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Zucas on 12 December 2008
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Squilliam said:

Some points:

1. Games which sell over a longer period of time have much GREATER publishing costs than games which are sold over a shorter period of time, relative to their sales.

A game which sells in small amounts over a longer period of time costs more because of:

  • Small shipments increase transportation costs.
  • They incur a cost for storage or continually small production runs of games.
  • Increased costs from retailers, threat of being jostled off high margin retail shelves.

2. The Development/marketing/distribution costs you used for HD games was far too high. Even following the model of 1,000,000 sales = break even, that would still indicate that the total costs were under $30,000,000 which has been verified from several sources and even an Ubisoft executive said as much.

3. The Development/marketing/distribution costs for the "casual" games you listed were far too low. If you were talking about a DS game I would say it wasn't enough, especially considering my point 1.

I'll leave it at that for now.

 

1. Good point but in the end it wouldn't weigh into much of what I'm getting at.  It'll increase the publishing costs of course but they'll still get back a fair amount in profits.  I mean they are selling some of these games for $40 that litterally cost them nothing to develop.  I mean I can bet out of that million, 70%-80% is publishing and distributing costs.

2. Once again I didn't know what the actual costs were, but this is an editorial not a research paper.  The point is to excite not bring down with factual info.  I chose such high numbers for GTA IV because I knew $100 million to $150 million was probably in the ball park.  I mean I know for a fact that over $100 million went into marketing just for Halo 3 and that even if GTA IV was somewhat similar it would have to be up in that range.  Now our middle of the line HD games like Stranglehold its tough to tell how much those costs but I suspected $50 million to be an inciteful amount as it is.  My bets is that most HD games probably costs in that $50 million range.  Now the one a year ones, they probably costs more in the $20 to $30 million range depending on which series we are talking about because obviously they were developed in a shorter time frame. 

3.  Really I thought it was way too high.  It's hard to imagine that imagine would cost Ubisoft more than a million.  Unless it's all marketing and distribution.