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caffeinade said:
shikamaru317 said:

Eh, I'd rather have lootboxes and the like than see the price of games go above $60.

 

The point of the thread is basically to point out that we can keep the price of games at or lower than $60 USD, whilst bringing record breaking profits.
And not have lootboxes.

My problem with this thread though is that you say that but then move on to say that the devs need to make good dlc to make money off a game...

A ) if devs really saw main line titles as "loss-leaders" then they would use microtransactions to make the money back, since that is the easiest thing to do, and beyond that it wouldn't require seperate marketing and development budget like good expansions or standalone dlc would 

B ) your data actually shows that developers *don't* need to have triple A titles as loss-leaders, because Horizon had a huge digital attach rate (27%) and sold 3.4 million in two months 

Even your Tomb Raider data goes against your idea of a loss leader, since despite Squenix's unrealistic expectations, there is absolutely no way the title took more than 30$ mil to develop and 60 to market(and it was probably more modest then even that). 

Your idea of loss-leaders and making a profit off just a game is kind of contradictory, unless your point is that games that don't make back money should become a loss-leader, in which case we've seen this happen and that's when conglomerates start making titles F2P or add microtransactions cause "boohoo our wallets are sad"



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shikamaru317 said:
caffeinade said:

The point of the thread is basically to point out that we can keep the price of games at or lower than $60 USD, whilst bringing record breaking profits.
And not have lootboxes.

Ah, well then I agree with you there mostly. It's one thing to have cosmetic lootboxes in a multiplayer shooter for instance in place of paid DLC maps. It's another thing entirely to start stuffing microtransactions into singleplayer games like many publishers have been doing lately (Shadow of War being a prime example) on top of planned paid DLC. As well as Shadow of Mordor sold (most likely over 7m lifetime including digital, plus DLC sales), there is literally no reason for it other than pure greed on WB's part.

Lootboxes could be decent, if they provided a layer of fun for everyone involved.
But as they are, they are just used to milk more money from our wallets.

https://www.youtube.com/watch?v=QOtWvFsY2vk
This added a layer of fun to the game.
It gave us more content, a good ol' laugh and did not take away from the game.
Mercedes got a really cool ad out of it.
Nintendo got paid.

Everybody won here.



You're expecting them to get way too much money par game in your calculation

Out of a 60$ Game, only 27$ are left to the publisher. At 40$, I expect them to only get about 15-18$ per game sale

Still, that's a lot per game. But yeah, to recoup  50Million They would have to sell about 3 million copies at a 40$ median pricetag outside of aby additional content.



caffeinade said:

I don't have an opening to this thread so...

Didn't Horizon Zero Dawn only cost ~50 million USD?
I am not sure if that includes marketing, but lets say it does not.
Add another $50 million USD to that figure, to reach $100 USD.

Any game that is decent, looks like $50 million dollars and has $50 million is marketing, is pretty much guaranteed to sell over three million units.

Lets assume that the publisher (taking out platform fees later) gets three quarters of the opening price ($60 USD) for each unit sold so $40.
We are taking into account retail's cut and price drops, but remember there are special editions too.
Digital distribution has a higher margin, so there is that too.
The way I got this number (mostly guess work) is due to the fact that a game sees a decent chunk of its sales in the first week or so.

3 million * $40USD = 120 million USD.
Take away 30% for platform fees.
Leaving 84 million USD to cover the $100 million USD development + marketing budget.
There is basically no way for a game to fail if it is handled sensibly.

Remember these numbers are Way off, most AAA games will sell one or two million units within three months, and before any price drops.
Hell even Mass Effect Andromeda will hit two million sold before 12 weeks(if it hasn't already).
Though it is likely they have dropped the price at least once to trick people into buying the game.

Rise of the Tomb Raider (Which was for one year a XOne, X360, PC Exclusive):
X360 = 0.35 million units.
Rise of the Tomb Raider (Xbox 360) - Sales, Wiki, Cheats, Walkthrough, Release Date, Gameplay, ROM on VGChartz

XOne = 1.54 million units
Rise of the Tomb Raider (Xbox One) - Sales, Wiki, Cheats, Walkthrough, Release Date, Gameplay, ROM on VGChartz

PS4 = 1.73 million units
(And was released one year after the other versions)
Rise of the Tomb Raider (PlayStation 4) - Sales, Wiki, Cheats, Walkthrough, Release Date, Gameplay, ROM on VGChartz

PC, Steam = 1.81 million units
(Remember this is not the only place to get the game on PC)
http://steamspy.com/app/391220

This equals about 5.43 million units sold.
5.43 million units * $40USD average sale price
= 217.2 million dollars
Now reduce that by 30%
152 million USD remains.

Remember that selling games directly is not the only way that a publisher can make money (Besides Lootboxes and DLC).
Merchandise, exclusivity deals, the licensing of tech, cross promotion deals (Assassins Creed X Final Fantasy), movies, marketing deals (Destiny 2 and Playsation, Assassin's Creed (the new one) and Xbox), In game advertisement / Product placement.

DLC, like expansions and added campains (which do not take anywhere near the effort of making a full game) are a decent way of making a game profitable.

AAA landmark titles should be treated as loss-leaders.
You should use a high quality title to attract people to your brand.
While you use the tech, assets, ect to profit off a job well done.

Spinoff titles, standalone DLC and dumb stuff like Nintendo's free Mercades Mario Kart 8 DLC are the way to go for consumer friendly money making.


Trying to force every part of a game to be profitable is not sustainable.
I hope you enjoyed the read.

You provide no argument why AAA games should be treated as loss leaders. AAA games are very lucrative, thats why they keep making them. Especially landmark AAA titles like Horizon are no loss leaders, they actually make the biggest money, indirectly as well. Horizon is one of the reasons PS4 is having its best selling year.



VAMatt said:

I seriously doubt that the average AAA game sale returns $40 to the publisher.  That's probably about the average retail price at which a game is sold.  Maybe $50 for games that stay at full price for a long time.  

 

Then the retailer has to get a big chunk - at least 25%.  In some cases there is a distributor who takes a chunk, but let's leave that out for now.  We still have distribution costs, manufacturing costs, the publisher, and the developer who have to get paid out if that remaining 75%. 

Looking at price charts over time for the game 40$ seems a fair average for the relevant timeframe around launch.

HDZ  released at 60$ in the beginning of march and then started a slow decline, until  by the beginning of june it hit 40$, where it has pretty constistently stayed ever since.

HDZ sold 2.6 including digital within it's first two weeks on the market, at a 60$-55$ dollar pricepoint. On average, with sales being tilted towards launch that probably works out to a 58$+ average for those first two weeks.

As of April 30th when we arrive at the 40$ pricepoint it had sold over 3.4 million. So thats a 55$ - 40$ decline over the following six weeks in wich 800k units of the game were sold. We will take a perfect average here, ignoring that the digital price probably didn't deteriorate as fast and the game stayed at 60$ digital for longer, so 50$ average for the following six weeks of sales.

The retailer cut is 10$ - 15$ as previously stated, so lets assume 15$ for the purposes of this calculation. Shipping, manufacturing and packaging can be comfortably estimated at 5$ per unit.

58$ - 15$ retailer cut - 5$ packaging, shipping an manufacturing = 38$ before licensing fees are deducted those are 30%, or 11,40$ in this case.

38$ - 11,40$ = 26,60$ This is the publisher cut in the first two weeks.

26,60$ x 2.6M = 69.160000

Same considerations for the following six weeks with 800k of sales:

30$ - 9$ = 21$

21$ x 800k  = 16,8M

Publisher cut before sales price in store hits 40$ is: 85.96M. Pretty damn close to what was assumed in OP.

In HDZ case it has seen a steady sales price of 40$ since, so on every sale from may going forward they make 14$ (this is after licensing fees). At that rate it would take them 1M additional copies sold LT to reach pure profit. Something that HDZ is likely to achieve with it's first holyday.

According to VGC it's at 3.4M retail currently and was at 2.8M retail on April 29th, so it should be at least at 4M sold by now.

Add to that that HDZ has a huge 27% digital attach ratio (wich someone smarter and better at math than me could probably unfangle). Their overall profits should tend to be higher than this calculation rather than lower.



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SuperNova said:
VAMatt said:

I seriously doubt that the average AAA game sale returns $40 to the publisher.  That's probably about the average retail price at which a game is sold.  Maybe $50 for games that stay at full price for a long time.  

 

Then the retailer has to get a big chunk - at least 25%.  In some cases there is a distributor who takes a chunk, but let's leave that out for now.  We still have distribution costs, manufacturing costs, the publisher, and the developer who have to get paid out if that remaining 75%. 

Looking at price charts over time for the game 40$ seems a fair average for the relevant timeframe around launch.

HDZ  released at 60$ in the beginning of march and then started a slow decline, until  by the beginning of june it hit 40$, where it has pretty constistently stayed ever since.

HDZ sold 2.6 including digital within it's first two weeks on the market, at a 60$-55$ dollar pricepoint. On average, with sales being tilted towards launch that probably works out to a 58$+ average for those first two weeks.

As of April 30th when we arrive at the 40$ pricepoint it had sold over 3.4 million. So thats a 55$ - 40$ decline over the following six weeks in wich 800k units of the game were sold. We will take a perfect average here, ignoring that the digital price probably didn't deteriorate as fast and the game stayed at 60$ digital for longer, so 50$ average for the following six weeks of sales.

The retailer cut is 10$ - 15$ as previously stated, so lets assume 15$ for the purposes of this calculation. Shipping, manufacturing and packaging can be comfortably estimated at 5$ per unit.

58$ - 15$ retailer cut - 5$ packaging, shipping an manufacturing = 38$ before licensing fees are deducted those are 30%, or 11,40$ in this case.

38$ - 11,40$ = 26,60$ This is the publisher cut in the first two weeks.

26,60$ x 2.6M = 69.160000

Same considerations for the following six weeks with 800k of sales:

30$ - 9$ = 21$

21$ x 800k  = 16,8M

Publisher cut before sales price in store hits 40$ is: 85.96M. Pretty damn close to what was assumed in OP.

In HDZ case it has seen a steady sales price of 40$ since, so on every sale from may going forward they make 14$ (this is after licensing fees). At that rate it would take them 1M additional copies sold LT to reach pure profit. Something that HDZ is likely to achieve with it's first holyday.

You are forgetting one thing here. Sony is the publisher so there is no publisher cut. They developed and published the game. Sony owns Guerilla so they are funding development and marketing. 

So the actual calculation is as following: total amount - retail - distribution

So out of 60 dollars average price (not taking into account other currencies) we have about 2.5m retail copies at that price (60-15-5) = 100m and then an average of 900K digital at 60 dollars = 54m which brings us a total of 154m revenue for Sony on Horizon. Then we have probably another million at an average price of 30 dollars and taking into account special and collector's it's safe to say the revenue for the game by now is hitting 200m almost --> with that development is paid, marketing is paid and also other costs looking into worldwide studios, sony corp etc. but it already made a good profit and will do so till the end of the year. 

Selling 5m copies within a year is succesful for most AAA games. Then you have those from EA, Activision, Rockstar etc. that need to do 10m 

But then you have the AAA league that needs smaller sales since the budgets were smaller. Like 1 up to 2 million



Stories unfolded with my home made rap songs. Feel free to listen here with lyrics: https://youtu.be/vyT9PbK5_T0

We dont have any new sales figurs for Horizon Zero Dawn do we?

Last we heard anything? was back April 30th, when it was over 3.4m units sold through.
So its first 2 months where pretty good.

7 more months have passed since and HZD has been doing okay on Amazon ect for a long periode of time.
Wonder what sales are like for it now? 6m? more?

Anyways I have no doubt they turn a big profit from it.

Its possible to do a good single player game, without tons of micro transactions, and still be profitable.



JRPGfan said:
We dont have any new sales figurs for Horizon Zero Dawn do we?

Last we heard anything? was back April 30th, when it was over 3.4m units sold through.
So its first 2 months where pretty good.

7 more months have passed since and HZD has been doing okay on Amazon ect for a long periode of time.
Wonder what sales are like for it now? 6m? more?

I did a rough analysis on the Horizon zero dawn page on VGC. Basically, by the beginning of august it probably sold 4.1 mil including digital. Right now it's probably at about 4.36 (about 27k sales per week)



AngryLittleAlchemist said:
JRPGfan said:
We dont have any new sales figurs for Horizon Zero Dawn do we?

Last we heard anything? was back April 30th, when it was over 3.4m units sold through.
So its first 2 months where pretty good.

7 more months have passed since and HZD has been doing okay on Amazon ect for a long periode of time.
Wonder what sales are like for it now? 6m? more?

I did a rough analysis on the Horizon zero dawn page on VGC. Basically, by the beginning of august it probably sold 4.1 mil including digital. Right now it's probably at about 4.36 (about 27k sales per week)

Right now its not doing so hot... its #112 on amazon in video games, so its out of the top100.

But for alot of months after release it was regularly in the top20-40 range.

Id think it would be higher than 4.3m by now.

 

Someone go and twitter and ask them? "can we has sales numbers?" :P



JRPGfan said:
AngryLittleAlchemist said:

I did a rough analysis on the Horizon zero dawn page on VGC. Basically, by the beginning of august it probably sold 4.1 mil including digital. Right now it's probably at about 4.36 (about 27k sales per week)

Right now its not doing so hot... its #112 on amazon in video games, so its out of the top100.

But for alot of months after release it was regularly in the top20-40 range.

Id think it would be higher than 4.3m by now.

 

Someone go and twitter and ask them? "can we has sales numbers?" :P

4.3 mil is not bad .... Uncharted 2 sold about that much in the span of three months and a year