Mistwalker is about to sell 1,000,000 copies

[Legend11]

naznatips said:

Riot Of The Blood said:
@Naznatipz:

That sounds like BS to me. How in the world is it possible for developers to profit with those costs? I've always believed HD consoles development costs are way overrated. If games really cost that much, do you honestly believe the HD consoles would get ANY support at all? A game like Eternal Sonata would destroy a company with those type of costs. You understand that you're suggesting HD games cost 40-60 million dollars to make, right? Games cost no where near that. Third-party support wouldn't exist with those costs.

Well if you haven't noticed actual profits are flat or down slightly this gen for most major companies (not counting Activision and Nintendo) despite higher revenues and a greatly expanded market.  Those companies that have seen a postive increase in profit aren't even close to seeing profit increases at the same rate as the market increase.

Wholesale price for a $60 video game is about $35.  Once you take away publishing fees and printing costs the developer only sees about $25 of that.  If Barlog is right, and I would assume he is since his entire job is making these games, then a developer of a big budget game would have to sell 1.6 million copies of a $40 million game to break even.  Obviously the amount of copies necessary to break even goes up as dev costs do.  None of this takes into account advertising either, although on the 360 Microsoft pays for advertisement for all big budget games. 

As a side note, dodece is actually correct about one thing.  The fact that Lost Odyssey uses a middleware engine certainly lowers dev costs.  Barlog's estimates most likely are for games like MGS4 and FFXIII in which engines had to be developed from the ground up along with the game, and it's very possible that LO was made for more like $25 million or so, but of course the 3 year development time also has to be taken into account...

Actually according to a Forbes* article about next gen game making (they used Gears of War as an example) a $60 videogame typically sells for $48 wholesale.  They also broke down the various costs for a game which makes it much easier to see who gets what.

Here are some more of their numbers...  $1 shipping per unit and $3 manufacturing costs (very likely $4 in the case of Blue Dragon and Lost Odyssey).  So after taking out shipping and the cost of goods there's $43 million dollars taken in for every million copies sold.

Considering Microsoft paid the advertising budget themselves (read: paid for it through console licensing fees from other games) it means that on the books these games very likely broke even.  Especially considering they obviously would have shipped more than the million sold.

*source:
http://www.forbes.com/2006/12/19/ps3-xbox360-costs-tech-cx_rr_game06_1219expensivegames.html