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Squilliam on 26 February 2011
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LordTheNightKnight said:
Squilliam said:

 Thats assuming a full price game purchase from the first shipment of software. Your margins per game sold are always going to fall considerably once you're talking about games which cost between $20 and $40. If the game price drops $10, the publisher loses at best $7 in revenue. Nintendo doesn't take any loss, distributers and disc manufacturers don't take a loss and retailers certainly also don't take a loss. So if they were making $20 at $50 they are making $13 at $40. So unless they can sell at full price, those numbers don't work particularly favourably for games which cost only $5M to develop. These are the hard numbers, you cannot deny the lower margins publishers take reflect the lower development costs. The Wii is no more a safehaven for publishers than the HD consoles are. They both reflect the challenges of retail distribution. This isn't BS spin, it is the reality of distribution by retail and the costs publishers incur from all sources in order to get their games into your hands.


1. The games that cost less than full price usually have even lower budgets*, so that isn't really a counter to my point. The games with a $5 million budget would be full price.

2. Lower prices after the first shipments count for the HD systems as well, but the high price means it's even more necessary to get high sales up front, but that does not apply to games that maintain full prices longer, on any of the systems.

3. I did not claim that the Wii was some kind of safehaven. I only stated that they would make even more money by supporting the Wii customers with more games, as the customers would buy the games. They just have to have the games in the first place. Relying on HD systems alone is not a safehaven.

 

* Like Chop Till You Drop sold over 200K, which times $13 is $2.6 million, or less taking price drops into account. Since many believe the game was cheap, it make a healty profit. I don't think it was that cheap, but Capcom still said it "sold fine", instead of "disappointing" that is usually code for losing money or pitiful profits (like Dead Space 1 and Mirror's Edge).

1/2. When publishers come in with new software like Just Dance @ $40 it says a lot about the price people are willing to pay for Wii software. This reflects on both on higher budget releases and lower budget releases respectively. So whilst the costs may be higher on HD console releases, the market revenue is also twice as much and the average sale price is at least $10 more. With the development of better art tools over the last 6 years I also believe that the costs in creating HD art assets have also declined considerably.

3. You say they would make more money and yet publishers appear to you to be engaging in a form of collective idiocy. Perhaps instead you should think of why they are behaving the way they are if they all engage in same behaviour. This isn't some conspiracy theory. So whilst they have lost considerable quantities of money I don't believe they would have done any better had they supported the Wii or if they supported the Wii more on an ongoing basis.



Tease.