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Squilliam on 24 August 2010
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Final-Fan said:
Squilliam said:
Final-Fan said:
Squilliam said:
Final-Fan said:
Even if I grant all the stuff you said, Squilliam, I don't see it making a 37% difference into a 300% difference like you suggest. 
blah blah blah

Look, I could argue a lot of that stuff, but what I'm focusing on right now is that you're saying that it magnifies the difference in profit per unit by OVER EIGHT TIMES.  You are really confident this is the case? 

Nope. Im figuring total number of units on the Xbox 360 and PS3 for third parties are about equal each with the Wii, so the overall market on the DX9 consoles are around double the 3rd party market share on the Wii. From there I consider that the average cycle for a lot of games is very short so that limits packaging, warehouse and production costs by doing large runs and the average sale price is higher. So I figure they must make at least 50% more per unit of a DX9 console sold than they do for the Wii. Hence my maths, 200% * 150% = 300%.

1.You initially said that third parties got $32 on Wii games and $44 on PS3/360, 37% greater.  At this point I'd like some kind of source, at least to show that it doesn't already figure in the DLC you refer to that is letting you speculate a bump to 50%.  (Mind you, this would be AVERAGE; many many titles have no DLC at all; the more I consider this the more I wonder if you aren't seriously overestimating this.) 

2. And am I to understand that you are backing down from the "or 400%" part then? 

3. Also, what are you basing this figure of PS3 and 360 together being double Wii with respect to third party market? 

4.Lastly:  Do you realize you are not factoring in cost of development?  It is well known that more HD means more money to make.  And this also applies, I believe, to games heavy on cinematics which are also more prevalent on those consoles. 

5. P.S.  Also, at the level of a particular studio, it takes more time to make such a game IIRC so they make fewer games over time. 

1. I was speculating, and as I found more concrete numbers I used them.

2. It was a part of a range was it not? That was an extreme end and I refined my numbers with research.

3. I used the rough total market size minus uncontestable sales by third parties, usually bundles. So minus some Forza 3 and Halo: ODST and Wii Sports / most Wii Sports Resort and all Wii Play, Wii Fit however I kept in. I figured it was the approachable market size as seen by a third party.

4. It is impossible to factor in the cost of development because the unknowns are too big. How many projects are cancelled during production? There are even games which were finished but have never been released because it wasn't worth the effort. Also things like engine development, reused assets and royalties for technology also complicate things. Revenue is the easiest and most accurate and I felt that including costs would reduce the accuracy of my tentative explorations of this concept. It may not be complete but it does have hard data to support it in the form of publisher quarterly results.

5. It takes longer yes, however they tend to make more games with fewer staff as they produce more sequels. For instance many games in this generation are now 24 months between installments when the first version took over 3-4 years to make.



Tease.