Namco Bandai Holdings Inc., Japan's second-biggest maker of video-game software, must sell at least half a million copies of a game for Sony Corp.'s PlayStation 3 console to make money on the title, said President Takeo Takasu.

Graphics for the high-definition games cost about 1 billion yen ($8.6 million) to create, more than double that for Nintendo Co.'s Wii titles, Takasu said in a Tokyo interview Nov. 28.

``We have to sell at least 500,000 copies per title worldwide to make a profit on PlayStation 3 games,'' said Takasu. He said titles for the new Sony console are ``selling well.''

Shortages of the PlayStation 3 may also make it more difficult for software makers to sell enough games. Tokyo-based Sony halved shipment targets for the console this year and delayed the European release amid a dearth for some parts. The company may have missed its goal of shipping 400,000 consoles in the U.S. earlier this month, according to analysts including Jeetil Patel at Deutsche Bank Securities in San Francisco.

``Game makers may hesitate to make games for a console if its shipment is being delayed,'' said Yuuki Sakurai, who helps manage $6.02 billion at Fukoku Mutual Life Insurance Co. in Tokyo. ``Some game makers may wait until a console becomes popular because of increasing production costs.''

Tokyo-based Namco Bandai expects games for the consoles introduced this month by Sony and Nintendo and a year ago by Microsoft Corp. to account for 10 percent of software sales, or 3.15 million units, this fiscal year ending March 31, Takasu said. The company sold about 26,000 titles for Microsoft's Xbox 360 last year, when it was introduced.

Namco Bandai developed two titles, the ``Ridge Racer'' car racing series and the latest ``Gundam'' shooting game, for Sony's PlayStation 3's Japan debut on Nov. 11, and will introduce four titles for Nintendo's Wii this weekend. The Wii offers a motion- sensor controller without high-definition graphics.

http://kotaku.com/gaming/ps3/namco-ps3-games-must-sell-500k-for-profit-218215.php

ya so...? im guessing pretty much everyone around here knows it takes a lot of money to make a ps3 game, so obivously one need to sell more to make profit on it

This is crap. Does anybody believe they spent almost 20 millions $ for Ridge Racer 7 (they already worked on next-gen RR for Xbox360) and Gundam? Gears of War cost around 12 millions $ - this sounds reasonable. There is no comparison (motion capture performance, art, etc. ) If some game doesn't sell it's not a problem of a system it's a problem of the game itself especially on the very beginning. They just can't provide a new title of a big franchise every 9 months. I believe even Square-Enix can destroy FF and DQ franchise if they won't be moderate. Sega has problem with VF already, RR, DMC is dying too... They just have to provide something new.

I apologize for the harsh nature of my comment, but you're kind of digging deep to get this story aren't you? I mean, November 30th of last year is somewhat outdated, and I imagine already discussed. I mean, while we're at it why don't we dredge up every several month old article about a bad aspect of various consoles, I'm not saying this article isn't interesting, its just old news.

On another note, I guess that means Insomniac is one of the only devs that have actually made money then.

Regardless on whether you believe the numbers that he puts on, higher development costs act like a double edged sword for game developers. Higher development costs mean that you need strong sales performance fromg games so you have to take far less risks (meaning evolutionary game design rather than revolutionary game design); at the same time for games to maintain their sales with each iteration you have to make large changes (improvements) in how the game plays.

Essentially, if you take risks you can lose a lot of money immediately because the game does not sell well ... if you don't take risks you will lose a lot of money over time as the series becomes stagnant.

I wonder why Japanese companies are making any 360 games at all since those are gonna sell even less than PS3 games, unless they sell over here (Dead Risins, Lost Planet)

10-15$ royalty fee to console maker, 25-30$ profit for each game sold to the developer

now you have $15-$20 left for manufacturing,shipping and retail share of the pie

500000 x $30 = 15mil (paid developing and ad fee)

seem pretty accurate to me....

btw Epic sell their engine out to others, that'll lower their fixed cost of making that engine, and now you are a company have to write your own engine and you dont sell it out to lower the fix cost. your cost of the game will be higher than gear of war. Thats why we see alot of pc developer is buying Quake or Unreal engine, to lower cost of making their own engine.

Not quite accurate. Royalty fee is probably a bit less. I think you are confusing profit with revenue. The developer does not earn $25-30 profit, only revenue. Whether a title earns any profit is decided by development costs and sales volume.

High quality graphics is an asset. Asset devs get from a system manufacturer. It costs but there is a big chance for an outstanding reward. It's like in cinema - you spent a lot of cash to provide an excellent FX and superior cast but it works. I would be surprised if Namco spent 2 millions for RR7. Take a look on Gears of War success. Graphics is something that attract gamers.

It makes sense, but this is old news. Anyway, 500k is no problem for established franchises, but it is a big risk for new IPs...