@Naznatipz:

HD consoles would be dead right now with those development costs. Profits are down because there's no prime-PS2-like console out there putting the entire industry on it's back. How can developers possibly afford to put games on the HD consoles with those prices? You *know* it would be impossible to support a console where developments costs are 40-60 million dolars a game. We would never, ever see new IP's. Niche games like Eternal Sonata wouldn't be here right now.

Do you know how many HD games didn't make to 500k? Tons, and with prices like those, developers would have jumped ship a long time ago. The support these HD consoles are getting suggest that developers are, in fact, making money from their games. If they weren't, they wouldn't be support those consoles, right? A game like Virtua Fighter 5 is a good example, as the game has tones of ads and everything. Now, VF5's sales were not exactly great. The game sold a grand totale of 600k. Keep in mind that the game had a price drop fairly early, and it took a long time for Sega to develop the 360 version due to it's online.

By your numbers, we figure the game cost about 45 million dollars to make. 600k isn't anywhere near enough to profit, and I doubt it even breaks even with that price. In fact, Sega would have lost tons and tons of money. As we have seen in the past, developers will jump ship. Don't you think Sega would just forget about the HD consoles all together after such a bomb? Additionally, Sonic Hedgehog could be considered a bomb as well. However, we still see Sega support for both HD consoles. The consoles are even getting another Sonic game. There's no way in hell Sega would still support those consoles if games cost 40-60 million dollars to make. The would just go Wii and DS only.

It would make no sense at all to support HD consoles, because most games do not reach that 500k mark, and even 500k wouldn't be enough to break even. The support the HD consoles get speaks volumes about their development costs. Resident Evil 5 would have already gone Wii only just like Monster Hunter did. Third-parties have historically shown that they're unwilling to support a console with development cost that are too high. Why would they magicly start supporting consoles with 60 million development costs? It's just unrealistic to think that way.

Third-party support would be at an all-time low with those developments costs, yet that's not at all what's happening. We've seen first hand what happens when developers aren't happy with a console--they won't support it.

Sadly among the japanese in Japan, Mistwalker is looked up on as a joke. Especially after the lackluster sales of ASH and Blue Dragon.

They think that Sakaguchi has lost his mind, but well, thats a whole different story.

A few things Riot:

1)Many companies are quickly going out of business this generation, or losing profit. Have you paid any attention to the financials of Midway? Sega? Namco? Their HD games have cost them millions. Have you noticed the fact that most profit reports have flat increases from last generation, despite nearly 50% market growth all around?

2) Sonic Next Gen is considered a gigantic flop. End of story. You'll notice the multiplat (360 and Wii only platforms confirmed) game that was recently announced mimmicks the controls and style of their last success: The Wii game.

3) A lot of developers are making up for high dev costs by developing their games on the PC and porting to the consoles post-production. PC development is far cheaper, and it's basically a free extra platform to sell your games on. The porting is also much easier from PC to PS3 and 360 individually than from 360 to PS3 or vice versa. A few examples of games that have done this include Bioshock, Call of Duty 4, Unreal Tournament 3, and even Devil May Cry 4.

And finally, Mr. Barlog may indeed have been exaggerating, but there are a lot of games with recorded dev costs well upward of $20 million and $30 million. It's certainly not the average. Even Barlog said those were high-end costs. You are acting like those are the default budgets for all games (even crap like Sonic), but it also is proven that budgets that high do exist.

I'm suggesting that LO and BD are somewhere in between those high budgets (30-40 million) and the low budgets (10-15 million) at somewhere around 20-25 million each. Maybe more for one game and less for the other. Again, all we can do is estimate costs, but games with production values like that are most likely not in the low end of 360 dev costs.

I dunno much about the actual cost of those games, but I do knoe that Japanese developers love RPGs because they are so cheap to program. They take a long time because the directors do a lot of scenario planning, scriptwork, etc. at the start and have to work with a lot of art teams to make concept drawings before they can even let their cgi artists at anything. But they only have a handful of people working on that, and they don't have nearly the costs at that time that they would in development. Granted, they can basically rotate these teams' projects and keep both active at the same time, as they certainly have, but for a single project they don't pay hundreds of people to be onboard from start to end.

I mean, really, if they paid cgi animators for three years of work and only got 45 minutes of quality footage out of them, someone made a mistake. Don't you think?

naznatips said: A few things Riot: 1)Many companies are quickly going out of business this generation, or losing profit. Have you paid any attention to the financials of Midway? Sega? Namco? Their HD games have cost them millions. Have you noticed the fact that most profit reports have flat increases from last generation, despite nearly 50% market growth all around? 2) Sonic Next Gen is considered a gigantic flop. End of story. You'll notice the multiplat (360 and Wii only platforms confirmed) game that was recently announced mimmicks the controls and style of their last success: The Wii game. 3) A lot of developers are making up for high dev costs by developing their games on the PC and porting to the consoles post-production. PC development is far cheaper, and it's basically a free extra platform to sell your games on. The porting is also much easier from PC to PS3 and 360 individually than from 360 to PS3 or vice versa. A few examples of games that have done this include Bioshock, Call of Duty 4, Unreal Tournament 3, and even Devil May Cry 4. And finally, Mr. Barlog may indeed have been exaggerating, but there are a lot of games with recorded dev costs well upward of $20 million and $30 million. It's certainly not the average. Even Barlog said those were high-end costs. You are acting like those are the default budgets for all games (even crap like Sonic), but it also is proven that budgets that high do exist. I'm suggesting that LO and BD are somewhere in between those high budgets (30-40 million) and the low budgets (10-15 million) at somewhere around 20-25 million each. Maybe more for one game and less for the other. Again, all we can do is estimate costs, but games with production values like that are most likely not in the low end of 360 dev costs.

Hey Naz, you make some good points... But have you considered that development costs are always highest at the beginning of a console cycle and go down with time? A lot of software houses are developing their own in-house engines, so the initial cost/development time is higher for games that include engines which will be used for future games as well... But as the generation progresses the costs get lower. You have better development tools/libraries and engines to use after a few years.

good for Mistwalker

Naznatips...Too bad you haven't actually provided figures for Blue Dragon or Lost Odyssey...

As far as I've seen, both cost about $40-45m total. Well under your "idea".

naznatips said: Riot Of The Blood said: @Naznatipz: That sounds like BS to me. How in the world is it possible for developers to profit with those costs? I've always believed HD consoles development costs are way overrated. If games really cost that much, do you honestly believe the HD consoles would get ANY support at all? A game like Eternal Sonata would destroy a company with those type of costs. You understand that you're suggesting HD games cost 40-60 million dollars to make, right? Games cost no where near that. Third-party support wouldn't exist with those costs. Well if you haven't noticed actual profits are flat or down slightly this gen for most major companies (not counting Activision and Nintendo) despite higher revenues and a greatly expanded market.  Those companies that have seen a postive increase in profit aren't even close to seeing profit increases at the same rate as the market increase. Wholesale price for a $60 video game is about $35.  Once you take away publishing fees and printing costs the developer only sees about $25 of that.  If Barlog is right, and I would assume he is since his entire job is making these games, then a developer of a big budget game would have to sell 1.6 million copies of a $40 million game to break even.  Obviously the amount of copies necessary to break even goes up as dev costs do.  None of this takes into account advertising either, although on the 360 Microsoft pays for advertisement for all big budget games.  As a side note, dodece is actually correct about one thing.  The fact that Lost Odyssey uses a middleware engine certainly lowers dev costs.  Barlog's estimates most likely are for games like MGS4 and FFXIII in which engines had to be developed from the ground up along with the game, and it's very possible that LO was made for more like $25 million or so, but of course the 3 year development time also has to be taken into account...

Actually according to a Forbes* article about next gen game making (they used Gears of War as an example) a $60 videogame typically sells for $48 wholesale.  They also broke down the various costs for a game which makes it much easier to see who gets what.

Here are some more of their numbers...  $1 shipping per unit and $3 manufacturing costs (very likely $4 in the case of Blue Dragon and Lost Odyssey).  So after taking out shipping and the cost of goods there's $43 million dollars taken in for every million copies sold.

Considering Microsoft paid the advertising budget themselves (read: paid for it through console licensing fees from other games) it means that on the books these games very likely broke even.  Especially considering they obviously would have shipped more than the million sold.

*source:
http://www.forbes.com/2006/12/19/ps3-xbox360-costs-tech-cx_rr_game06_1219expensivegames.html

@Naznatips

You really need to understand the design nature of these titles. Specifically what they do not have to do that other games in other genres are required to do. First the fixed camera angles allow the developer to bypass real virtual world design. These are not full three dimensional environments. Actually they get by in many cases rendering less then half of an environment. The lack of perspective change even allows the environments to behave like two dimensional back grounds the worlds only have implied depth. The battles are actually fought against two background plates. A environment basically cannot get any simpler then this.

There are no complex physics engines at work. Your character can move in the cardinal directions, open boxes, open doors, climb ladders, and push objects. That is simplicity itself. You can't really put it more succinctly these games were not designed around complex physical interactions.

The artificial intelligence would be laughable in any other genre. The enemy moves towards you or merely appears. In the combat arenas they go through a set list of animated moves. Which are recycled between the same battle, and all battles in general.

The games are really simplicity themselves the nature of their design allows them to make due with a lot less development effort then say a Bioshock, Mass Effect, or even a Fable. The difference is in walking around in a city, and walking around in front of a picture of a city. Walking around in front means you don't ever have to build the city or have a real complex interaction with it. That is the best analogy I can give you. I suppose if you cannot understand why a title like Lost Odyssey is comparatively simple when compared to other titles in other genres. Well I am not sure how else I could explain it.

By the way three plus years allows for a year of design and storyboard. While the rest of the time is Freeplus spreading its resources over many different projects its not like the hundred person staff is working on that specific title all the time. Nobody does that except the absolute smallest studios. Everyone else works on multiple titles at the same time. That is how you make games efficiently. You don't have the background artist just sitting there waiting till its his turn in the chain. They have him working on another game at the time. Development at its best is far from a linear process.

mistwalker certainly didn't come out of nowhere