| Dodece said: @wlakiz Developers lost faith in the N-Gage shortly after its launch. Most of the products sales came after the platform had been abandoned, and that three million in sales even then took years to achieve. It is the difference between cutting the price to generate sales, and cutting the price to just get rid of something. Retailers ended up selling the device with no intention of reordering it to refill their stock. Which is entirely reasonable, because they were losing money on the device. In the end the device basically ended up changing its class. It went from being a gaming handheld. To being just a toy. Like the pocket poker games you find in the toy sections in most stores. If you would qualify that as being a success. I really can't help you with that. Rest assured though that Sony wouldn't want their expensive piece of kit there, and being sold at thirty bucks. At that point though they would just dump a few dozen preloaded games onto the machine, and would be done with it totally. At that point they sure as hell wouldn't be making any more of them either. Anyway you cannot use a example that disproves the point to prove the point. The increased sales from the cuts that were in fact clearance pricing didn't result in a critical mass. Thus the product failed out of the market. The increased sales that were pathetic in themselves. Didn't result in a viable product. Now if you want it all expressed mathematically I think I can help you with that. You are going to have to bare with me on this I do most math in my head. O=overhead, A=install base, B=sell through, P=profit, R=retail price (A x B)R - O = P For the purposes of this demonstration. We will use a install base of four million users. We will project a sell through of twenty percent. We will treat the standard retail price as a constant, and since we are imagining a sell through of twenty percent. We will say this is a AAA title with a budget on the low end at twenty million dollars. Covering the development, the packaging, the licensing, and advertising. This isn't conservative by the way it is a gift. This is like the perfect storm that I am giving you, and the vast majority of games won't ever get this. (4,000,000x.20)40-20,000,000=12,000,000 According to this site only one title for the Vita has actually achieved sales close to this, and it was both bundled, and has not retained its initial launch price. Only three titles have sold over five hundred thousand units. If we plug in the sales for those other two. (500,000)40-20,000,000= 0 By the way both those titles were bundled as well. I mean nothing is enjoying success unless it is getting bundled. Unless developers are being incredibly frugal with their money. Most of the games on the platform have been losses for these developers. The Vita is a really dangerous platform to develop for, because the margins are that slim. By all means run the numbers backwards and see how low a games budget has to be for the time and energy to be worth it for a developer, and ask yourself why they would put up with those kind of margins. When there is better money to be had just about anywhere else. If you can't be bothered, and just want what would equate to being a healthy install base for the platform. I would have to say around ten million. That is high enough that games can have both healthy budgets, and would stand a decent chance or reaching the needed sell through. As it stands right now the budgets have to be really low for a game to be profitable, and that means games that would in the end defeat the purpose of buying the device in the first place. I don't think the Vita users on these forums bought the device to play 2D dungeon crawlers, or to play simple puzzle games. They had to be thinking they were willing to pay that premium to play console level games. Those kinds of games have big budgets, and even bigger appetites. Pretty soon they are going to stop coming if the money isn't there. |
N-gage is your example, you can throw in whatever logic you want to justify your point but the fact remains that price cut resulted in sale improvement. I am not interested in what you think N-Gage became; I am just interested in soldifying the Supply x Demand mechanism with respect to product price and that mechanism tells us that price drop = increase in demand.
"you cannot use an example that disproves the point to prove the point"? uhh.. So you are saying that you are refusing to look at case studies that contradicts your logic?
Sure, you can propose that N-gage's price cut didn't result in the install base reaching critical mass and hence the console met its demise but what proof do you have that Vita's price cut won't result it into reaching critical mass? After having a 40% price cut, 3Ds sales boosted from 50k -> 300k and maintained a steady 170k/week; it ended up selling a 1.5 million on christmas week that year.
Apart from the awful formula where did you pull the $20 million ?
http://ca.ign.com/articles/2006/05/06/the-economics-of-game-publishing
A PS3/Xbox game cost around 10 million, I would estimate a vita/3DS game have similar cost as a PS2/Xbox game of $3-5, even if let you double the 'overhead' cost for marketing and other fees, the overall would just be around $10million. Now going back to your formula, to break even: You would just need 250k sells.
11 games hit that point for vita and 57 games for 3DS. Putting that into perspective, 11/147 = 7.4% games already broke even for vita while 3ds 15.1% of the games broke even. Given the current install base, I wouldn't say Vita is too bad.
I don't know why you keep assuming the demograph of the vita players to be the same as PS360. I am perfectly content playing a low budget dating sim/dungeon crawler game (P4G) and judging from the sales, a lot of other people are similar too.
