Video games set to outgun Hollywood

Computer games are fast becoming more lucrative than films and the phenomenon will only grow.

Call of Duty Black Ops is example of the runaway success of the gaming industry. Courtesy Activision

The film industry is rapidly being eclipsed by the computer gaming business. The video game Call of Duty: Black Ops crossed the US$1 billion (Dh3.67bn) sales mark just six weeks after its November release in the US and the UK. Call of Duty: Black Ops, published by Activision, broke the $550 million record set by Call of Duty: Modern Warfare 2 last year.

It also broke the first-day sales world record for any film, book or game. Over the first 24 hours of its release across the US and the UK, it generated $360m. It then broke the five-day sales record, pulling in $650m.

Call of Duty: Black Ops is developed by Treyarch and published by Activision. It has been released for PCs using Microsoft, PlayStation 3, Wii and Nintendo DS consoles.

Black Ops is the seventh game in the hugely popular Call of Duty series. Within six weeks of its November 9 release, Black Ops had logged 600 million hours of gaming time. The title Black Ops is short for black operations, a term first used by the US military during the Cold War to describe highly clandestine, possibly illegal, operations. In many cases, no records are kept of black operations.

This shroud of secrecy has excited the imaginations of computer gamers and developers. But the US military has developed a curious synergy with the computer games industry. It has admitted to using some off-the-shelf war games to train military personnel. Some of the games manufacturers already use the military to endorse their products. But last year, the US military banned a game called Medal of Honour from its bases because of the role played by Taliban characters.

The advertising trailer for Call of Duty: Black Ops opens with a businesswoman strolling across a horrifically realistic battleground carrying a designer handbag and a gun. The devastated landscape gradually fills with other "gamers". However, most gamers are male. And because the game costs about $60, most of the buyers are not children or teenagers but young professionals.

"Americans spend a lot of time playing games, and not only the young … All generations spend about seven hours a week playing PC games, but younger consumers top this up with playing games on consoles, handhelds and mobile phones," says Reineke Reitsma, an analyst with Forrester Research. "Generation Y spends close to 20 hours a week playing games."

Generation Y generally refers the demographic of young adults to 35-year-olds. The fact that most are male is also evidenced by the growing chorus of "computer widows" - women who complain that their male partners spend too much time playing games. There are also growing reports of young professionals losing their jobs as a result of missing work to continue playing online games.

A study by the Stanford University School of Medicine in the US found the "reward centres" in male brains were more activated than those in female brains by video game-playing.

"These gender differences may help explain why males are more attracted to, and more likely to become 'hooked' on, video games than females," the researchers wrote.

But the demographic of the video games industry customer base is one of its greatest strengths and contrasts markedly with that of movie-goers. After the advent of television in the second half of the 20th century, Hollywood began to specialise in making movies aimed at teenage audiences. While people of all ages go the movies, the bulk of the US audience is generally composed of people in their teens and early 20s.

This presents Hollywood with a growing problem in an age when young people are increasingly reluctant to pay to watch films when they can download them illicitly from the internet free of cost. The movie industry has successfully lobbied legislators to impose draconian penalties for infringement of Hollywood's copyright. Nevertheless, the US film industry is haemorrhaging money as more young people opt to watch films free online.

But the video gaming industry is more fortunate. Despite the hefty price tag on popular new games such as Call of Duty: Black Ops, most loyal customers seem willing to pay the full price rather than take the risk of uploading a corrupted pirate copy of a new game.

In just a couple of decades, computer gaming has grown from an amateurish hobby into a multibillion-dollar global industry, totting up estimated US sales of about $20bn last year.

The success of the computer games industry is also starting to generate the kind of legal battles normally associated with the IT giants. Activision is adding one of the biggest computer games developers, Electronic Arts, to a $400m-plus lawsuit over the defection of two of its former executives who helped to develop the Call of Duty franchise.

The industry's big challenge will be to take its success to other markets such as the Middle East. According to analysts, there is great potential for growth in the region, where western games are already popular in countries such as the UAE and Iran. But Middle East gamers are currently poorly served when it comes to Arabic-language content.

For the region's video games industry really to take off, it needs to spawn its own developers on a par with Activision. Doing this would enable the Middle East not only to develop powerful domestic computer gaming industries, but also to produce gaming content more suited to local sensibilities.