Are wii development costs really cheaper?

[Plaupius]

WereKitten said:

@Plaupius
Sorry if my table was misleading, it was not meant to be.
My rationale was simply to index the table using each version's sales. As in: I code an FPS that I think will potentially sell about 2.5M on each of the HD platforms on average (most probably skewed towards 360 sales). How does this fare against selling the same on the Wii?

You say: how come you can treat each version as if it had roughly the same sale projection. The install base of the Wii is approx. the same as 360+Ps3, but the effective target market depends on the game genre. For FPSs for example up to this point it has been proven that the Wii market responds less than each HD console. This can obviously still be disproven if, say, the conduit manages to sell more than a good FPS on PS3 or 360.

Speaking in general I don't think it's too wrong to assume that about half of the Wii owners belong to the "extended audience". That audience will be interested only in a little number of the AAA big games we're talking about here such as some platformers and simple racers and sports games, but not into the majority of them (think Resident Evil, Final Fantasy, western RPGs, mature shooters, complex adventure games, race sims), thus I took an "effective market" for the Wii of about the size of each HD console, with the caveat as I stated of games that you know will sell well to the Wii demographics,ie also to the extended audience.

Under this assumption, it was reasonable to make that table. If you don't think the assumption is valid, you can still read it, just remember what each column means.

With shams numbers ($18.5 vs $14), I can update my table to this:

Sales
x console Profit Wii Profit PS3+360 1M -6M -11M
1.5M 1M 7.5M
 2M 8M 26M
2.5M 15M 44.5M

Just for reference: the break even sales are about 1.43M on the Wii, 2.59M on PS3+360 (1.29M average and on my table)

And double check your math about HD needing 7-8M sales more, it is wrong. The correct one is

Profit Wii= $14*sales Wii -$20M= Profit HD = $18.5*sales HD -$48M

=> sales HD = sales Wii *14/18.5 +28M/18.5 = 0.76 * sales Wii + 1.51M

So say that a Wii game sells 2.5M, then the same profit ($15M) will require about 3M HD sales (in total between PS3 and 360)

The problem I have with your table is that it makes an assumption that the game will sell similar amounts on all three consoles, which is true for some genres/games, but false for some others. Maybe I was wrong in my approach to take things on a more general level, i.e. a game that would cost 20M to develop on the Wii and 48M to develop on the PS360, but I think it is fair to look at what kind of total sales generate what kind of profits.

You're right about my math sucking, I stand corrected. Prompted by this I made some calculations about how the Wii vs. PS360 platform profitability changes regarding the development costs but that work is still in progress. I want to find out, based on a number of different assumptions, what is the "sweet spot" for Wii development and for PS360 development as well. So, basically, what kind of projects should be allocated to what platform, based on sales and dev cost expectations. Once I get some results I am happy with, I can post them here if there's any interest.