Hollywood Pours Billions Into Gaming as Movie Budgets Soar While Profits Shrink

According to Variety’s May 2025 Video Game Industry Report, the video games industry could hit a projected high of $186 billion and continue to grow over the coming years. The main contributors to this growth is predicted to be the Nintendo Switch 2 slated for release in early June 2025, and the release of GTA 6 in May 2026. As total box office earnings in the United States and Canada has started to slide with total earnings for 2024 coming in at around $8.56 billion, down from $8.91 billion the previous year, it’s only natural for movie studios to look for more sources of income.

With the average big budget movie coming in at around $100 million to make, there’s enormous pressure to sell ticket for return on the investment. An indie video game can range in budget anywhere from $50,000 to $500,000 while AAA titles often exceeds the cost of movies with budgets going over $100 million, but this is mainly to do with the time needed to make the game. Still, more people are spending more time gaming than watching movies.

This hasn’t gone unnoticed by streaming companies like Amazon and Netflix. Amazon’s games division has seen a 37% budget increase year-on-year, driven by the success of Lost Ark and the continued support of New World. Netflix, which currently had 86 games available by the end of 2023, with 90 more in development, including 10 in-house titles, has invested $1 billion on gaming according to analysts. These figures represent a fundamental change in strategy. Entertainment executives are no longer treating games as promotional add-ons. Instead, games are viewed as potential revenue engines with superior engagement.

Hollywood’s Involvement in Gaming

Since Netflix entered the gaming arena three years ago, the company is still trying to find its footing. Its AAA studio shut down without releasing a single title. Instead, Netflix shifted focus and now prioritize releasing games related to the company’s original streaming shows.

Sony is an entertainment and electronics company with diverse revenue streams. In 2024, the company generated roughly $1 billion in the US and Canada from the box office, while the gaming sector raked in close to $28 billion. Granted, this relates to both sales of PlayStation consoles and games. In December 2024, the number of active users across PS platforms increased by 5% year-on-year to reach 129 million accounts.

IP is Flowing From Games to Hollywood – Not The Other Way Around

There’s been a shift over the years for games to end up as movie adaptations or TV series rather than vice versa. The most prominent and recent one is A Minecraft Movie which had a budget of $150 million but has already clocked in close to 500% return on the investment with worldwide earnings coming in at close to $900 million. According to Variety’s report there are still untapped video game IPs that could get snapped up by Hollywood.

The three most obvious ones pointed out in Vanity’s report are Fortnite/Roblox, Call of Duty, and Grand Theft Auto: “Roblox earned nearly $1 billion in revenue over the last holiday quarter, sporting 85 million daily active users, while Fortnite counts hundreds of millions of registered players,” the report said. “Then there’s Call of Duty, which counts over 500 million unites sold and had its biggest launch ever last fall.”

Grand Theft Auto VI was recently pushed until May 2026, which would give ample time to start filming and release it as a movie alongside the game.

As traditional entertainment struggles to maintain profitability, gaming has become not only the financial backbone but also the creative frontier in the industry. The trend is clear: the future of storytelling, revenue, and global reach belongs to video games.