Ubisoft and id CEOs talk about the next generation.

[Kasz216]

NJ5 said:

Squilliam said:

NJ5 said:

Squilliam said:

On the flip side of better technology is that if you consider graphics at this level to be good enough, you can achieve better effect with less cost and effort. Theres no reason why they would have to spend the money, there are still games which sell quite well today which have relatively poor graphics by comparison.

That would be true if the games industry wasn't so hit-driven, and with publishers fiercely competing to have the best hit.

I mean, Ubisoft has already said they expect $60 million budgets to be the average in the next gen:

http://kotaku.com/5293126/ubisoft-ceo-expects-60-million-game-budgets-next-gen

I still don't know how they're going to double their revenue to maintain profit margins constant, though...

 

The average sales of these hit games have increased and the retail prices have increased and the sales curve has become front loaded so they get their ROI quite quickly. I really don't think I can speculate any further on this as its a complicated issue and im kinda tired.

Ubisoft I think tends to really deal in hit games, expensive ones at that. But currently the model seems to be working for them. They are obviously happy enough with it.

 

What I said remains true, if they double the budgets they have to double the revenue from those hits otherwise they'll make less profit or lose money like other publishers.

Let's just say that I'll be thoroughly impressed if Ubisoft doubles their average budgets and makes the same profit margins...

 

The Videogame industry reminds me of the Printing Industry.

A lot of publishers (printers) got in trouble because the only thing they focuses on for improving their profits and margins was increased sales.  They didn't find other ways to make money, expand their buisnsess due things cheaper yet the same quality etc.

Then they hit a point where they couldn't make more sales.  Traditional print revenues declined as techology got better and they hit a wall with how many sales they could get.

Then the recession hit... and a lot of them went under or took heavy beatings.

Too many executives and others see sales as infinitly increasable... the "Every person alive is a potential customer" kind of thinking.  Which while good for motivating sales employees... it just isn't so.  Most buisnesses have a cap they're going to reach... and it's good to know your limits... and how far you'll be able to get until things change.