Here we go, case in point - but let me stress I am not promoting Wii games here just publishers making brands that have more of a mass market appeal irregardless of which system (Wii/DS/PS2 just happen to have more of a mass market audience) instead of just gambling mega bucks on core games making mega sales.
A look at Ubisoft's sales expectation based on initial sales:
http://www.edge-online.com/news/ubisofts-software-sales-projections
As Ubisoft navigates the holiday shopping season, the Paris-based publisher expects a number of titles to sell over 1 million units.
Speaking at the UBS Global Media Conference on Wednesday, Ubisoft CFO Alain Martinez revealed the following sales targets for new major titles:
Brothers in Arms (September): 1.5 million
Rayman Raving Rabbids TV Party (November): 1.5 million
Higher expectations than the previous Rayman installment, which achieved sales of 1.2 million.
Sales are up 50 percent in the U.S.
"It's typically a Christmas product," said Martinez.
Far Cry 2 (October): 2.5-3 million
2 million of those sales expected to come from Europe, Middle East and Asia sales; the rest coming from the U.S. "It didn't perform as well as [Ubisoft] would have liked in the U.S."
"We're seeing after the launch of Call of Duty and the launch of Gears of War, Far Cry 2 is ramping up," the exec said.
Shaun White Snowboarding (November): 2-2.5 million
"We do feel comfortable that we should be hitting the 1 million target on the Wii, maybe probably exceeding it," Martinez revealed about the Balance Board-compatible version.
Tom Clancy's EndWar (November): 1.4 million
The CFO expects the strategy game to hit "the low end" of expectations.
Martinez also said that casual games are "outperforming" company expectations, although he did not release an updated sales figure.
Performance of the newly released Prince of Persia is a mixed bag, the exec said. "In the first four or five days of sales, we're faring better than the prior Prince of Persia, but lower than Far Cry."
Prince of Persia: The Sands of Time sold 4 million copies over the course of two years.
Martinez believes that the new Prince of Persia, released early this month, has a mainstream appeal, and "therefore, has longer legs."
Now consider HD games need to sell about 1m to clear a profit whereas most Wii games a mere 250k (500K maybe for AAA titles). So Brother in Arms, End War and Shawn White HD are all profitable (presumed) but not by much. Certainly not by much when compared to the profit those same game sales would have generated last generation which would have been substancial. Far Cry & PoP are the only 'hits' here for HD. And PoP's success is acredited to it's 'mass appeal'
RRR3 at 1.5m & Shaun White on Wii at 1m+ are both huge profit generators due to lower development costs but similar sales.
But the real story is that Ubisoft says it's casual games are outperforming expectations. So while many of the these core titles are not big profit generators anymore (compared to last gen) thanks to development costs, they are making it up with a healthy mix of core/casual game brands.
Note: I'm not bashing core games. These games are all profitable and should continue to be made but the profit margin on them have all shrunk so by developing games that appeal to a wider (PoP) or different target markets (Shaun White) and a strong line-up of casual brands Ubisoft is in a strong place financially and can continue to make the core games you all want to see without any undo risk to their bottom line. Other companies should take note.
"...Still, I think that publishers have been lagging behind in terms of innovation versus what Nintendo has done." - Martinez
