartbreak Kid. Any sliver of overlap would likely have come from girlfriends who might have dragged their boyfriends to see the movie. So, all griping aside, it is unlikely that the box office drought was a result of competition with the video game industry. The movie industry would do better to look at the quality of the releases than at video games.
Of course, this begs the question of whether Hickey might right in the case of Iron Man and GTA IV. After all, their demographics line up. Video game fanboys and comic book fanboys often share the same time-space location. Will those fanboys have enough time and energy to devote hours to GTA IV and still find time to watch Iron Man?
Yes.
Of course.
I have never in my life as fanboy ignored a big movie release because of a video game. I have stayed home when I should have been going out to parties to beat some iteration of Final Fantasy, but that’s just a matter of my social ineptitude. A movie takes two hours to watch. Rockstar claims that GTA IV will take over 100 hours to complete. Gamers are not going to pick up GTA and ignore the rest of their lives until they complete the game. Even if people aren’t necessarily waiting in line like they would for a Star Wars premiere, the film will still be a box office success on its opening weekend. The main benefit of a film like Iron Man, which is–to some extent–an event, is that it is a communal experience. Entire enclaves of fanboys will go to see the film en masse.
Video games are played in the privacy of the home with, at most, a few other people watching or playing along. A movie is watched with an audience, and viewing a movie with an audience of like-minded people is an experience that fanboys across all spectra anticipate. Gamers will put down their controllers, walk out into the waning light, and stand in line for Iron Man. Neither the sales of GTA IV nor Iron Man will be affected.
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