I thought MS paid a large chunk of the marketing costs? I can't remember where I saw that.

 Well compared to other markets yahh thats a healthy profit, Toyota income is 7.1% (and they are the most profitable car maker in the world)

The car industry works on totally different market dynamics, so comparing the profit margins of a single product is nearly meaningless.

I think with LP, the $20m marketing costs came AFTER then game launched, and started selling. Also, MS recoups some costs with the $7-8 hardware fee for marketing I do believe (in the case of Gears of War, $4 per game went to marketing). Fishy, it's more of compared to the movie industry to see if movie A made money for film studio A. Again, all Capcom cares about is if LP and DR made them a dime. And most likely they did, and are still making them a few bucks a week. Certainly reason to make #2's for both games. Dead Rising was a fantastic game, and was worth every sale it made. Also, fairly strong sales in Europe for both titles. Very good :)

Nice numbers, but this figure is off.

In many countries, there is also a distributor involved. They can typically make about the same money (50%-100%) as a retailer would. There are also freighting & other overheads.

For a $50US (was it a $60 title, or $50?) title, I would expect the publisher to make around $20-$25 per unit (take out manufacturing, freighting, printing, distibution costs - and roll in the price that retailers purchase at, at around $37US).

Marketing might have cost $20m, but development would have been cheaper than that (take into account joint technology development, etc...).

Lost Planet doesn't look like a disaster flop, but I think its less than ideal for Capcom. If they indeed sold 810K to America and have sold-through 663K to date, with only 2-3K additional per week (VGC numbers), that doesn't bode well for them having established a great brand that they can build off of, which is probably one of the reasons they put so much money behind a game with a yet small install base. Dead Rising similarly... I think in both cases, they wanted an American million seller, which they're not going to get. Capcom should continue pursuing the 360 with these types of games, but I don't think they've reached the point of a substantial payoff. Monster Hunter 2, on the other hand, looks to be a substantial brand in Japan now, in fact one of the stronger non-DS brands of the moment, and is probably paying off right now.

I think the 750k number cited was probably the break even point. They didn't start making any money until after they already sold 750k to recoup the costs.

http://www.forbes.com/2006/12/19/ps3-xbox360-costs-tech-cx_rr_game06_1219expensivegames.html A quick breakdown of where the costs go on a game (Gears of War, $10m budget) that sells 1m copies globally. $27 goes to prograrmmers, artists, ect at the stuido (cost of development) $14 to Retailers, Publishers and Distributors $7 to Microsoft $7 to marketing and retailer fees (product placement @ stores) $3 to producing the actual game (packaging, ect) Upto $3 for Voice Acting (doubtful for Gears or Dead Rising, possible for Lost Planet) Therefore, $31 of the $60 goes to everything outside of actual dev costs, or 50%. So whatever a game sells, expect 50% of the purchase price (as a very mean average) to goto the actual maker of the game. So Gears of War has probably (@ 4m units) made Epic around $120,000,000 for the company, minus cost of making the game ($10,000,000) and any other fees with the game not stated.

Well damn. I would guess they probably made about 100 mil on it then, since they had advertising and such. Not to mention all the wonderful things that happened after Gears was released. Like, licensing the engine to a crap load of other developers, a movie being produced, and Gears of War being added to the Professional Gamers League. Not bad at all.

MrStickball, Thanks for the breakdown. So more or less Capcom has the money to put out Street Fighter 4 yes?!