Pretty heavy on theory, and pretty light on facts. Just stacking specific sales against average cost won't tell you if that title actually made money or not, even assuming your sales and average cost data are accurate. You need to consider the specific case of the product in question, or shovelware starts to look like a massive failure (it clearly isn't), while heavily invested games that limp over the 500,000 mark look like success.
Furthermore, making a slight profit on a game (that is, selling one unit more than required to break even) still doesn't exactly make it a success. You need a good, solid return on investment to justify that investment, or you're going to effectively lose money to inflation and opportunity costs. I'd guess at least a 5% return per year it takes for that money to come back to you.
"The worst part about these reviews is they are [subjective]--and their scores often depend on how drunk you got the media at a Street Fighter event." — Mona Hamilton, Capcom Senior VP of Marketing
*Image indefinitely borrowed from BrainBoxLtd without his consent.
