AAA money

[SuperNova]

elazz said:

SuperNova said:

Looking at price charts over time for the game 40$ seems a fair average for the relevant timeframe around launch.

HDZ  released at 60$ in the beginning of march and then started a slow decline, until  by the beginning of june it hit 40$, where it has pretty constistently stayed ever since.

HDZ sold 2.6 including digital within it's first two weeks on the market, at a 60$-55$ dollar pricepoint. On average, with sales being tilted towards launch that probably works out to a 58$+ average for those first two weeks.

As of April 30th when we arrive at the 40$ pricepoint it had sold over 3.4 million. So thats a 55$ - 40$ decline over the following six weeks in wich 800k units of the game were sold. We will take a perfect average here, ignoring that the digital price probably didn't deteriorate as fast and the game stayed at 60$ digital for longer, so 50$ average for the following six weeks of sales.

The retailer cut is 10$ - 15$ as previously stated, so lets assume 15$ for the purposes of this calculation. Shipping, manufacturing and packaging can be comfortably estimated at 5$ per unit.

58$ - 15$ retailer cut - 5$ packaging, shipping an manufacturing = 38$ before licensing fees are deducted those are 30%, or 11,40$ in this case.

38$ - 11,40$ = 26,60$ This is the publisher cut in the first two weeks.

26,60$ x 2.6M = 69.160000

Same considerations for the following six weeks with 800k of sales:

30$ - 9$ = 21$

21$ x 800k  = 16,8M

Publisher cut before sales price in store hits 40$ is: 85.96M. Pretty damn close to what was assumed in OP.

In HDZ case it has seen a steady sales price of 40$ since, so on every sale from may going forward they make 14$ (this is after licensing fees). At that rate it would take them 1M additional copies sold LT to reach pure profit. Something that HDZ is likely to achieve with it's first holyday.

You are forgetting one thing here. Sony is the publisher so there is no publisher cut. They developed and published the game. Sony owns Guerilla so they are funding development and marketing. 

So the actual calculation is as following: total amount - retail - distribution

So out of 60 dollars average price (not taking into account other currencies) we have about 2.5m retail copies at that price (60-15-5) = 100m and then an average of 900K digital at 60 dollars = 54m which brings us a total of 154m revenue for Sony on Horizon. Then we have probably another million at an average price of 30 dollars and taking into account special and collector's it's safe to say the revenue for the game by now is hitting 200m almost --> with that development is paid, marketing is paid and also other costs looking into worldwide studios, sony corp etc. but it already made a good profit and will do so till the end of the year. 

Selling 5m copies within a year is succesful for most AAA games. Then you have those from EA, Activision, Rockstar etc. that need to do 10m 

But then you have the AAA league that needs smaller sales since the budgets were smaller. Like 1 up to 2 million

You're right of course, only I did not forget that, but deliberately ignored it, because we happen to have quite detailed numbers for HDZ, but not for others. HDZ already made sony their money back and then some, but I was trying to give an example that would also fit for a third party publisher, so I included the licensing fees in the calculation. My point was to show that 40$ for the first 3M is not an unfair average, for a game wih similar quality and marketing budget.

Also, yes HDZ is quite successfull of course, but even less successfull games with a similar kind of development and marketing budget will make their money back with gamesales alone as long as they break 3M+ LT, wich is not that unusal. Shadow of Mordor for example, whose sequel is hotly debated in the Lootbox, microtransaction, DLC in 60$ games mess sold 5.9M ww across all platforms.