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I approached this from a relative standpoint. I figure 3-4 million in expenses is going to break even at some X number of games sold and that X must be pretty low or else it wouldn't be worth the risk.

So if the game costs an additional 12-16 million, then the number of games sold at $10 more profit (difference between the $50 and $60 game, assuming all $10 goes to the developer) would have to be X+1200000 just to cover those additional expenses. That's what not making sense to me. The developers must be making more than just $10 additional profit to account for the added expense--or they aren't really spending that much.