By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Sales - Shouldn't Activision Blizzard be making more money?

Ail on 07 November 2010
Shorty11857 said:

They make $289 million in a quarter from MMOs, so I assume that's pretty much all WoW and their statements say the cost of sales of MMORPGs is $61 million, so that'd be the cost of keeping WoW running, so that's $228 million gross then you have to take account of advertising the cost of running Blizzard and whatever else they have going on. I wouldn't be surprised if Overall Blizzard made a profit of about $100-$125 million


Incorrect, the cost of sales doesn't represent what it costs to keep Wow running.

It represents the cost associated with the sale, in this case it represents the fact that in Asia Blizzard sells wow through a third party( wow doesn't run on Blizzard servers in China). ( basically for every 2$ they make in China they give back $ to another company).



PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !

PS3-Wii gap : 20 millions and going down !

Around the Network
Ail on 07 November 2010
mundus6 said:
Ail said:

Wow costs are a lot higher than you estimate them to be( I think the Wow team itself is  close to a thousand employees now, I read an article about it awhile back)  and Blizzard is spending a lot of money on Diablo 3, and a new MMO. Still Blizzard in itself is very profitable ( I think to remember they made around 400 million$ of profit/year).

Actually Blizzard is making about 50 times as much on Wow then they are using to develop it further/server costs. This was about 2 years ago, maybe Wow isn't as profitable anymore. Some of their other projects might be costly though, but the money on Wow alone is enough to keep all of Blizzards projects running and get a lot of money in their wallets every month.


I'm sorry but Activision financial statements clearly do not agree with what you say...

Total Wow revenue for the last 9 months is 952 million$, and no they are not making 20 billion profit out of 952 million$ as you seem to imply............



PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !

PS3-Wii gap : 20 millions and going down !

elticker on 07 November 2010

kotick has probably issued R&D for the next generation of consoles so he could release his own make people pay for online, pay to play call of duty, port starcraft to his console and WoW



 

 

Serious_frusting on 07 November 2010

it confuses me aswell. I think for every game that profits a few fail. It has to be because with franchises like starcraft, WOW and COD. You need to be doing something wrong not to be prinint huge profits



Nobody's perfect. I aint nobody!!!

Killzone 2. its not a fps. it a FIRST PERSON WAR SIMULATOR!!!! ..The true PLAYSTATION 3 launch date and market dominations is SEP 1st

darkknightkryta on 10 November 2010
Miguel_Zorro said:

Look at the financials of the companies involves in this industry.  95% of the video game creators and producers are either losing money, or just barely making a small profit.  The retailers aren't making money on games, either.  The economics of the video game industry are broken as they currently stand.


Retailers are making money on games... I recon 20 dollars per game.



Around the Network
darkknightkryta on 14 November 2010
Miguel_Zorro said:
darkknightkryta said:
Miguel_Zorro said:

Look at the financials of the companies involves in this industry.  95% of the video game creators and producers are either losing money, or just barely making a small profit.  The retailers aren't making money on games, either.  The economics of the video game industry are broken as they currently stand.


Retailers are making money on games... I recon 20 dollars per game.

You recon?  I *know* they're not.

How do you know they're not?  You work as a retail manager?



thranx on 14 November 2010
Miguel_Zorro said:
darkknightkryta said:
Miguel_Zorro said:

Look at the financials of the companies involves in this industry.  95% of the video game creators and producers are either losing money, or just barely making a small profit.  The retailers aren't making money on games, either.  The economics of the video game industry are broken as they currently stand.


Retailers are making money on games... I recon 20 dollars per game.

You recon?  I *know* they're not.


I have yet to see retail stores keep shelving space for things that do not profit them. If you thik retailers make no money on games why do they stock them? They would replace that shelving space with something of value. So what do you know? What is the split from the 59.99 that retailers get/publisher/devs?  People are making money somewhere or investment in games would stop.



Chairman-Mao on 14 November 2010

Lol its pretty pathetic how little money they actually make even though they have the best selling PC and console series in the world (WoW and CoD).



thranx on 14 November 2010

A link to actual data would be better than I work, my girl friend works at. Sorry it just does not make sense unless the gamer that buys a game also buys enough non game items to offset what they loose/ miss out on selling a profitable product in that shelving space.

 

milk profit margin ( i tried to find info for egss and better info for milk but could not. please link me where you got that they sell at a loss)

A Dairy Management Inc. study on marketing of cheese, shows that
butter and margarine are the highest gross margin items in the dairy
case, with gross margins of 39.1%, while milk is the lowest at 29.4%:
Willard Bishop Consulting (for Dairy Management Inc.)
"Ahh, the power of cheese" (2001)
http://bishop-consulting.com/Reports/Cheese.ppt





thranx on 14 November 2010
Miguel_Zorro said:
thranx said:

A link to actual data would be better than I work, my girl friend works at. Sorry it just does not make sense unless the gamer that buys a game also buys enough non game items to offset what they loose/ miss out on selling a profitable product in that shelving space.

What profitable product would you put in that shelving space?  I already stated that the idea is that they buy other items that are profitable.   As I already stated, that's what "loss leader" or "traffic generator" means.  Even if they didn't, you're making one critical mistake by assuming that the people who run these companies, the people who are at the very top, are all intelligent and know exactly what is going on throughout the company. 

What do you want me to do, break confidentiality agreements by posting detailed unit price/cost data on the Internet, then linking to it?  Companies don't just casually post this stuff.    You're taking your gut feelings, and arguing with our combined 20 years of experience.  I have the data directly in front of me as I'm writing this.

I'd continue to debate this, but I don't see any point.  Either you're interesting in learning more, or you've decided that these companies make a killing off of these games, and your mind isn't open to the facts.

I'm moving on.

i never once said they make a killing. I said they make money. you said they make no profit or lose money. I do not see that happening as i do not see gamers buying enough other items to offset that, it would be a bad loss leader item. Unless you disagree with that. When you go buy games what else do you buy with them?