Ticket revenues slumped by a third, grossing HK$284 million (US$36.4 million) compared with HK$421 million in 2004, according to Hong Kong's Motion Picture Industry Association.
The industry released just 55 films -- the lowest number in a decade -- and well down on the 64 that hit cinema screens the year before.
去年電影產量共五十五部 — 創十年來新低 — 也比前年的六十四部少。
Piracy and the inability of moviemakers to meet the changing tastes of local audiences in the face of big-budget Hollywood blockbusters were blamed for the decline in fortunes.
Only two local films made the year's top ten earners: car racing action flick“Initial D”which grossed HK$37.86 million and“Wait Til You're Older”starring heartthrob Andy Lau with HK$20.2 million.
Action hero Jackie Chan's“The Myth”proved a major flop, grossing HK$17.1 million.
The figures were in sharp contrast with 2004 when box office revenues soared, led by Stephen Chow's “Kung Fu Hustle,”which was the city's highest grossing film ever with a take of 61.3 million dollars.
“Piracy definitely has played a major role in this. More people watch pirated DVDs and films from illegal downloads (on the Internet),”said MPIA chief executive Woody Tsung, blaming rampant piracy in the territory.
“It's very difficult to make films nowadays. If you make 10 films, you will make a loss in nine films. You don't make enough money,”Tsung said, predicting little upturn in fortunes in 2006.
A local film critic who goes by the name Longtin said a change in audience tastes had also contributed to the poor box office performance.
“There are more and more people who like to see Hollywood films and their taste of films have been influenced by Hollywood and this has become a benchmark standard for them to judge whether a film is good or not,”he said.
“It's not just a problem in Hong Kong, it's a problem all over the world,”he said.“Hollywood produces bigger projects with big stars which local productions can't match.”