| Sky Render said: I'll try to sum up the above discussion for those who don't want to read it. The main point is that many games don't sell well. Some games do better than others in units sold, but what counts is profits made. Squilliam argues that most sales happen for a few games, which is true. There's a long debate about profits versus revenue, but it boils down to this: profit matters more than revenue. Argument are made about what cuts into profit, but the main point is that most games don't draw a big profit; the lucky ones break even. I think that's a bit shortsighted, since it weighs all games equally. Squilliam says a lot of things about how things are. I'm surprised he didn't ask why they're that way, which would be the first thing I'd ask. My take: games that fail to sell have poor strategy behind them. They're made to cash in on a trend, not to sell to an audience. The difference being that trends are what you think people want based on what they buy right now, and selling to the audience is looking at what they do and making to what they're actually after. That's the Cliff Notes version, anyway. |
"Bloomsbury, the UK publisher of the hit Harry Potter series has announced a large fall in profits for 2006.
The announcement regarding Harry Potter publisher, Bloomsbury came today and stated that in 2006 they saw a fall on 74 percent in profits. 2006 was a year in which no new Harry Potter book was published.
In 2005 Bloomsbury reports profits of £20.1 million GBP (around $50 million US) and in 2006 profits fell to just £5.2 million GBP (around $10.2 million US). It has been the normal trend in the profits of Bloomsbury to rise especially in the year a new Harry Potter book is released. This profit announcement is the first report of a loss for Bloomsbury in 12 years. The figures for 2006 came as no surprise, as Bloomsbury issued a statement last December that its profits for 2006 were down. The December statement came after Christmas books sales did not reach anticipated targets.
2007 will bring another big year of profits for Bloomsbury as the seventh and final Harry Potter book; 'Harry Potter and the Deathly Hallows' is released on July 21. Bloomsbury has already begun a strategy to continue its growth in a post Harry Potter era.
The chairman of Bloomsbury, Nigel Newton, said that the publisher was working hard to implements its growth strategy. This strategy includes finding and promoting new authors, acquisitions and Internet initiatives. Newton believes that all of these strategies will be beneficial, he said about them, "all of which we believe will enhance and strengthen our position as a leading publisher."
Bloomsbury has enjoyed enormous success from being the U.K. publisher of the Harry Potter books. It is the first publisher to agree to publish the book and introduce this now best selling series to the world.
However, with the end of the Harry Potter series approaching, Bloomsbury is now under increased pressure to find ways to boost its profits. In the past they have been able to count on the publication of soft cover versions of the Harry Potter books to help profits but once the frenzy over book seven dies down this will no longer be a realistic source of increasing profits."
And thats how the creative industry works. Its you know the reason why a book about the 2nd best flying ace of WWI doesn't sell nearly as well as the best. The best games sell the most, the best sports people get a disproportionate quantity of attention, the best moves also sell a hell of a lot more than an average movie.
Furthermore revenue proves absolute profit, it doesn't imply that a Wii game which makes a ROI of 100% isn't profitable or worthwhile it just shows that the games with the highest absolute profits are also the games which have the highest revenue.
Tease.
