Most people were not saying that the average PS3 game cost between $20 Million and $80 Million, but there are a lot of people (myself included) who have been saying that big budget PS3 games cost between $20 and $80 Million. When you look at the size of the development team and the duration of development this shouldn't be a surprise; most of these big budget games have development teams of 100 to 200 people working from 2 to 3 years on these projects.

$20,000,000 to develop
$Unknown amount to Publish and Advertise

Assumed gain of $7-10 per disc sold
Units Sold = 1,210,000
Total Assumed Gain = $8,470,000 to $12,100,000
Profit = -$11,530,000 to -$7,900,000 (And that's only going by the cost to develop, not the over all cost of production or advertising)

This is also giving Sony the benefit of the doubt that each disc was sold at a gain, which we know not all were as the game is bundled in Europe.

So far we can assume they're clearly still in the hole looking at only the development cost alone. And as we of yet have the exact cost of Publishing and Advertising the game to add in, we won't know how much the game truly cost to produce or what their profit margins would be.

Either way, even if it does turn a profit, unless you can gain a profit of equal or greater value than what you put in then it wasn't a terribly worthwhile investment at least not one without significant risk.

I think Pro Evolution Soccer brings in just as much profit as MGS does. I think PES 2008 is at about 4M copies sold (guess). I can't see it costing more than Uncharted to make. Probably 15M.  

That is almost 100% pure unadulterated speculation.  Not only that, it's incredibly biased: every you've highballed Red Steel and lowballed Uncharted.  Furthermore, you estimate Uncharted's advertising budget as over 50% of the production budget... then you go on and say that it was so incredibly large because Sony used it to sell PS3s.

This is absolutely silly.  First, if Sony was leveraging Uncharted, only a fool would put that in Uncharted's marketing budget and not the PS3 marketing budget.  Second, you actually don't know what that $20m figure includes.  It may very well include the cost of advertising.  You have no idea.  Without this little piece of knowledge, your whole post borders on pointless.

Well now that's ridiculous.  Uncharted is selling much more than MP3 each week at this point, and has passed its total sales already.  And though MP3 hasn't seen release in Japan yet, if the last two releases are any indication of how well it'd do there then Uncharted would be able to cover the games lifetime Japanese sales within 1-2 weeks at its current sell-through volume.  Uncharted also has a much better chance of being packed-in with the system (not a "buy the system, pick a 1st party game" bundle, but actually putting the game inside the box) than MP3 does (and heck, obviously it has a better chance of any sort of bundle), will get a boost when its inevitable sequel arrives while the Prime series is basically done, and since it's already a better seller world-wide it'd probably stand to gain more from a greatest hits release (not to mention the price change would be more drastic, making it seem like a better value).  Yeah, it's not too likely that Uncharted will hit 5 million (2.5 is quite easily possible), but that is significantly more likely a possibility than Metroid Prime even hitting 5 million, let alone 10.

Also, why do I get this feeling a lot of people think these companies don't get money when their games are packed in?  You think when a bundled game is sold that the company just gives them away?  This is business, not charity, and you can be guarenteed that when MS sold 1-2 million copies of Marvel Ultimate Alliance with 360's that Activision got a fairly large chunk of change for it.  Really, I've even seen people on here speak as if the copies of MUA sold with the 360 were "lying in a warehouse unsold," which is just about the dumbest thing I've heard in my life.  Undoubtedly MS said "can we pay you X to make Y copies of your game to sell with our system?" and Activision said "Yes, that is $Z additional profit on a game that paid for itself a year ago.  We'd be happy to help."

have you got any proof to that? i live in europe and there is not one single sony endorsed bundle that i've seen.

Well said. A lot of people seem to be ignoring the multiplatform aspect of this as well, in that most third party games are on both 360 and PS3 so the average cost per system will drop. I like how some of you guys on this site act like you know that developers can't make money developing for the PS3 and they just keep doing it because they are stupid. Wake up, they know what they are doing. Stop making up random numbers to prove your point. That's disgusting.

 Usually?  Whoever said that is insane.  Occasionally.  If you count advertising... I'm sure most of the big name exclusives cost that much...

Multi-plat or just low level exclusives... no way. 

I'd say that's high... no offence to PES but it's not exactly a top notch game... it's not quite the Madden of soccer, but it's the NBA2K of Soccer.

I mean i'm pretty sure they're using the old engine and everything.  Those games are going to be pure profit after next year. (I think they're overhauling the engine for the HD consoles next game, after that however they'll be set for a few years of rolling in cash.)