Much Growth Left in the Gaming Industry There Is

[nintendo_fanboy]

As much as I like your idea of expanding the market so immensely, you'll have to take it in another relation too.

First, you can't compare cost and time needed of video games and home videos.
Here in Switzerland, as in Germany too I think, games cost about five times more than DVD's. Also, watching a DVD needs you to invest about two hours, while playing a game takes you more like ten hours.
Both of this factors lead to a lower attach rate. If there would be the same amount of gaming consoles as there are DVD players, software sales still couldn't compare against DVD sales.

Also, the music industry which is definitely big too despite struggling against illegal downloads etc. is apparently comparably small to the home video industry, since, if I remember correctly, Michael Jacksons Thriller is the best selling album ever with sales of about 40 million worldwide. I have no source for this though, so maybe I'm mistaken, but I know for sure that selling a million copies of an album worldwide is definitely considered a success.

So in general, I completely agree with you, but we should not overestimate the potential volume.