Halo 3 sales reach $300 million in first week

[Gazz]

rocketpig said:

Gazz said:
MS has the same development costs as any company so don't forget to add that money. I also wonder how money MS made or lost on this game and how much their worldwide mediablitz had cost. Retail, taxes, shipping takes it toll on every product so if MS really made a dime on this is debatable.

I read somewhere that the entire worldwide media campaign alone has cost them 50-75 million, but can't seem to find the link for that one so quickly. Seems plausible since Halo 3 ads are on all the time in every country on every station.

Yes, MS has the developmental costs. But unlike a second or third party game they publish, they keep ALL the profits. There is no splitting the revenue between publisher and developer. It's all theirs. And they made ~$300m the first week.

Subtract distribution and retail markup, I'll be EXTREMELY generous and subtract $100m (retail markup on games is usually 20% or less and distribution can't even be half that). Add import taxes (which couldn't possibly be higher than 10% overall) and we're down to $170m. Add in manufacturing costs (again, generous at $5/copy overall) and that comes to roughly $20m. So now we're down to $150m. Add in your marketing costs ($75m) and we're down to $75m. Shipping costs are negligible when we're dealing with these kind of numbers but I'll give you $5m.

The actual developmental costs of the game couldn't be $70m. Correct me if I'm wrong but no game has ever breached $50m in development.

Unless I'm forgetting something huge, MS has made money on H3 already using extremely conservative numbers in my estimates.

Your numbers seem fair enough, let's continue this game. You did leave retail taxes out of these numbers though and is this 300 million number for games alone or do they include the consoles in the halo packages? Since MS still makes a small loss of 35 or so dollars this affects numbers too. So that would mean 75 dollars (that's what they charge for halo in the us isn't it?) -x% retail taxes(19,5 in the Netherlands wjere I live).

@Dodece, I doubt the red ring loss of a billion dollars will be solved by this game. Even if it generates way more then whatever the outcome of these calculations maybe in the next few days, it's final profit will not be likely to make a significant difference in the financial numbers of MS's games division which has never in it's excistence made a profit since they started the xbox project. Let's not forget that even with the new 65nm cpu chip that's supposed to be in the 360 they are still overheating and making things worse.