Just did a quick calculation:
If we estimated $35 profit for Nintendo per physical copy (50-60% of MSRP; depending on platform) and we assume for every SW1 game sold SW2 sold two copies. And we assume the same digital:physical ratio on both platforms. All of these assumptions seem reasonable.
x1 = SW1 sales = 670,000; x2 = SW2 sale = 1,300,000
Profit SW1 = 60*digital sales ratio + 35*(1- digital sales ratio)
Profit SW2 = 70*digital sales ratio + 35*(1- digital sales ratio)
Total Profit = x1* Profit SW1 + x2 * Profit SW2 = 670,000*(60*dsr + 35*(1 - dsr)) + 1,300,000*(70*dsr + 35*(1-dsr))
If total cost = $100,000,000
$100,000,000 = 670,000*(60*dsr + 35*(1 - dsr)) + 1,300,000*(70*dsr + 35*(1-dsr))
solve for dsr we get, .498 or 49.8% to break even.
If the ratio were 1:2 (33% of copies sold are digital) then we get only $90,000,000 in revenue, and would have to sell 2.2 million copies to break even.
4.5 million copies to break even, with this ratio, would imply a budget of $200,000,000.
What is the typical digital : physical ratio for Nintendo consoles?
Last edited by sc94597 - 19 hours ago
