Currently Online 
I'll just break this down in basic, simplified math too as to what the publishers are looking at.
Take a game like Resident Evil 4 Remake. You may say, "great, it sold 6.8 million copies, that must have made a great sized profit".
Now lets break that down some, at $60 full price, you have to subtract $9-12 for the licensing fee that goes to the platform holder/Steam/whatever. Then for retail copies it's another $10-$20 off the top for shipping/packaging/retailer's cut.
But lets be honest, we all know these games are heavily discounted even 5-6 months after launch. So lets even assume a rather generous $30 average mean profit per copy sold for Capcom (some will be at full price, but lots of these copies are like $20-$30 total).
At 6.8 million x 30 = 204 million. That's not bad. If you spent $125 million making the game that's a net profit of about $75 mill.
Now imagine for a second though, that budget number goes from $125 million to $250 million in 5-6 years because you gotta keep up with the latest graphics, that same scale of game now costs 2-3x more ... then throw in also $20-$30 million on marketing spend ... that all of the sudden 6.8 million copies sold is no where near enough to even break even.
Publishers know this stuff, that's why they're looking at different business models like GAAS, even Sony is.
Games that eventually have a $300-$400 million dollar budget need to sell 12-15 million copies before you even really start to see a dime in profit of a return on your massive investment (which probably also tied that money down for 4-7+ years, which is a long ass time to wait to see any return on an investment).
Even Capcom and Square-Enix IMO can't really compete in a world of $300-$400 million projects, 6-10 million copies of a game isn't going to cut it anymore.
Last edited by Soundwave - on 12 March 2024
