That's a common misconception promoted, unfortunately, by people in the games industry who are out of touch with reality.
Games are not even close to the size of the movie industry. When people say the games industry is larger than the movie industry, what they're doing is comparing apples and oranges. They're comparing box office revenue for movies to box sales for games. Makes no sense.
A more accurate comparison would be comparing box office revenues to arcade revenues, or box game sales to box movie sales (ie DVDs). In both cases, the movie industry crushes the games industry.
If you add up the total size of the movie industry and the total size of the games industry, the movie industry is still multiple times the size of the games industry. The difference is that the games industry is growing a lot faster.
--matt
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