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Forums - Sales Discussion - Selling 1 million units is no longer enough

Mummelmann on 25 December 2009
MaxwellGT2000 said:
Mummelmann said:
MaxwellGT2000 said:
Mummelmann said:
Maybe it is silly that a million seller isn't a blazing success but you can't blame developers for wanting sales like Modern Warfare 2 for instance, that game is selling like nothing else ever has (3rd party multiplatform that is).

The issue is everyone took the Halo idea where everything is hyped beyond belief and it makes it like there's a summer blockbuster film coming out every week and is marketed as such, if you want to know why attach rates are so high for 360 thats the reason, but even that can't make enough people to buy enough of the big games so every game can break even.  

Only a select few get the needed sales to be a rousing success, most can get a million maybe two which last gen would be nothing to scoff at but this gen that seems to be the line to keep your head above water, its just the game industry is going to spiral into oblivion at its current rate with developers and publishers dropping like flies/posting HUGE losses, what does it really matter if you can get Halo 3 type sales if every other game you release negate those big sales and you end up going in a hole.

I'm not saying its very clever the way things are run, just that I understand why they'd strive to make a blockbuster in the first place. There's also the issue of many developers making pure shaite and releasing it, that also costs them. Things like Rogue Warrior is bound to set back any developer, I don't even understand why they spend money on developing something like that.

The movie industry is in the same boat though but its doing fine, even with its claims of being near sunk by piracy. The game industry in its current form won't disappear any time soon but I don't like the fact that a few big and more wealthy developers buy the small fries and force them into making silly stuff for Iphone or whatever, or simply stealing their talent and abandoing the studio all together. Bankrupcy is nothing new though, there was also a surge of red numbers in the mid and late 90's where many of the developers from the golden era of PC gaming, for instance, perished or were bought and abused (Westwood is the perfect example, butchered and stripped and made to make whatever tosh EA set them to).

Everyone in here is ranting on about how this is the best generation ever (I disagree though) but how can it be that developers have made some of the finest games ever if they're going under and how can practically all sales records from previous generations be shattered? The industry is doing fine, a lot of (or most of) the crashes we're seeing are related to the financial crisis, the world of green has gone to shit lately in case no one has noticed. It reminds me of when we got the new smoking prohibition here in Norway, every nightclub, bar and pub owner screamed bloody murder and said they'd all surely perish if no one was allowed to smoke inside. Some did perish, but most of them would have anyway due to bad decisions having been made earlier on and shoddy leadership/running of daily affairs. In fact; the amount of places that went under was the yearly same (yes, more developers than usual have gone under but like I said; financial crisis, nearly all industries on earth have taken massive hits) as before the prohibition but it was a nice scapegoat for them to use when they ultimately failed.

My point is; a lot of developers were headed for shit valley as is and a lot of publishers and developers go under all the time due to the nature of the competitive market and with the financial crisis still looming over us, having among other things decreased Japan's export rates by nearly 55%, its a small wonder that not even more go under. Is the industry in trouble? Parts of it, yes, as always. But the same goes for all other industries at the moment. They don't need to radically change, the market is largely the same, they simply (allthough I don't know if its actually simple) need to smarten up and think harder about what they're doing and perhaps ponder their ideas a little more before wasting millions on them (again, Rogue Warrior seems like a fitting example). Besides, the "savior" of the industry, Nintendo, has proven to be a challenging ground to do battle on as well and I'm not sure that the industry at large agrees that Blue Ocean is so cool unless you have Nintendo branded on your box (no 3rd party effort will ever move Nintendo numbers, that's just a fact). Damned if you do, damned if you don't, at least in here.

No one has ever pushed Nintendo numbers ever, even prior to "blue ocean" the closest things were The Sims and damn near anything Blizzard, but thats a testament to quality, marketing, and being open to everyone much like Nintendo.  As for doing well on Nintendos own platform, multiple publishers and developers already have had great success, it just dumbfounds me that all these companies would rather piss away millions on something like Rouge Warrior but couldn't be bothered to make a simple game based around pure gameplay and market it well on any platform not just Nintendos, when you focus on the core element which is gameplay and just make something that looks aesthetically pleasing, you don't have to spend ass loads of money and you could even put that money into marketing your game.

I do agree shit developers/publisher making shit decisions deserve to go under, (ex: Brash and Grin Studios) but these companies also take out other good companies with them that just made a fatal mistake they couldn't have seen coming, like Factor 5 being told by Sony that making Lair would only be about 10 million dollars, they hop aboard and realize that it was going to take 20 million and that they were already in too deep to back out, after that they needed to make some bank and paired up with Brash that went under and no one picked up their project, they were finished.  

Another example is Free Radical pairing up with Ubisoft that made them constantly change Haze until it wasn't what they intended it to be, it of course flopped, then they paired with Lucas Arts to make Star Wars BF3 which was dropped by Lucas Arts and they were screwed.  Now I know these kinds of things have always happened in the industry but before they'd take the hit, make a few quick projects usually licensed stuff, and be back up on their feet, however this generation one mistake can kill an entire company, and it obviously doesn't even have to be their fault, I'm certain the guys at ensemble studios feel the same way.

As for the movie industry reference, after many companies went under they started to learn that you can't have 3 summer "blockbuster" movies within a couple of weeks of each other, it worked for a little while yes but then people started to get fed up and would only go to a couple.  The game industry used to spread their games out or just didn't green light so many high budget games, this gen its obvious that increased a lot, and they're going to destroy themselves in the process unless they adapt, which right now isn't looking likely.

 

That is a very good point, this is something the game industry does a lot, especially around fall. September and October are usually crazy months for new releases and some of the behemoths inevitably swallows up the "lesser" ones that might be just as good quality wise, they only have smaller budgets. What was MW2's ads budget again? 200 million? Nothing can compete with that. There's also the issue of roots, some companies simply don't have the arm reach (or, alternately, the funds) to properly advertise and move their games and that's why gems like King's Bounty: The Legend get largely overlooked in favor of games that are (imo) inferior but has a bigger media machine supporting it.

It is a shame that some rotten apples spoil the entire basket, this is a huge weakness where daughter companies in any industry are concerned. In a decade or so, I can see two or three major conglomerates owning practically every studio and publisher, with only every odd Indie developer being independent. Hardly a good thing for us consumers but it seems almost written in stone from where I'm sitting.



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Dr.Grass on 25 December 2009
NoCtiS_NoX said:

A game selling 2 million units these days is generating, conservatively, $100 million in retail sales.

 

How did you get this?



Kasz216 on 25 December 2009
Aprisaiden said:
Selling 500k+ for most games is still considered a success, as the game should break-even or return some profitability. This article is mainly referring to high budget titles and the big issue with them is the way they are given excessive marketing budgets, development budgets AND are expected to generate enough profit to make up for the lower budget titles that failed to turn profitable.

The answer to this problem is to learn how to reduce the cost of high budget titles and for the industry to actively teach various consumers that they should be buying the high quality AAA budget titles for there consoles and not "casual mini-game collection 8,567: this time we got 40% on meta-critic"

Except.... 10-20 million keeps getting quoted this generation as an AVERAGE.



Aion on 25 December 2009

Yeah i hope dev costs lower.



 

   PROUD MEMBER OF THE PLAYSTATION 3 : RPG FAN CLUB

 

.jayderyu on 25 December 2009

While the VG industry is bigger, the industry can draw parallels with the RPG industry(Pen and Paper that is). It's pretty much hit a stagnation point where Indies try to create new games, but it's all targeted to the enthuast market. Oddly only Dragon Age(PnP) is attempting to be user friendly. It's sad, but hey this is where is seems that many core gamers want to go.



Squilliam: On Vgcharts its a commonly accepted practice to twist the bounds of plausibility in order to support your argument or agenda so I think its pretty cool that this gives me the precedent to say whatever I damn well please.

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Squilliam on 25 December 2009

I think developers of a lot of big games and Microsoft initially realised that the game industry needed to move into a more 'Movie/TV industry position where they can have multiple avenues to gather revenue and this is where downloadable content comes in. If you can get $5-10 extra on average from your customers for the downloads of maps and extra content which is cheap and fits in with your development of the next game it makes perfect sense and it definately helps make the bigger projects even more profitable to offset the next game in development or other games which they aren't so lucky with. Movies have ticket sales, DVD sales, rentals, and tv broadcast. Games now have retail sales, DLC, games on demand (for cheap titles the cost of game + distribution/retail margins are higher relative to sale price) and hopefully in the future game rentals. 

But as always good content prevails and companies like Valve, Epic, Bethesda are simply rolling in the cash because they simply make games which are standout in the quality and the sales follow through from that.



Tease.

binary solo on 25 December 2009

Was a time too when making $100 million at the box office meant massive success and huge profits for the movie studio/producers. Now-a-days with movies often having a production budget over $100 million they need to make at least $200 million at the box office to break even. Of course movies have DVD/blu-ray sales to help profits.

It's called inflation.

DLC can help, but it's also where sequels come in. Money may be lost on the first game because of the huge resource that is required to build a game from scratch. But the sequel will borrow a lot from the first game (and improve on it too) development-wise and make it easier for the sequel to make the overall franchise profitable. If you can squeeze a 3rd million selling game into a generation then the profits will really start to roll in for the developer and producer.

Also, like Crytek, licencing the development kit helps. Crytek makes money without having to make an acutal game, the developer's production costs are less because they don't need to make a game engine from scratch.

There's no getting away from the huge profitability of a well loved franchise with relatively low production costs. I bet NSMB Wii became profitable after its first 250K games were sold. Now that's success. I bet MW2 also became profitable within hours of it being released, probably needing less than 1 million sales to get past break even.

There's a place for good quality, low budget games (just like good quality low budget movies), but there's also a place for good quality big budget games. There are PSN/XBL/Wiiware games that sell for less than $10 which will turn a profit, and they are fun and provide good value for money. But I also want the Uncharted 2s, and Final Fantasys, and Mass Effects, and , and.



“The fundamental cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt.” - Bertrand Russell

"When the power of love overcomes the love of power, the world will know peace."

Jimi Hendrix

 

johnsobas on 25 December 2009
binary solo said:
Was a time too when making $100 million at the box office meant massive success and huge profits for the movie studio/producers. Now-a-days with movies often having a production budget over $100 million they need to make at least $200 million at the box office to break even. Of course movies have DVD/blu-ray sales to help profits.

It's called inflation.

DLC can help, but it's also where sequels come in. Money may be lost on the first game because of the huge resource that is required to build a game from scratch. But the sequel will borrow a lot from the first game (and improve on it too) development-wise and make it easier for the sequel to make the overall franchise profitable. If you can squeeze a 3rd million selling game into a generation then the profits will really start to roll in for the developer and producer.

Also, like Crytek, licencing the development kit helps. Crytek makes money without having to make an acutal game, the developer's production costs are less because they don't need to make a game engine from scratch.

There's no getting away from the huge profitability of a well loved franchise with relatively low production costs. I bet NSMB Wii became profitable after its first 250K games were sold. Now that's success. I bet MW2 also became profitable within hours of it being released, probably needing less than 1 million sales to get past break even.

There's a place for good quality, low budget games (just like good quality low budget movies), but there's also a place for good quality big budget games. There are PSN/XBL/Wiiware games that sell for less than $10 which will turn a profit, and they are fun and provide good value for money. But I also want the Uncharted 2s, and Final Fantasys, and Mass Effects, and , and.


MW2 may have been profitable after the first day of release but it took a lot more sales than 1 million.  They had a 150 million dollar marketing budget for that game not even including development. 



currently playing: Skyward Sword, Mario Sunshine, Xenoblade Chronicles X

MaxwellGT2000 on 25 December 2009
Mummelmann said:
MaxwellGT2000 said:
Mummelmann said:
MaxwellGT2000 said:
Mummelmann said:
Maybe it is silly that a million seller isn't a blazing success but you can't blame developers for wanting sales like Modern Warfare 2 for instance, that game is selling like nothing else ever has (3rd party multiplatform that is).

The issue is everyone took the Halo idea where everything is hyped beyond belief and it makes it like there's a summer blockbuster film coming out every week and is marketed as such, if you want to know why attach rates are so high for 360 thats the reason, but even that can't make enough people to buy enough of the big games so every game can break even.  

Only a select few get the needed sales to be a rousing success, most can get a million maybe two which last gen would be nothing to scoff at but this gen that seems to be the line to keep your head above water, its just the game industry is going to spiral into oblivion at its current rate with developers and publishers dropping like flies/posting HUGE losses, what does it really matter if you can get Halo 3 type sales if every other game you release negate those big sales and you end up going in a hole.

I'm not saying its very clever the way things are run, just that I understand why they'd strive to make a blockbuster in the first place. There's also the issue of many developers making pure shaite and releasing it, that also costs them. Things like Rogue Warrior is bound to set back any developer, I don't even understand why they spend money on developing something like that.

The movie industry is in the same boat though but its doing fine, even with its claims of being near sunk by piracy. The game industry in its current form won't disappear any time soon but I don't like the fact that a few big and more wealthy developers buy the small fries and force them into making silly stuff for Iphone or whatever, or simply stealing their talent and abandoing the studio all together. Bankrupcy is nothing new though, there was also a surge of red numbers in the mid and late 90's where many of the developers from the golden era of PC gaming, for instance, perished or were bought and abused (Westwood is the perfect example, butchered and stripped and made to make whatever tosh EA set them to).

Everyone in here is ranting on about how this is the best generation ever (I disagree though) but how can it be that developers have made some of the finest games ever if they're going under and how can practically all sales records from previous generations be shattered? The industry is doing fine, a lot of (or most of) the crashes we're seeing are related to the financial crisis, the world of green has gone to shit lately in case no one has noticed. It reminds me of when we got the new smoking prohibition here in Norway, every nightclub, bar and pub owner screamed bloody murder and said they'd all surely perish if no one was allowed to smoke inside. Some did perish, but most of them would have anyway due to bad decisions having been made earlier on and shoddy leadership/running of daily affairs. In fact; the amount of places that went under was the yearly same (yes, more developers than usual have gone under but like I said; financial crisis, nearly all industries on earth have taken massive hits) as before the prohibition but it was a nice scapegoat for them to use when they ultimately failed.

My point is; a lot of developers were headed for shit valley as is and a lot of publishers and developers go under all the time due to the nature of the competitive market and with the financial crisis still looming over us, having among other things decreased Japan's export rates by nearly 55%, its a small wonder that not even more go under. Is the industry in trouble? Parts of it, yes, as always. But the same goes for all other industries at the moment. They don't need to radically change, the market is largely the same, they simply (allthough I don't know if its actually simple) need to smarten up and think harder about what they're doing and perhaps ponder their ideas a little more before wasting millions on them (again, Rogue Warrior seems like a fitting example). Besides, the "savior" of the industry, Nintendo, has proven to be a challenging ground to do battle on as well and I'm not sure that the industry at large agrees that Blue Ocean is so cool unless you have Nintendo branded on your box (no 3rd party effort will ever move Nintendo numbers, that's just a fact). Damned if you do, damned if you don't, at least in here.

No one has ever pushed Nintendo numbers ever, even prior to "blue ocean" the closest things were The Sims and damn near anything Blizzard, but thats a testament to quality, marketing, and being open to everyone much like Nintendo.  As for doing well on Nintendos own platform, multiple publishers and developers already have had great success, it just dumbfounds me that all these companies would rather piss away millions on something like Rouge Warrior but couldn't be bothered to make a simple game based around pure gameplay and market it well on any platform not just Nintendos, when you focus on the core element which is gameplay and just make something that looks aesthetically pleasing, you don't have to spend ass loads of money and you could even put that money into marketing your game.

I do agree shit developers/publisher making shit decisions deserve to go under, (ex: Brash and Grin Studios) but these companies also take out other good companies with them that just made a fatal mistake they couldn't have seen coming, like Factor 5 being told by Sony that making Lair would only be about 10 million dollars, they hop aboard and realize that it was going to take 20 million and that they were already in too deep to back out, after that they needed to make some bank and paired up with Brash that went under and no one picked up their project, they were finished.  

Another example is Free Radical pairing up with Ubisoft that made them constantly change Haze until it wasn't what they intended it to be, it of course flopped, then they paired with Lucas Arts to make Star Wars BF3 which was dropped by Lucas Arts and they were screwed.  Now I know these kinds of things have always happened in the industry but before they'd take the hit, make a few quick projects usually licensed stuff, and be back up on their feet, however this generation one mistake can kill an entire company, and it obviously doesn't even have to be their fault, I'm certain the guys at ensemble studios feel the same way.

As for the movie industry reference, after many companies went under they started to learn that you can't have 3 summer "blockbuster" movies within a couple of weeks of each other, it worked for a little while yes but then people started to get fed up and would only go to a couple.  The game industry used to spread their games out or just didn't green light so many high budget games, this gen its obvious that increased a lot, and they're going to destroy themselves in the process unless they adapt, which right now isn't looking likely.

 

That is a very good point, this is something the game industry does a lot, especially around fall. September and October are usually crazy months for new releases and some of the behemoths inevitably swallows up the "lesser" ones that might be just as good quality wise, they only have smaller budgets. What was MW2's ads budget again? 200 million? Nothing can compete with that. There's also the issue of roots, some companies simply don't have the arm reach (or, alternately, the funds) to properly advertise and move their games and that's why gems like King's Bounty: The Legend get largely overlooked in favor of games that are (imo) inferior but has a bigger media machine supporting it.

It is a shame that some rotten apples spoil the entire basket, this is a huge weakness where daughter companies in any industry are concerned. In a decade or so, I can see two or three major conglomerates owning practically every studio and publisher, with only every odd Indie developer being independent. Hardly a good thing for us consumers but it seems almost written in stone from where I'm sitting.

Well there are alternatives, many small companies have stuck to handhelds, made great gems and even started their own publishing businesses.  Building up from there you can go onto Wii publishing and such, the budgets won't have to be huge to compete with other companies and as long as they at least advertise some they're giving a lot more effort than most publishers on Wii as far as getting the name out there.  I feel that the industry as a whole needs to find a new median where the standard shouldn't be based off graphics, hype, and big budgets, but you can make a simple good looking PS3 or 360 game (even in 2D) and it wouldn't cost nearly as much, the issue comes in where the way to differentiate yourself would be to have good gameplay and overall design, and honestly I don't know how many recent games you've played but man, 6 hour long singleplayer games that just rip off other big titles that are already generic as can be, will not cut it and I dunno if many teams have the talent.

The other issue is the big publishers themselves, they don't want to green light anything they deem as a risk, and that means anything out of the norm, but for the industry to change for the better they're going to have to and I honestly don't see it happening very soon.  These big guys are gonna have to get kicked really hard in the nuts to realize things need to change.



MaxwellGT2000 - "Does the amount of times you beat it count towards how hardcore you are?"

Wii Friend Code - 5882 9717 7391 0918 (PM me if you add me), PSN - MaxwellGT2000, XBL - BlkKniteCecil, MaxwellGT2000

Aprisaiden on 25 December 2009
Kasz216 said:
Aprisaiden said:
Selling 500k+ for most games is still considered a success, as the game should break-even or return some profitability. This article is mainly referring to high budget titles and the big issue with them is the way they are given excessive marketing budgets, development budgets AND are expected to generate enough profit to make up for the lower budget titles that failed to turn profitable.

The answer to this problem is to learn how to reduce the cost of high budget titles and for the industry to actively teach various consumers that they should be buying the high quality AAA budget titles for there consoles and not "casual mini-game collection 8,567: this time we got 40% on meta-critic"

Except.... 10-20 million keeps getting quoted this generation as an AVERAGE.

The 10-20 million figure is for higher budget titles and for titles using new engine's, many titles however are built using the same engine for well under that cost (an example is that all of Insomnaic's games have used the 1 core engine with a few modifcations made for ratchet/resistance).

 

 Also we don't know how the 10-20 million figure is calulated, is it development only? does it include marketing costs? How much do publishers get per game sold $15? $20?, are big buget titles like GTA4($100 million for dev+marketing) / MW2($200million? dev+marketing) included? are budget titles made for under $1-$5 million included?