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Forums - Sales Discussion - Is It Worth Developing For PS3? - Bruce on Games to Investors

Kantor on 24 June 2009
Zizzla_Rachet said:
Kantor said:
Mmhmm.

So to sum up, games are expensive, niche is bad, Sony is failing, now to quote a random bluff by Activision, famous for Call of Duty, Guitar Hero and...and...........

PS3 only gets 360 ports, and they still cost money.

To sum up further: LOLZPS3IZDOOMED!

Okay, Call of Duty, Guitar Hero, Quake, and Zork: The Undiscovered Underground.

4/5 of the games on that list were shovelware, 80s games, early 90s games, ports, movie games, or any combination thereof.

I was referring to series that people nowadays have actually heard of and care about. To be honest, if Activision left Call of Duty, I'd be more than happy for them to drop PS3 support.



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Epke on 24 June 2009

i my god now i have to buy a Xbox 360, NOT!



Jereel Hunter on 24 June 2009
BMaker11 said:
Are they really going to call Kotick's schtick, when CoD4 was built by two different teams within Infinity Ward?

Anyway, don't put "me too" games on the PS3 then. Only put on the games that are the big sellers. That's fine by me. It just makes it easier for me when I go look at the PS3s library at a game store. Less shovelware = better, imo

"Me too" games are not always shovelware. How many times does an awesome game not get the sales it deserves? How many times does an awesome game that anticipates low sales take off? You'd lose all of those, if you only got the guaranteed sales titans.



Jereel Hunter on 24 June 2009
mibuokami said:
gebx said:
cura said:

um, .77 isn't almost double .53 lol...

The way I see it, 1.01 vs .56 and .77 vs .53 tell two different stories. Sure xbox 360 still > ps3 but the difference has been greatly reduced, especially when adding in the fact that the ps3 is a younger console (i.e. call of duty 3 was released around the launch of the ps3 and so will obviously have much higher sales on the 360).

Anyway, with the exception of a few games...that is one atrocious list of games. Maybe if the reduced the quantity and increased the quality of their games I'd actually care.

 

no.. 23.58 million is almost double 12.76 million

The attachement rate is directly related to the userbase, so it doesn't matter if the PS3 userbase is smaller. (Activision mentioned attachement rate as their complaint)

For every 100 PS3's, Activision sells 56 games
For every 100 360's, Activision sells 77 games (that's not counting bundle games, CoD 2, GH2, etc)

That's 69% more copies on one console

 

Perhaps you should look at recent sale trend rather than ineffecient data from when the PS3 was first launched? Pick any none GT/CD game recently release for both the 360 and PS3 from Activision, now compare their sale figure... now tell me if its substantially more profitable to support the 360 exclusively in today's market?

Bear in mind one thing - even if a game has 35-40% of it's sales on the PS3, doesn't nessecarily mean it was worth porting. Why you say?

Lets use some basic numbers

Lets say a game costs $20m to develop., and sells 1m copies (600k on 360, 400k on PS3)

If it was to release on 360 alone, it would not sell 600k, it would likely pick up half of the PS3's sales, since a large number of gamers  have both systems but will buy multiplats for their PS3.

so 1m copies split, or 800k on just the 360 is how the dev may look at things.

Now, that $20m budget shrinks to $17 or $18m developing for just one platform, and simultaneously allows them to create a more polished game on that smaller budget, since it can be focused on one system.

Also, factor in that MS charges less licensing fees for their games, which means those extra 200k sales are at a higher profit margin than 200k sales on a PS3.

in short, in a scenario like this, you get:

Multiplat - $20 dev budget - $50m sales - (Dev takes say... 40% of that all told after publishing and licensing fees) - dev about breaks even

360 Exclusive - $17-18m budget - $40m - (Dev takes about 43% all told after publishing and licensing fees)  = 17.2m - dev about breaks even - not including any incentives for making the game exclusive

But the issue is more than that. Not only can the numbers be similar, but there's less overhead. a company can maintain smaller development teams which means less money lost on flops/cancelled projects. It reduces overall administrative costs, which for a company the size of activision can really add up.

Note: none of these numbers are real, just an example of how multiplats(I don't know the exact figures) are not nessecarily more profitable, just because they sell more copies.



welshbloke on 24 June 2009

Two valid points made by Jereel Hunter

Reduced Overhead
Reduced risk

Still say it is posturing.



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Jereel Hunter on 24 June 2009
welshbloke said:
Two valid points made by Jereel Hunter

Reduced Overhead
Reduced risk

Still say it is posturing.

Agreed. I don't think they actually intend to do it - and certainly not on their bigger projects. I could see smaller niché titles, like the history channel ones, go single-plat though.



Reasonable on 24 June 2009
Jereel Hunter said:
mibuokami said:
gebx said:
cura said:

um, .77 isn't almost double .53 lol...

The way I see it, 1.01 vs .56 and .77 vs .53 tell two different stories. Sure xbox 360 still > ps3 but the difference has been greatly reduced, especially when adding in the fact that the ps3 is a younger console (i.e. call of duty 3 was released around the launch of the ps3 and so will obviously have much higher sales on the 360).

Anyway, with the exception of a few games...that is one atrocious list of games. Maybe if the reduced the quantity and increased the quality of their games I'd actually care.

 

no.. 23.58 million is almost double 12.76 million

The attachement rate is directly related to the userbase, so it doesn't matter if the PS3 userbase is smaller. (Activision mentioned attachement rate as their complaint)

For every 100 PS3's, Activision sells 56 games
For every 100 360's, Activision sells 77 games (that's not counting bundle games, CoD 2, GH2, etc)

That's 69% more copies on one console

 

Perhaps you should look at recent sale trend rather than ineffecient data from when the PS3 was first launched? Pick any none GT/CD game recently release for both the 360 and PS3 from Activision, now compare their sale figure... now tell me if its substantially more profitable to support the 360 exclusively in today's market?

Bear in mind one thing - even if a game has 35-40% of it's sales on the PS3, doesn't nessecarily mean it was worth porting. Why you say?

Lets use some basic numbers

Lets say a game costs $20m to develop., and sells 1m copies (600k on 360, 400k on PS3)

If it was to release on 360 alone, it would not sell 600k, it would likely pick up half of the PS3's sales, since a large number of gamers  have both systems but will buy multiplats for their PS3.

so 1m copies split, or 800k on just the 360 is how the dev may look at things.

Now, that $20m budget shrinks to $17 or $18m developing for just one platform, and simultaneously allows them to create a more polished game on that smaller budget, since it can be focused on one system.

Also, factor in that MS charges less licensing fees for their games, which means those extra 200k sales are at a higher profit margin than 200k sales on a PS3.

in short, in a scenario like this, you get:

Multiplat - $20 dev budget - $50m sales - (Dev takes say... 40% of that all told after publishing and licensing fees) - dev about breaks even

360 Exclusive - $17-18m budget - $40m - (Dev takes about 43% all told after publishing and licensing fees)  = 17.2m - dev about breaks even - not including any incentives for making the game exclusive

But the issue is more than that. Not only can the numbers be similar, but there's less overhead. a company can maintain smaller development teams which means less money lost on flops/cancelled projects. It reduces overall administrative costs, which for a company the size of activision can really add up.

Note: none of these numbers are real, just an example of how multiplats(I don't know the exact figures) are not nessecarily more profitable, just because they sell more copies.

I think in assuming that if there was no PS3 version of say Prototype the 360 sales would rise by 50% of the potential PS3 sales you're being a tad over optimistic.  I suspect that 360/PS3 owners are in the minority for one thing, and I suspect that 360/PS3 owners tend to buy multiplats on 360 unless there is some specific reason not to.

As a result I would really only anticipate a much more modest, perhaps 5% to 10% bump to 360 sales max.

I agree that in the right circumstances developing for one console is more cost effective, but two things I see many people forgetting are:

1) brand positioning.  Activision, EA, etc. are seen as multiplatform companies for the most part, and I think it would be a major sea change to shift that now.

2) profits are very important but if you want to be a large company you need revenue too.  And focusing on profits while reducing revenue (as dropping PS3 platform would certainly do) would result in Activision potentially being slightly more profitable but effectively smaller as a company.

 

I think this route really only favours smaller, focused developers such as Bungie, Insomniac, Epic, Sucker Punch, etc.  I could only see Activision pulling the plug if PS3 truly died and fell way behind as a platform, and I don't think that's going to happen.  The next 12 months - June 2009 to June 2010 - are likely to see far too many high profile titles on PS3, both exclusive and otherwise (one of the biggest ironically supplied by Activision themselves) for this to happen.

EDIT: the only link I could find with a search is the following regarding multiple console ownership:

http://www.gamasutra.com/php-bin/news_index.php?story=18107

However, it does strongly imply that probably only a fraction, perhaps as low as sub 1%, of gamers have both consoles (they assume only around 3% with more than 1 and I suspect there are more 360/Wii & PS3/Wii combinations than PS3/360 combinations out there).  So as I say I think your approach is fine but the percentage of additional sales you're applying is probably off a bit.

 

 



Try to be reasonable... its easier than you think...

Jereel Hunter on 24 June 2009
Reasonable said:
Jereel Hunter said:
mibuokami said:
gebx said:
cura said:

um, .77 isn't almost double .53 lol...

The way I see it, 1.01 vs .56 and .77 vs .53 tell two different stories. Sure xbox 360 still > ps3 but the difference has been greatly reduced, especially when adding in the fact that the ps3 is a younger console (i.e. call of duty 3 was released around the launch of the ps3 and so will obviously have much higher sales on the 360).

Anyway, with the exception of a few games...that is one atrocious list of games. Maybe if the reduced the quantity and increased the quality of their games I'd actually care.

 

no.. 23.58 million is almost double 12.76 million

The attachement rate is directly related to the userbase, so it doesn't matter if the PS3 userbase is smaller. (Activision mentioned attachement rate as their complaint)

For every 100 PS3's, Activision sells 56 games
For every 100 360's, Activision sells 77 games (that's not counting bundle games, CoD 2, GH2, etc)

That's 69% more copies on one console

 

Perhaps you should look at recent sale trend rather than ineffecient data from when the PS3 was first launched? Pick any none GT/CD game recently release for both the 360 and PS3 from Activision, now compare their sale figure... now tell me if its substantially more profitable to support the 360 exclusively in today's market?

Bear in mind one thing - even if a game has 35-40% of it's sales on the PS3, doesn't nessecarily mean it was worth porting. Why you say?

Lets use some basic numbers

Lets say a game costs $20m to develop., and sells 1m copies (600k on 360, 400k on PS3)

If it was to release on 360 alone, it would not sell 600k, it would likely pick up half of the PS3's sales, since a large number of gamers  have both systems but will buy multiplats for their PS3.

so 1m copies split, or 800k on just the 360 is how the dev may look at things.

Now, that $20m budget shrinks to $17 or $18m developing for just one platform, and simultaneously allows them to create a more polished game on that smaller budget, since it can be focused on one system.

Also, factor in that MS charges less licensing fees for their games, which means those extra 200k sales are at a higher profit margin than 200k sales on a PS3.

in short, in a scenario like this, you get:

Multiplat - $20 dev budget - $50m sales - (Dev takes say... 40% of that all told after publishing and licensing fees) - dev about breaks even

360 Exclusive - $17-18m budget - $40m - (Dev takes about 43% all told after publishing and licensing fees)  = 17.2m - dev about breaks even - not including any incentives for making the game exclusive

But the issue is more than that. Not only can the numbers be similar, but there's less overhead. a company can maintain smaller development teams which means less money lost on flops/cancelled projects. It reduces overall administrative costs, which for a company the size of activision can really add up.

Note: none of these numbers are real, just an example of how multiplats(I don't know the exact figures) are not nessecarily more profitable, just because they sell more copies.

I think in assuming that if there was no PS3 version of say Prototype the 360 sales would rise by 50% of the potential PS3 sales you're being a tad over optimistic.  I suspect that 360/PS3 owners are in the minority for one thing, and I suspect that 360/PS3 owners tend to buy multiplats on 360 unless there is some specific reason not to.

As a result I would really only anticipate a much more modest, perhaps 5% to 10% bump to 360 sales max.

I agree that in the right circumstances developing for one console is more cost effective, but two things I see many people forgetting are:

1) brand positioning.  Activision, EA, etc. are seen as multiplatform companies for the most part, and I think it would be a major sea change to shift that now.(Agreed)

2) profits are very important but if you want to be a large company you need revenue too.  And focusing on profits while reducing revenue (as dropping PS3 platform would certainly do) would result in Activision potentially being slightly more profitable but effectively smaller as a company. (Agreed, mostly)

I think this route really only favours smaller, focused developers such as Bungie, Insomniac, Epic, Sucker Punch, etc.  I could only see Activision pulling the plug if PS3 truly died and fell way behind as a platform, and I don't think that's going to happen.  The next 12 months - June 2009 to June 2010 - are likely to see far too many high profile titles on PS3, both exclusive and otherwise (one of the biggest ironically supplied by Activision themselves) for this to happen.

I agree. Like I said, Activision wouldn't pull the plug on PS3. I'm not expecting them to. GH or CoD going to PS3 as long as PS3 for the foreseeable future is a no brainer, but if you look at small games like World Series of Poker or Tony Hawk's Project 8 or Fracture, there's a case for not bothering with a second platform. I could see a publisher in rough times looking at trimming dev staffs on their lesser projects, and keeping their multiplat tendancies on all their top tier franchises.



Zizzla_Rachet on 24 June 2009
Kantor said:
Zizzla_Rachet said:
Kantor said:
Mmhmm.

So to sum up, games are expensive, niche is bad, Sony is failing, now to quote a random bluff by Activision, famous for Call of Duty, Guitar Hero and...and...........

PS3 only gets 360 ports, and they still cost money.

To sum up further: LOLZPS3IZDOOMED!

Okay, Call of Duty, Guitar Hero, Quake, and Zork: The Undiscovered Underground.

4/5 of the games on that list were shovelware, 80s games, early 90s games, ports, movie games, or any combination thereof.

I was referring to series that people nowadays have actually heard of and care about. To be honest, if Activision left Call of Duty, I'd be more than happy for them to drop PS3 support.

Mario is an 80's game..is it shovelware?

If people nowadays forget what companies have done what...then they should not follow the Video game Biz so closely...for their lack of knowledge will make then look stupid...



 



Reasonable on 24 June 2009
Jereel Hunter said:
Reasonable said:
Jereel Hunter said:
mibuokami said:
gebx said:
cura said:

um, .77 isn't almost double .53 lol...

The way I see it, 1.01 vs .56 and .77 vs .53 tell two different stories. Sure xbox 360 still > ps3 but the difference has been greatly reduced, especially when adding in the fact that the ps3 is a younger console (i.e. call of duty 3 was released around the launch of the ps3 and so will obviously have much higher sales on the 360).

Anyway, with the exception of a few games...that is one atrocious list of games. Maybe if the reduced the quantity and increased the quality of their games I'd actually care.

 

no.. 23.58 million is almost double 12.76 million

The attachement rate is directly related to the userbase, so it doesn't matter if the PS3 userbase is smaller. (Activision mentioned attachement rate as their complaint)

For every 100 PS3's, Activision sells 56 games
For every 100 360's, Activision sells 77 games (that's not counting bundle games, CoD 2, GH2, etc)

That's 69% more copies on one console

 

Perhaps you should look at recent sale trend rather than ineffecient data from when the PS3 was first launched? Pick any none GT/CD game recently release for both the 360 and PS3 from Activision, now compare their sale figure... now tell me if its substantially more profitable to support the 360 exclusively in today's market?

Bear in mind one thing - even if a game has 35-40% of it's sales on the PS3, doesn't nessecarily mean it was worth porting. Why you say?

Lets use some basic numbers

Lets say a game costs $20m to develop., and sells 1m copies (600k on 360, 400k on PS3)

If it was to release on 360 alone, it would not sell 600k, it would likely pick up half of the PS3's sales, since a large number of gamers  have both systems but will buy multiplats for their PS3.

so 1m copies split, or 800k on just the 360 is how the dev may look at things.

Now, that $20m budget shrinks to $17 or $18m developing for just one platform, and simultaneously allows them to create a more polished game on that smaller budget, since it can be focused on one system.

Also, factor in that MS charges less licensing fees for their games, which means those extra 200k sales are at a higher profit margin than 200k sales on a PS3.

in short, in a scenario like this, you get:

Multiplat - $20 dev budget - $50m sales - (Dev takes say... 40% of that all told after publishing and licensing fees) - dev about breaks even

360 Exclusive - $17-18m budget - $40m - (Dev takes about 43% all told after publishing and licensing fees)  = 17.2m - dev about breaks even - not including any incentives for making the game exclusive

But the issue is more than that. Not only can the numbers be similar, but there's less overhead. a company can maintain smaller development teams which means less money lost on flops/cancelled projects. It reduces overall administrative costs, which for a company the size of activision can really add up.

Note: none of these numbers are real, just an example of how multiplats(I don't know the exact figures) are not nessecarily more profitable, just because they sell more copies.

I think in assuming that if there was no PS3 version of say Prototype the 360 sales would rise by 50% of the potential PS3 sales you're being a tad over optimistic.  I suspect that 360/PS3 owners are in the minority for one thing, and I suspect that 360/PS3 owners tend to buy multiplats on 360 unless there is some specific reason not to.

As a result I would really only anticipate a much more modest, perhaps 5% to 10% bump to 360 sales max.

I agree that in the right circumstances developing for one console is more cost effective, but two things I see many people forgetting are:

1) brand positioning.  Activision, EA, etc. are seen as multiplatform companies for the most part, and I think it would be a major sea change to shift that now.(Agreed)

2) profits are very important but if you want to be a large company you need revenue too.  And focusing on profits while reducing revenue (as dropping PS3 platform would certainly do) would result in Activision potentially being slightly more profitable but effectively smaller as a company. (Agreed, mostly)

I think this route really only favours smaller, focused developers such as Bungie, Insomniac, Epic, Sucker Punch, etc.  I could only see Activision pulling the plug if PS3 truly died and fell way behind as a platform, and I don't think that's going to happen.  The next 12 months - June 2009 to June 2010 - are likely to see far too many high profile titles on PS3, both exclusive and otherwise (one of the biggest ironically supplied by Activision themselves) for this to happen.

I agree. Like I said, Activision wouldn't pull the plug on PS3. I'm not expecting them to. GH or CoD going to PS3 as long as PS3 for the foreseeable future is a no brainer, but if you look at small games like World Series of Poker or Tony Hawk's Project 8 or Fracture, there's a case for not bothering with a second platform. I could see a publisher in rough times looking at trimming dev staffs on their lesser projects, and keeping their multiplat tendancies on all their top tier franchises.

I agree on smaller titles PS3 support probably adds little value.  I think brand positioning is what makes them do so - but I agree we may well see developers finding things tough cutting some platforms out.  I think there's already been a few titles that focused on 360/PC to save costs - Velvet Assassin I think was one?



Try to be reasonable... its easier than you think...