BengaBenga on 15 October 2008
| Kyros said: My guess would be that it needs at the very least a 40% Return on Investment for Konami. What do we do now. Make moving targets? That's a bogus discussion anyway. It's easy: If their contract with Sony allows porting and portingcosts + costs of loosing the special relationship with SONY < profit from 360 sales then they will port it. They are a company so this is what counts. Making a profit or "needing 40$ ROI" is bullshit. That is not how it works. Companies will maximize their profit and don't care if one product is profitable. That's similar to drugs. The development costs for a medical drug is irrelevant for pricing. The companies will ALWAYS price the product in a way that maximizes their earnings. That has nothing to do with the question if the development did cost 10$ or 10billion. If the market will pay 10$ for one pill they will ask for 10$ for one pill. The ( earnings-development costs) number ONLY goes into the "will we develop another pill like this"- question. |
Wow, please don't try this line in your application interview.
The 40% ROI is a minimum target a company like Konami would need to make on a game like MGS4. Are you seriously thinking that Konami thinks: "ah, wahtever, if we don't make money on MGS4, we'll make it back on some other game. Too bad of the amazing investment we have done"
Companies use ROI targets to plan their investments, they have a certain amount to spend and will want to maximize the returns. MGS will be on the top of the list of returns.
And no, the drug industry is not the same as the videogame industry. For one: the retail prizes are standardized. That means your profit is basically sales-cost.
