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

[gebx]

makingmusic476 said:

gebx said:

Squilliam said:

Oyvoyvoyv said:

G

* 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...

 

The portions that go towards paying graphics designers, etc. are certainly variables, but the percentages that go towards licensing fees and retailer markups are fixed, and those are the only figures that matter in this scenario, since Sony is both the developer and publisher of the games in question.

 

So the actual profit would be $9 (7+1+1) per copy...