Why reports of the decline of the PS3 have been grossly exaggerated.

[gebx]

Squilliam said:

Oyvoyvoyv said:

Good point.

 

I have one quite big question  though, that has been asked incredibly many times.

Do publishers really get 38 dollars?

If the game costs 59 dollars (which I am assuming will be the average price for the games sold, rather than the launch price 69 dollars), that means that there are about 8 dollars tax in most countries (14%), lower in some, higher in some.

I can therefore not see the publisher really getting more than 30 dollars pr game.

 

Okay, and a 2nd question.

 

You are talking solely by total sales.

What you should really be looking at, is the increase in sales due to those next millions. Will those sell 15M more because of them? Maybe, but it is no longer conservative, rather the realistic or slightly optimistic.

 

Edit:

 

To add a bit to my point.

 

I see GT5 selling in the 8-10M range (I've looked a bit at this, and it seems the most probable).

If the Ps3 ended at 25M, and sold no more, I would still expect it to sell 6M.

I really expect the Ps3 to sell 45-65M. That means I expect the 30 next million to buy only ~ 3M of GT5, and your OPs 10 million to only move a single extra million.

So, those 15M seems very optimistic as a matter of fact.

* 25% (aka $15) goes to pay the art and design guys.
* 20% ($12) goes to pay the programmers and the engineers.
* 20% (also $12) goes to your friendly neighborhood retailer. EB / GameStop, whoever.
* 11.5% ($7) goes to a "Console Owner Fee" - ie. whichever one of the Big Boys made your hardware (Sony, MS, Nintendo.)
* 7% ($4) goes to marketing, and puts Mad World and Marcus Fenix on MTV.
* 5% ($3) goes to "market development" -- paying for cardboard Standees of the Gears Crew and elbowing other games out of the way for shelf space at your local retailer.
* 5% ($3) goes to actually manufacturing and packaging the disc.
* 5% ($3) is spent paying the Man for IP licenses or maybe hiring some big name voice actors. If your game isn't an original IP, here's where you get dinged by Marvel, Disney, or Ray Liotta's agent.
* 1.5% (just $1) goes into the publisher's pocket.
* 1.5% (also $1) goes into the distributor's pocket.
* 0.3% (about 20 cents) goes into corporate costs. Management, overhead, lawyers, etc.
* 0.05% (less than 3 cents) go into the cost of paying for the Developer's Hardware. Who knew an SDKs can cost tens of thousands of dollars?

$12 + 3 + 3 + 3 = $21 + 1 (distribution costs) nets $22 out of a $60 price tag, the rest goes to Sony themselves.

Source: http://www.garagegames.com/blogs/37536/11924

As far as being optimistic or not I was also conservative in other areas, I didn't mention cost reductions (65nm RSX just been released), Continued sales of a few titles from last year such as LBP. Much of the cost of these games has been accounted for, and the only way they are going to make the platform viable in the long term is to cut the prices and increase sales so I applied revenue from the games in the same year as the games are going to be released and the sales of the consoles are going to be done.

As NJ5 said, the sales of the first parties aren't enough to justify the number of first party studios. The one thing I absolutely know will kill SCE dead is their large first party studio portfolio and stalling console sales.

 

 

Those numbers where based on Gears of Wars, and they don't make any sense since Gears of War sold 5,000,000 copies and that would mean $75,000,000  was used to pay the art and design guys and $60,000,000 to pay the programmers and engineers...

see the problem? Those are fixed costs, not sure why they're shown as variable (or "per copy") costs...