I think that the point is that the developing costs are not that important with high enough sales volumes or big enough projects.

Take an effort on the scale of a new GTA or MW: about $50-70M to develop it on PS3+360+PC, about $100-150M of marketing and launch expenses. On average let's say that's $190M. Aims to sell about 25M copies between all the platforms, at $60 retail for a return of about $21-23 per sold copy. That will diminsih with time but such a big project would probably be quite front-loaded, so let's say that aims at raking 75%*25M*$22 = about $412M, with a profit of about $222M. Then you have a big infrastructure for DLC and extra profit sources with quite high margins.

Think of the alternative Wii platform: $16-20M for the development of a big project, that means a final total cost of average $143M versus the $190M of the HD+PC version. Game returns more about $15-$18 per sold copy. To rake the same profit ($222M) you would need to sell for $365M/(75%*$17.5) or about 28M copies on Wii alone. Plus the Wii platform doesn't offer the same degree of opportunity for DLC profits.

Really, unless you're developing a game that you expect to resonate with the greatest part of the Wii entire audience, the first option seems a safer financial bet.

I wouldn't doubt it. Break even point must be low...maybe half of whatever HD games need, which is somewhere between 750k-1M.

"I think that the point is that the developing costs are not that important with high enough sales volumes or big enough projects."

Except that wasn't his claim. He claimed that GTA would generate more money on the HD systems with no proof other than the assumption that... actually I don't think he gave a concrete reason why.

"Think of the alternative Wii platform: $16-20M for the development of a big project, that means a final total cost of average $143M versus the $190M of the HD+PC version. Game returns more about $15-$18 per sold copy. To rake the same profit ($222M) you would need to sell for $365M/(75%*$17.5) or about 28M copies on Wii alone. Plus the Wii platform doesn't offer the same degree of opportunity for DLC profits."

But you are assuming the marketing will have to be equal cost, instead of lesser since it's one system. I think we can assume a budget of $50-$70 million for marketing.

Well, I read that in that way because he was talking of the game retail price versus the cost. And thus the math I presented.

I can't see why the marketing should be halved: you have to balance how much you want to spend in marketing with the market penetration you need to cover it and to rake the profit you want. Even following your ides and taking a $60M of marketing and launch expenses, you'd end up with a $78M budget. To get the same profit you'd then have to sell $300M/(75%*$17.5)= about 23M copies on Wii alone with half the launch and marketing budget, and thus a much lesser exposure than the HD option.

And then, diminished DLC opportunities.

Does it really look more likely than the HD+PC option to you?

"To get the same profit you'd then have to sell $300M/(75%*$17.5)= about 23M copies on Wii alone with half the launch and marketing budget, and thus a much lesser exposure than the HD option."

That's still going by a very rare number in game sales. I don't think MW2 is even at 20 million total right now. So using profit numbers this high is not a realistic comparison. It seems you went that high just to reach a number to make the Wii look less profitable, when that number is the exception, not the rule. Try something that actually shows up more often.

"Blockbusters like GTAIV or MW2" were brought in the discussion in previous posts, and it looks to me like nowadays 25M copies sold on PS3+360+PC is the ballpark of the sales we're talking about for this case. MW2 is tracked today at 18M+PC sales and it still charts very high, plus it will rake in alot in DLC form so the numbers for profits are of the order I named.

The whole point was that with big enough projects you have to sell to an extremely high percentage of the Wii audience to get the same profits because 1) you're only one platform and 2) the lesser margin on each sold copy. Now, you can say that other cases are more common, but the point stands for the specific case that was brought to attention. You asked for the math supporting the notion, after all, you did't ask to shift the focus to smaller projects.

The real problem with these companies is not how much they spend on technology, but how much they waste on pre-production and cancellations. Also in how much is wasted on employees to keep them "happy" and staying with the company.

Pre-production is dreadful. It is basically a time when there is no direct game to work on because nothing has been decided or approved on yet. It is the opposite of crunch time. In many cases, it is a gigantic waste of money as most employees aren't needed for this process.

The good companies know when to initiate pre-production and how to keep projects moving along so that one is finished another one is just getting started.

"and it looks to me like nowadays 25M copies sold on PS3+360+PC is the ballpark of the sales we're talking about for this case."

Except none have sold that much yet on those systems, so that's not a ballpark.

And I didn't really ask for math as much as pointing out his sucked. He actually claimed the wider audience actually required more to be sold. I could understand needing to sell more because it's one system, but needing to sell more because there are more systems sold makes no sense.

Plus aside from the biggest series, too many spend money on the HD systems as though they were the biggest series.

Wow, what a way to make up numbers and spin things to suit your own argument... my head spins reading this.  You say "on average 190M" and set sales at 25M when games like GTA IV haven't even hit 15M MW2 has hit the 17M mark and might be able to hit 25M if it doesn't drop off harder cause of market saturation of said title.  (PC sales for both have been said to be rather weak, mainly because both were pretty terrible ports)

When the marketing budget for MW2 was 200M alone without development costs added in (http://ve3d.ign.com/articles/news/51534/Modern-Warfare-2-Cost-200-Million-Hidden-Game-Modes-Unlocked-On-PC) 

So really you can theoretically make more money if you somehow can achieve such sells on the HD consoles, but they haven't and thats why publishers, developers, and other game companies are hurting.  You low balled the marketing cost, you overshot expected sales by a mile, and then act like 25M is able to happen without the game going down to budget price.

This is utterly absurd, your idea could work if it happened in practice, but it doesn't and nothing this gen has even pulled those kinds of numbers except for Wii games (so far Wii Sports, pack in, and Wii Play, which Mario Kart Wii coming along)... it really baffles me.  

Anyway, you're just flat out wrong on the DLC thing, on Wii you can sell and support DLC, hell every game that sells DLC clearly has it marked on the box, the SD cards have been opened up to developers to take advantage of, if they don't then its their own fault, I know Guitar Hero and Rock Band have and likely benefited from it.  

Reggie says most Wii games can make a profit with under a million sold.

And after you played some of them you know why... you get what you pay for. Some Developers are simply not going for high production value...