Um well actually what happens is a publisher pays a certain developer a fixed price to make a game. They pay for costs and everything. So they are already in the red for let's say about $20 million. $5 million to the dev and its workers, $10 million for development, and then $5 million for marketing.
Then when the game is finished they ship it to retailers at a fixed price, normally less than retail price cause retailers have to make a profit as well but we won't get into that. So then they sale the game to retailers for about $45 each. Let's say they ship 1 million in their first shipment. So after crossing out the red they end up with $25 million in profits.
Now I know there are definetly other things out there that affect this such as licensing, rating, testing, ect. but that's the gist.











