| Xenostar said: You say most exclusive games dont make money, thats a very bold statement! Id say very few first party games from Sony and MS fail to sell less than a million if not 2 million, so i would say they definitely are profitable. I think Sony have so many good first party studios, because they have a very good internal network for sharing resources and technology, meaning they don't have to keep reinventing the wheel in terms of mastering the SPUS and Stereoscopic rendering etc. |
The truth is this: most people underestimate the cost on a per project basis, forget about the cost on an overall basis between projects which get canned at various stages of development or published products which get dropped after a certain level of development and they don't consider the cost of price protection on the hundreds of thousands of not millions of copies depending on the game in circulation if sales are poor. Nor is advertising factored into any percieved costs either.
Take game A:
Costs at 0 units shipped may be considerably lower than the costs at 1,000,000 units shipped. Many technical 3rd party tools have royalty costs which may scale as the total sales rise. A lot of games use these tools like for instance Havok, just look at the start screen of any game you play and you'll see the logo for the various technical tools. Also depending on the contract much of the talent whether it is internal developers or external contractors like actors may have renumeration packages which scale with overall sales.
Game A also has to pay for game B C D and E which never made it through production, 4/5 game concepts get canned within their development period.
People also almost never see the stated marketing budget which can total $10M for even a modest HD game release. If you're thinking also of games which get a heap of advertising you could easily double that again for a major AAA release, perhaps even triple.
Finally when they state they earnt $80M revenue over 2M unit sales they certainly don't state that they paid back $20M in price protection when the sales of the remaining 500,000 units dry up and the game gathers dust on the shop shelves.
Overall if no major publisher is making money it is unlikely that the first party HD publishers are making money either. Its simply wishful thinking to think otherwise given the fact that multiplatform publishers can see considerably higher unit sales.
Tease.
