JULY 1, 2008 • The Entertainment Merchants Association released its annual report and noted that the video game industry has surpassed DVD sales in U.S. revenue for the first time. Compared to the $18.85 billion in video game revenue the NPD Group reported for calendar year 2007, DVD revenue for last year totaled $16 billion, according to the Digital Entertainment Group.

Impact: DFC Intelligence has been seeing these types of comparison reports since the mid-1990s.  The tendency is to compare Hollywood revenue with game revenue.  However, generally this is rarely done on a far basis.  For one, game revenue almost always includes hardware revenue.  The DVD revenue does not include either DVD hardware sales or DVD rental.  It also does not include box office revenue, cable revenue, pay-per-view or advertising revenue.  In short, Hollywood film entertainment is still FAR larger than the video game revenue.  A much stronger comparison would be between video game software sales and recorded music sales.  In this case the video game industry is rapidly catching the music industry.