|binary solo said:
That's the $2 million. Don't retailers get screwed on new games?
Last number I saw was that the retailer gets $15 from a $60 game:
As you can see, for a typical console-based video game that costs U.S. $60:
- $15 goes to Retailers: eg: GameStop, Electronic Boutique, Walmart, Amazon
- $7 goes to Returns/PP/MDF: Returns are money paid-out to retailers for product returns. PP stands for “price-protection” which is money paid back through the chain if/when the publisher reduces the video game’s price. MDF stands for ‘Marketing Development Funds” which are paid to retailers for promotions such as TV ads, local flyers, and in-store marketing displays.
- $4 goes to Distribution/COGs: Distribution = shipping and warehousing. COGs = Cost of goods sale. ie: the cost of the physical DVD, manufacturing, the instruction manual and the case.
- $7 Platform Royalty Fee: For every game sold approximately $7 goes to Microsoft, Sony or Nintendo, as applicable, for whatever platform the game plays on – eg: Xbox 360, PS3, Wii.
- $27 goes to the Publisher. Unfortunately this $27 is not further broken down to show how much of the $27 typically goes to independent developers. The amount paid to independant video game developers can be anywhere from 10% to 70% of the amount paid to the publisher – but often only after the publisher has first recouped any advances paid to such third party developers.