Will Sony Copy Microsoft and Make Playstation a 3rd Party Publisher?

[Qwark]

Cerebralbore101 said:

Qwark said:

In movies the general rule is you need to make at least 1.5 to two times the costs for it to be profitable. I do t see why that's different for games. So a game costing 200 million, better bring in at least 400 million of revenue. Playstation is now one of the biggest players in the business, however without PlayStation hardware, they are not much bigger than EA. Sony doesn't release and sell that many titles a year.

That doesn't make much sense. If revenue is even 1% higher than production costs you have made a profit. I'm assuming that in the movie industry they count revenue as ticket sales revenue and then movie theaters or distributers take a bunch of that money before the movie in question sees it. But with games being mostly digital these days and with 1st party games not having to pay a 30% royalty tax none of that logic should effect 1st party videogames. 

This is the problem as someone else pointed out. Without Playstation Sony is just this Bethesda-sized publisher in MS/Actiblizz's ocean. This is why I think it's suicide of them to go 3rd party. It's as awful a business decision as when Sega surprised-launched the Saturn in the USA. 

You need to take into account inflation and financing costs (over the duration of the development time). Usually what we hear are the raw investment costs as development costs. Money which could have been used differently to make money a lot faster, than game development does.

We also need to take into account for every game Playstation releases it cancels projects as well. Those projects have costed money and that money needs to come from somewhere. So if PS made only 325 million on SM3 and SM3 costs 330 million to make, it's not a good thing for PS as a whole. Even though it made 10% more revenue than initial dev costs.

If we look at total costs of a game we need to take into account that selling games also costs money, you need advertisements down the line, keep printing discs, stores take their shares and bring out a lot patches as well.