Substitution Effects and Grand Theft Auto 4

Now, I'm not much of a video game player, but Grand Theft Auto 4 hit the shelves at midnight this morning. Evidently this is a very big deal-- I remember the first Grand Theft Auto being comical in its forwardness combined with its generally clunky graphics (always a good combination, by the way, and it was a while ago). The CNN article quotes someone that claims this could be one of the top three selling game of all time. Given the success of the Madden series, and Halo, even Super Mario Brothers back in the day...that seems like a big statement to me.

But I heard an interesting possibility on the radio this morning. Ironman, the new action flick featuring Robert Downey Jr., is set to be released into movie theaters this Friday, and people are predicting that the movie will take a nontrivial hit to its sales due to the release of Grand Theft Auto 4. Now, equivalence tells me that in the long run, everyone that wants to see the movie will end up seeing it-- I don't think people exist that want to see it in the first weekend or not at all. (Am I wrong? Perhaps other new movies would crowd it out down the line, but if you're watching that many movies in the first place, you'll find time to watch a movie you want to watch.) This may end up with more people watching it on DVD instead of in the theaters-- I'm guessing that on net that may cost studios. The biggest impact, though, would be the fact that the studio can't advertise for the second week that it was the top grossing movie in the first week. I think movies can generate some momentum based on previous sales, and if the game has the impact that people think, it prevents the movie from generating any week-to-week push in the first place. I'd say this would be the largest impact.

It impossible to make an accurate estimation of the impact, of course, since we don't know who would have otherwise seen the movie. But substitution effects are oftentimes a lot wider than we describe in our lectures.