Reggie, the Million games profit and a unfortunate declaration to NYT

[bardicverse]

Unless Nintendo is taking some serious licensing fees from devs, this has to be inaccurate.

After retail and licensing, a new Wii game brings about $30 to the publisher (who often provide the funding/budget for the dev) Of that, maybe $10 per copy is attributed to manufacturing and advertising. If the publisher funded the game for development, they don't give the developer even a dollar more until they recoup their investment plus make a decent profit. After that, the devs will be given a royalty per copy sold.

So, back on point, the investor (publisher) makes $20/copy. Wii games cost between 5-10 mil to make.
So 500K units * $20/unit = $10 mil. Thus, 500k units need to sell in order for an investor to make back their money.

Now, with an independent dev, they fund and publish their games themselves. Thus, they never have to split profits with anything beyond development/manufacturing/advertisement costs. This is why indie game development is much more appealing (plus getting to keep your IP).

To further the example here, I fund my dev team's current project, Broken Attitude Studios. When all is said and done and the game is released, I'll have invested 50K-100k. We will be selling the game for around $10-$15/copy. So in order for me to recoup my profit, our game needs to sell 5k-10k units. Anything beyond that goes towards funding for our next project.