MGS4 Doesn't need 1m day one sales--Payton misquoted

[Ail]

dabaus513 said:
I already started a thread about this but its dead. Anyways i checked to see how much assasins creed has sold and its about 2 million (ps3) so if assasins creed (emphasis on ASS can at least reach a million i have no doubt mgs4 will at least reach a million.

 

It all depends development bugdet.

My guess is that on a 60$ game the developer gets back 30$ ( I've seen Bestbuy drop prices of games by 20$ on a given week so they make more than that as a margin and 50% is typical for retailers) if he was the distributor too, less if another company is the distributor like for Square having Ubisoft distributes their game in EU.

Out of those 30$ they probably have to give around 10$ to Sony which leaves them with 20$.

Packaging and shipping probably comes out to 1 to 2$ a game ( depends size of manual, art and so on but seems reasonnable).

So we're down to 18$/game.

1 Million copy is 18 Million $ that seems more than enough to cover development costs of most games but once again it depends the size of the development team and the duration of said development. It depends heavilly too on the marketing budget, I know for movies it's not uncommon to have a marketing budget that can be as much as 50% of the movie cost.( 100 Million $ to make the movie, 50 Million $ for marketing..).

Typical US software developers cost around 120-150k a year for software companies ( I should know that I work in Software, that includes building, benefits, HR and so on), it's probably a LOT less in the game development business if my understanding is correct. But still probably around 80k/year cost for a US developer doesn't seem wrong ( seems low actually but a lot of games companies use entry level developers that they exploit for a lot of the tasks and their low cost offsets the salary of experienced older developers and producers).

50 developers/year = 4 Million $ a year...

So lets say it takes you 2 full years to develop your game with an average of 50 developers/year ( less at start, more at the end with QA and stuff) you have around 8 Million $ development costs.

Add 4 Million marketing budget ( really a wild guess but doesn't seem unreasonnable) and you're up to 12 Million $ development/marketing costs.

So with 1 million sales if you are the distributor you come out making a decent 6 Million $ profit ( 50% ROI which is good).

Much less if someone else is distributing your game but I have no clue what is the cut of the distributor...

Of course if you take 3 years to develop your game and are up to 100 persons involved the third year like for some of the big budgets games then you are up to  16 Million $ development costs, and usually much bigger marketing costs ( adds on TV aren't cheap) so it can add to 25 Million $ or more ( I woudn't be surprised if a game like Assassin Creed costed over 30 Million $, maybe as much as 50 Million $ with development and marketing costs, but they still made a nice profit and the costs of the later game in the serie will be much lower and that is when Ubisoft will farm the cash).

 

PS : I didn't factor distribution costs as I have no clue what they are but the fact that you distribute your own games doesn't mean you won't have costs associated to that or everyone would do it lol :P

One thing to notice is that when you are up to 100 persons working on the game at the end, every month of delays costs you close to 1 Million $ as you have to pay those developers as well as keep the buzz about the game going ( marketing..)

All that said and done I doubt 1 million total sales will be enough to cover the development/marketing costs of MGS4 ( although in that case I am willing to bet Sony will shoulder a lot of marketing costs due to it being an exclusive). I'm guessing it will take  Konami 2 million sales to recoup their costs and more to make a profit...