Killzone 2 has £2million advertising budget in the UK

[theRepublic]

kowenicki said:

theRepublic said:

kowenicki said:

theRepublic said:
From what Sven of Capcom said about advertising the other day, it sounds like Sony is expecting around £20 million in gross sales of Killzone 2 in the UK.

how much profit is that?

 

It's a tough call, but I'll go through all the reasoning to see what estimate we can come up with.

The info from Capcom said that the company average advertising budget for a game is roughly 9-12% of the expected gross sales of a game. So a £2 million dollar advertising budget means that they expect sales of around £20 million for the game.

At £40 a game, that means Sony thinks that the game will sell 500,000 copies in the region.

I have heard that third parties get around $20-25 dollars per game sold. That is in US currency where games are $60 for the PS3. Since this is a first party game, they should get more since they don't pay licensing fees. I'm going to round that to $30, which is half of the total price. Assuming that logic holds true for the UK, I'll guess that £20 of every game sold goes to Sony.

So multiply 500,000 by £20 and you get £10 million. Subtract the £2 million ad budget, and that leaves you with £8 million in profit net revenue for the region.

Keep in mind that this is a rough estimate. Feel free to correct me on this.

EDIT: That is an estimate of the expected net revenue for the region. It is not profit.

 

That doesnt make sense really.  There has to be a number sold to cover development costs and marketing... you dont make anyhting until those are covered.

If the game cost 30m (v. conservative) and marketing is at 10m then you need to sell a couple of million to break even surely? or am i missing something?

Oops.

Let me rephrase that.  It is not profit.  The £8 million is approximately the net revenue that is expected for the UK region.

I have no clue what the game cost, and you can't really break that up into a regional analysis like the one I just did anyway.

This game will probably need to sell over a million worldwide to break even though.  Maybe even a little more.

EDIT: Let's assume your numbers are right, and the costs associated with this game are $40 million.  Then we assume the same as above, that Sony gets about $30 per game sold.  Then Sony would need to sell around 1.33 million copies of the game to break even.