"Wii Third-Party Struggles Highlighted by May NPD" - GameDaily

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Bodhesatva said:

Kasz216 said:

Bodhesatva said:

Viper1 said:

Bodhesatva said:

Viper1 said:
Hey Bod, you're calculating retail cost, not wholesale.

Right? As I said, 4-5 of the extra 10 retail dollars go to the producers. Can you explain what's wrong with that?

Because retailers don't buy the game at $60.00, they pay approximately $48.00 from the distributor (Jack of all Games, D&H Distributing, Ingram Entertainment, Mecca electronics, etc...) who pay even less from the publisher. ~$40.00 depending on their annual unit contract.

 

Now you want to redo your math?

That's exactly what I did, we're just looking at this from different angles.

Of the 60 total dollars, retailers get a share, developers get a share, publishers get a share, console manufacturer gets a share.

Both the Wii and Ps3/360 suffer from this problem, the difference is that with Ps3/360 games, retailers get an additional 2-3 dollars, the console manufacturer gets an additional 2-3 dollars, which leaves an additional 4-5 dollars for the publisher/developer, totaling 10 extra dollars.

Let me put it more generally: there are 10 dollars more to go around with each game sold on the PS3/360. Some of that 10 dollars go to retail, some to the console manufacturer, and whatever is "extra money" for the developer/publisher. That extra money adds up when you're talking about large amounts of sales.

The question is... are you sure that the developer is even getting any piece of that larger price... You've also got to add in the extra expenses that HD console development can bring shipping and production wise.

I am adding in that extra cost, Kaz. That was the whole point of my post.

If you don't sell many copies, then you don't make the extra development costs back. If you sell lots of copies, you do. Look at simple examples.

Wii game: 10 million dev cost.
PS3/360 game: 20 million dev cost.

If we assume each PS3/360 game gives 4 dollars extra per copy, then the following math holds:

1 million copies sold: The PS3/360 game makes 4 million dollars more than the Wii game. The PS3/360 game therefore "makes back" 4 million of the additional development cost.

2 million copies sold: 8 million dollars more than the equivalent Wii game.

2.5 million copies sold: 10 million dollars more than the equivalent Wii game.

In this simplified model, a 10 million dollar Wii game and 20 million dollar PS3/360 game have made equivalent amounts of profit. Whatever the profit is is irrelevant; if it's 100 million dollars for the Wii, the PS3/360 version has made 100 million also, but it has done so by producing 10 million more revenue and costing 10 million more to make.

Now, any copies sold beyond 2.5 million mean the PS3/360 project has made more money.

 

 

 

I'm not entirely sure where the cut off point is,of course, but I don't think there is any question that the mega-hit games on the PS3/360 make more money than the mega hit games for the Wii, even when you factor in development cost.

That's true, but so is the opposite. I doubt the 10 dollar difference on a flop is proportinately large enough to make up for the extra development costs, assuming say, only 100,000 units are sold.

 

For instance, at 100,000 units sold, a PS360 game makes an extra million dollars. If a PS360 game costs 15 million dollars to make, and a Wii game costs 10 million, it would have to sell at least 500,000 copies to lose more money on the Wii than it would have on the PS360. That is assuming all of those copies sell at 59.99.

 

In reality, the cost difference between the average 3rd party Wii game and the average 3rd party 360 game is probably closer to 10 million. Not to mention that the game can then be ported to the PS2.

For instance, take the excellent and obviously super expensive game, The Darkness on the 360. It sold under 500,000 units. It probably cost in the realm of 7-10 million, I'm assuming, from just playing the game and guessing. Then look at Haze, ect. The game has amazing production values.

On the other extreme, a game like Carnival games, Rabbids, or even Red Steel 2. If they only sold 500,000 units, they would have easily doubled their development costs. An exception is Boom Blox, which I feel didn't cost nearly as much as some people think, to develop. It still probably costs a pretty penny, and at this point, it is almost certainly not making its money back from the Wii sku.

 

However, EA has said that the game could be ported. Now, it would obviously be without motion controls, but if it is, that tears the argument up, that Wii 3rd party games can't be ported to other consoles because of the controls. It is much more likely that graphical standards would prevent these ports, however, just look at the probably excellent Disgaea 3, and you can figure out that PS3 games don't have to be graphical powerhouses to get hype.