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Soundwave on 12 June 2024
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Chrkeller said:
Soundwave said:

This is going to be lost on you because I don't think you can understand basic economics and this is probably way above your head, but for everyone else who might care to actually learn something, here's actually a factual run down on how budgeting works in video games and why Sony is telling their developers that going above 350 mill in budget even for massive budget games is getting into a very dangerous spot. 

This is from Sony's internal data leak, this is their numbers on Spider-Man 2018 which sold over 20 million copies

So we have just under 800 mill in net sales (very good). Development costs is your dev budget, COGS for people who don't know is shorthand for Cost of Goods and Services, Marketing is well marketing. 

We see that on this game Sony made minus Marvel's royalty (which is in line with what 3rd parties pay for their own licensing fee so this is actually an example you can use roughly for a 3rd party too) is separate from the budget. All told after everything it comes out to about $352 mill in profit, quite good no?

Now Spider-Man 2018 had a 128 mill dev budget (says so right there), Spider-Man 2 on PS5 had a $300 million dev budget. If games get into the $350-$400 range you can see why Sony is worried. A 350 mill budget on this same game would take a massive chunk out of that 352 mill profit, it more than halves it. 

It's not bullshit, if the dev cost becomes $350-$400 mill almost their entire profit margin with sales in the 20 million sales range get wiped out. 

Sony is not greedy when they are internally telling their devs that going over $350 million is a massive problem. They are 100% correct in telling their developers they can't go over $350-$380 mill because it makes their games barely profitable even at a 20 mill sell range. 

You can also probably understand now with Starfield at $400 million why even Microsoft with sales probably nowhere close to Spider-Man 2018 got whiff of that Starfield stink and went running to "test" PS5 ports. 

Spiderman 2 is currently the 13 best selling game in the US this year.  Thus it is still making money. 

This will likely be beyond you, since grade school economics is beyond your comprehension, but Playstation is brand.  Not only is Sony making money from spider 2, but Sony is making money on DLC, third party licensing fees and PSN subscriptions.

Sony isn't hurting for money.  The rich want more, as always, and you are silly enough to fall for it.  

Their internal documents say otherwise. $350 million is a danger zone, they say so themselves, you can shoot all the hot air out of where ever all you want, Sony's internal docs say it in black and white, that's what they actually think and these are the numbers they are looking at.  

I am taking their word for it over yours and doing even rudimentary math you can see exactly why they are worried. At 350 mill budget most of Spider-Man 2018's profit margin is wiped out. That's not greed, that's the business reality.