Heavy Rain cost €16.7 million to make and made Sony "more than €100 million"

[Slimebeast]

Ail said:

Slimebeast said:

Some here have rightfully tried to expose this blatant lie and do their own calculations.

2.4 million copies at $30 gives $72 million in total revenue to the publisher (Sony). This assumes that all copies were sold at full price, but let's assume that for arguments sake.

Now how much did the game exactly cost including marketing? I have a hard time believing it really cost €40 million including marketing because that means over $50 million in total spend which just sounds unrealistic for a fairly "niche" game like Heavy Rain. Also, if it truly was $50 million that would only leave $22 million in profits to split between Sony and Quantic Dreams. So the €40 million (=$50 million) figure was just speculation from the Quantic guys' part.

Most likely this guy in the interview only had the €16.7 million dev cost (what his own studio spent) correct since he doesn't seem to have any clue about publisher economics. Anyway, €16,7 translates to around $22 million and if we add a more reasonable $15 million for marketing the total spend becomes $37 million. $37 million would need 1.2 million copies sold to break even, which also sounds like a reasonable original sales target for Heavy Rain.

So in conclusion, a reasonable estimation of total profit lands at $72 million minus $37 million = $35 million, which is very far from "more than €100 million" (=$130 million), but still very impressive.

Your estimates are correct except that Sony and Quantic probably do not split the profit. It depends on their contract but typically the publisher will get a much higher share of them .( depending on contract in some cases the contract can be such that the developer only recoups development cost until the game reach certain milestones and then the developer starts sharing the profit, before those milestones the publishers pockets all profits..)

But yes I agree with you, the majority of the people do not understand how retail works at all.

As for copies being sold at full price, that is actually a half decent assumption as if a retailer drops the price it does not necessary means the money the publisher gets drops too ( the retailer gets the game for roughly 30$, recommended price is 60$, it's up to the retailer to pick a price in between, no matter what he picks, the publisher will still get 30$ per copy ( at least for the first few months, later on things can change as publisher can drop the recommended price and their share..)

Yes, absolutey. I agree with everything you said. By using the word "split" I didn't mean 50-50% (does "split" mean exactly that? I'm a foreigner so I don't know lol).

Yeah, typical for a contract is that the publisher takes nearly all the profit but the developer gets royalties based on a pre-set percentage in the contract (a percentage that often progressively is increased if the sales meet certain targets).

I agree that $30 is a rough but reasonable amount to use when we estimate how much each copy of a game sold represents in revenue to the publisher.

For third party publishers it's probably a little less than $30 and for Sony/MS/Nin slightly more because they obviously take the licensing fee of $7-8 for themselves (but on the other hand they tend to sell the first party games a few dollars cheaper on average so the difference isn't actually $7-8).

About the copies sold at full price, it depends on the game. Like you and I did here, for arguments sake and simplicity it's often easiest to just assume that every copy is $60 and the the publisher gets $30, but factors that decrease that amount are:

* when the publisher allows the distributor and/or retailer to return unsold copies

* when the publisher gives the retailer a rebate on their next game due to one game flopping and ending up on bargain bins

* when the publisher decides to give a discount to a big, important retailer chain like Walmart (according to Patcher this happens)

* when a game is bundled

* when a game gets GOTY editions and re-release editions, which retail for substantially less than $60