| The Ghost of RubangB said: The above article makes it seem like 4% of started projects make money, and 20% of games on store shelves make money. That would mean that the 20% that make money and the 4% that make money are the same, and the discrepancy is that a huge chunk of games never get finished. That's how I read it anyway. |
Great call Ghost of Rubang! You are correct. 4% of all started products will be profitable and 20% of those that make it to shore shelves. Still damn frigging lousy average when 80% of games aren't profitable. Why are so many unprofitable games getting sequels?
Here is an update/clarification from EEDAR
http://www.edge-online.com/news/analyst-clarifies-%E2%80%9C4%E2%80%9D-report
Following a widely reported Forbes story on Geoffrey Zatkin’s claims that only 4 percent of videogames make a profit, Edge had contacted analyst group Electronic Entertainment Design and Research for more information on the statement.
A company spokesperson at EEDAR explained, “What Geoffrey said was that only 20 percent of games that start production will end up with a finished product. And of that percentage of finished games, 20 percent will make a profit.”
This means that Forbes' article by respected journalist Mary-Jane Irwin, illustrates that 4 percent of all games which start production will eventually make a profit. Some secondary reports have assumed the article refers to the percentage of games that reach the market. A far-more-likely 20 percent of finished products will see profitable returns, estimates EEDAR.
Update: EEDAR has issued a press release that attempts to clarify the situation. Here it is...
Unfortunately, there was a miss-quote in the article that a lot of sites noticed and reported on. Below is the
line from the article.
"Only 4% of games that make it to market actually make a profit, he says. About 60% of a game's budget is spent reworking or redesigning a game. Armed with all this data, companies can make those tough calls early in the development process."
The actual statistic is only 4% of games that enter production will return a significant profit. Of games that are released to the market, only 20% will produce a significant profit. (Source for the second sentence: Secrets of the Game Business by Francois Dominic Laramee).
We understand that miss-communications can happen, especially during phone interviews, but given the inaccuracy of the statistic and how many other sites have picked up on the story, we wanted to ensure that the
major media outlets received the correct statistics on the subject.
Geoffrey Zatkin, EEDAR's President and COO, has provided some clarity on the subject:
"Only 20% of games that begin production will ever finish. Of those 20% that are finished and released to the market, only 20% of them will ever realize a significant profit (Source: Secrets of the Game Business Francois Dominic Laramee).That equals 4% of games that start production return a significant profit.
During the concept and design process of a game, publishers and developers often analyze every feature in a game to ensure proper implementation for a successful release. At EEDAR, we believe that enough historical information is now available to aid publishers and developers during the concept and design process of a game. The EEDAR database, which now consists of over 6 million historical data points, can help remove the burden for publishers and developers from having to justify every feature in their title. Specifically, our DesignMetrics(tm) reports help publishers and developers by identifying early in the development cycle the correct feature combinations most likely to meet consumer expectations. This allows developers to focus more time and resources on creating a high quality and well polished video game."
