| Max King of the Wild said: ^ the cost of manufacturing dont effect my numbers. if you want to look at it with all expenses it would be 55,000 x 60 = 3,300,000 worth of revenue to work with. |
Incorrect on both fronts, actually.
The cost of shipping/manufacturing, while not a "localization" cost per se, is nonetheless a major factpr in deciding whether to bring a game over or not. You see, it does a company zero good to localize a game, and then not ship it anywhere. Sales become hard to come by that way.
Second, your figures are incomplete. It not only assumes that all units will be sold at full price (they won't), but it ignores the same costs of shipping and manufacturing that you just brushed over. There's a price associated with simply creating your copy, and it comes out of that $60.
There's an additional, larger cost in moving it from the factory in China to the port, loading it from the port to the ship, paying the shippers to sail it across the ocean, unloading it when it arrives, loading it onto a train, moving it to your region, moving it to a truck, and finally having it arrive at the store. Volume helps bring down some of these costs, but each copy still must pay its own way, and that also eats into your $60.
Did I mention that each console manufacturer demands a royalty for the privilege of making a game for their system? I've heard $12 bandied about for a $60 game, so there goes another 1/5th of your money straight off the bat.
Oh yes, and the retailer isn't doing this for free. He demands his own pound of flesh for putting your product on his shelf. Kiss another $12 goodbye.
You're lucky to make half of that $60 yourself. And you STILL haven't accounted for the cost of marketing, or for negotiating with retailers, or...well, you get the point.
Would that it were that simple, but it never is.
