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Has the "million seller" status lost its significance?

Forums - Sales Discussion - Has the "million seller" status lost its significance?

There are games this gen that didn't hit break even at 5m sales - Red Dead Redemption, GTAV and GTAVI.

I would imagine it's true for games like Destiny that anything below 5m will be considered a failure and really they're expecting to hit the 10m+ mark. Destiny is a bit of an exception as Activision really only put all of nothing into their launches, and they're putting absolutely everything behind that game, but still once one publisher starts to play this big budget gambling game it won't be long until others are forced to join.

One expense that's exploded you forgot about is marketing - in the NES / SNES era games had adverts but it wasn't really a big thing. Marketing budgets today can far exceed development budgets (I think COD:MW2 was over $200m) - and that can quickly turn a break even point well beyond the 5m market let alone 1m. I think developement budgets are going to somewhat plateau this gen - with easier hardware to develope on and no real 'rise' in resolution - but marketing is gonna go up up up.



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When games have to lower their retail price, become part of a bundle, or sell a quarter of a milliom across four or five platforms just to reach that number, then yes. I don't think they earned any of the prestige that a legit million seller has.

If the game makes a profit and sells a million on its own at full MSRP, then it's a winner.



It's a great question and there's quite a few great answers in the thread, but the OP cuts it all too short by answering the very question being asked...

I wonder what publisher still profits by selling 1m copies of a game. Nintendo must have back in the Wii days, but does that hold true now as well? And I guess indies are happy as Hell when selling 1m; but is there anyone else?



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DanneSandin said:
It's a great question and there's quite a few great answers in the thread, but the OP cuts it all too short by answering the very question being asked...

I wonder what publisher still profits by selling 1m copies of a game. Nintendo must have back in the Wii days, but does that hold true now as well? And I guess indies are happy as Hell when selling 1m; but is there anyone else?


 Capcom seemed pretty happy with Dragon's Dogma and that was around the 1m mark, and definitely had a bigger budget feel to it then most indie games or Wii games. Games tend to carry a higher retail price in Japan though, so large Japan sales can generally translate to higher revenue then the equivelent for a $60 game in the USA or European equivalent. 

 I think a lot of games that Konami, Namco, Capcom etc make in Japan are fine with the 1m (Full price) sales threshold, for games which arn't part of their bigger franches (RE, MGS). Afterall games like Yakuza and Tales are apparently huge successes and are at the 1m mark. I really doubt any western developer uses that metric anymore however.



The OP says some games have cost their publisher billions. Can he name a few for me?



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Player2 said:
radishhead said:
a million is still a big deawl for a loet of games - jsut bec ause some games sell 20+ million doesn't mean tejhat the boundary has been lowered in my opinion.

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Shadow1980 said:
It's true that in generations past if a game sold a million copies it was a huge milestone. During the 20th century, only a small handful of games sold over 5 million copies. In fact, SMB3's 18 million copies was utterly mind-boggling for a game that wasn't originally bundled. If you compare it to the size of the market back in 1990, it was proportionally speaking perhaps the most popular game ever. And most games had six-figure budgets well into the 90s, with the biggest expense by far being the cost to manufacture the cartridges (though unlike dev costs, manufacturing costs are included in the price). With budgets that low, it's hard to see how any halfway popular game was wildly profitable, and games like SMB3, SMB2, and Zelda I & II are perhaps among the most profitable console games ever relative to budget size.

While budgets have gotten very big over the years, for the average game, a million copies should be more than sufficient for it to be profitable. Assuming every copy is sold at full price, you're talking about $60 million in revenue, while the average game budget is estimated to be around $20-30 million. Assuming video games follow the standard Hollywood rule where a film needs to make at least twice its budget to be considered "profitable," then a million should suffice for most titles. I have no idea if that same rule actually applies to games or not, though, so don't quote me on that. Of course, the bigger the game's budget, the more it needs to sell. A game that costs $100 million to make would need to sell 3.33 to 5 times as many copies as a more average-budgeted game in order to be profitable.

Even in the current era where games cost eight-figure sums to make, so long as they are budgeted properly, there's no reason why they can't get away with selling one or two million copies, which is a milestone even many niche titles can reach nowadays. If you get situations like when Tomb Raider or Resident Evil 6 sold several million copies in their first couple of months and still were regarded as disappointments sales-wise, then someone did something wrong at some point. BioShock Infinite had comparable sales to Tomb Raider, yet 2K thought that was pretty good. If the average game can sell several million copies and not be considered profitable, the the publisher has no one to blame but themselves. One should never spend more than you can possibly hope to make back. You take a big risk and it doesn't pay off, too bad. Should have thought about that before you blew all that money on a game that had no chance of selling 8 million copies in any time frame.


 "Assuming video games follow the standard Hollywood rule where a film needs to make at least twice its budget to be considered "profitable," then a million should suffice for most titles."

 

In regards to Hollywood films that's "breakeven" not profit.



Its still a significant milestone for smaller games with a smaller budget. I think a few things have made it look not as important though.

We have games selling 10+ Million in a Week, which makes the long trawl to a Million for some games look insignificant in the grand scheme of things.

We have more games now being led by incompetant people. For example see Tomb Raider, Sleeping Dogs and Hitman Absolution. Now, all of these games sold over a Million and looking at the sales of each youd think they would have been a huge success for Squeenix.

All of them sold relatively well, yet SE were unhappy - http://www.vg247.com/2013/03/26/square-financials-tomb-raider-hitman-sleeping-dogs-fail-to-hit-sales-targets/ - Clearly down to mismanagement at the top when you look at sales of past games in the TR and Hitman series'.

Budgets need to be handled better, the corporations need to be realistic.



Essentially, yes. Budgets and marketing costs have risen exponentially since the 2000's. A $5m game sells 1m copies is far more impressive than a $15m game selling 1m copies.

However, a game selling 1m first week is certainly a mile stone this gen. 



DanneSandin said:
It's a great question and there's quite a few great answers in the thread, but the OP cuts it all too short by answering the very question being asked...

I wonder what publisher still profits by selling 1m copies of a game. Nintendo must have back in the Wii days, but does that hold true now as well? And I guess indies are happy as Hell when selling 1m; but is there anyone else?


As far as I know Fire Emblem Awakening needed to sell 250 000 units to break even.