Guitar Hero III

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One Billion Dollars.  Say it with me.  One Billion Dollars.  That’s a ton of dough, friends, and most everyone reading this has contributed to this sum in one way or another.  This is what Rock Band, published by Harmonix, has made in just 15 months of existence.  That’s not a fluke either, when you consider Activision’s Guitar Hero III also crossed the billion dollar mark earlier this year.  Plus, Rock Band claims to have had 40 million tracks downloaded for their game franchise.  So, if you’ve purchased one of these games, or jammed out playing at a friend’s house, you’re a part of the money making machine.

That’s a ton of revenue, and we’re just taking about a couple of games that while entertaining, are just rhythmic button tapping at their core.  So, with this in mind, is the video game market outpacing the music market?  In North America, physical and downloadable video game content equaled $10.9 billion dollars, up 26% from 2007.  The physical and downloadable content of the music world, in comparison, made $12.8 billion dollars, down 1.6% from 2007.

You could say that the modern idea of the music industry is getting to be a hundred years old, if you go back to the composers of the teens and twenties.  They made money off the sales of sheet music, and were fighting against the radio, which at that time was playing recordings of their songs without payment.  With that in mind, you could also argue that anything a hundred years old would be on its way out unless it reinvents itself.  Today, we have the music industry in a similar situation, trying to find a balance between physical and downloadable media.

Meanwhile, the home video game industry (which is closer to thirty years old) embraces downloadable content with both arms, with no foreseeable side effects from a switch from their current physical medium.  Plus, keep in mind that you have to have a compatible piece of hardware to run these games, which further cements the consumer’s investment and commitment to that product.  CDs and MP3s are a more universal medium, and while the hardware required to play them is much cheaper, the numbers above don’t lie.

It’s clear to market annalists that if we’re are indeed in a recession, depression, or whatever you want to call it, the masses require a form of escapism.  And as far as entertainment goes, movies, music, and books are a passive experience.  Video games, however, actively take your attention, and entertain you while engaging your brain to make decisions.  So while it costs more to own computer or console than it does a CD or MP3 player, games are gearing up to make more money than music.

What’s my point in all of this?  If you were that kid growing up… you know, the one with the Commodore 64 with a box full of pirated games that somehow appeared out of nowhere, or ever wished for that damn Power Glove… owned an N64, TG16…  even a 3DO, you can finally stand up and give the finger to the kids that thought they were better than you because they spent their time listening to Van Halen and Metallica.  Because, deep down, you know that if they ever showed up at your place one night, you’d whip their ass in Guitar Hero.  Now who’s laughing?

So what do y’all think of the video game market?  Do you own stock on any of the tradeable companies?  Think it’s a safe bet for the future, or do you feel better just owning the products?  Toss some Monkey and let us know.