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Thrillhouse said:
Here is simple math (Broken down in easy speak)
Obviously this isn't rocket science, but I bet it comes within 25% of reality.

If your game costs $20 million to make
(AFTER EVERYTHING HAS BEEN APPLIED)

And your game costs $60 a pop...

You need to sell 333,334 copies to break even... yay!

=)

 

Here's some slightly more complicated math, although still very basic:

Retailer: wants money
Shipment to store: costs money
Disc + case: costs money
Marketing: costs loads of money
Nintendo/Sony/MS: yeah they also want money

In short: of those $60 you pay in the store only $20-$30 actually end up covering the costs of the publisher.