For the developper profits is all that matters, if u measure a game on its expectations then the opinion on which games are succesful will vary as different people have different expectations.

If you do look at expectations then look at the companies own expectations, if they sell out its because they sold more then they expected to need, and when there is too many copies in stores that they need to reduce the price its that they made too many and thus didnt sell as expected.

Although ill say profit is all that matters, its not only profit for the games sales that matters, its also wether you develop franchise value. Certain games create hidden value in that the franchise becomes popular and will build futur sales of sequels, spin offs etc of that franchise.

I would say it if becomes a million seller in a relatively short amount of time then it is a success.

To be considered a success a game has to make money. If it doesn't make money it isn't a success. It's as simple as that and that magic money varies for every game.

For a modest budget game last gen that took about 500k-ish copies. I have the breakdown of prices written down somewhere, if I remember I'll look for them later. If anything it gives a good idea of what percentage of the budget goes where.

depends how much money they put in the game for development and Marketing, A big hit game would have to sell I think around a half a million to make a profit, some games where they don't spent a lot of money could easily make a profit when they sell like 40k or lower.

Economically speaking, any product must sell enough to cover at least the explicit (easily traceable) costs of producing it to be considered profitable (and thus marignally successful). As such, you should gauge how successful a game is not by a set value, but by a simple formula:

Profit = revenue from sales - explicit costs

Let's take a hypothetical situation of a game that costs $12,000,000 in explicit costs to produce, advertise, and publish (as well as all other explicit costs). If $40 profit is made per sale (split between publisher and development studio), we can divide 12,000,000 by that to get the break-even point (300,000 sales). Thus we can say that a title which costs $12,000,000 in explicit costs that gains $40 in profit per sale must exceed 300,000 sales to have been marginally successful.

For a title to be truly successful, implicit costs (what you sacrifice to make the product) must also be exceeded. Let's say the $12,000,000 title above has an overall implicit cost of $4,000,000, added onto the explicit costs to give a total of $16,000,000 to release the game. In that case, 400,000 units would have to be sold to cover both types of costs, and over 400,000 units sold would be true success.

Found my notes.  First off, we have to assume that successful games are generally extremely polished and HQ.  For this, we're making a modest game with a modest budget with a modest team.

• People
  
  • 20 people x $50k/year (our AVG) x 1.5 years (extremely conservative) = $1.5 million on salary
•  Equipment
  
  • 20 x $15k (consoledev kit, PC, ect) = about $0.3 million
• Overhead
  • salary * 50% = $0.75 million

So that's about $2.5 million for a modest game with a modest team, but do remember we're cutting corners everywhere here.  Now for the next part.

• Cost of goods (remember, these are special CD's and DVD's)
  
  • CD's: $1.00
  •  DVD's: $2-4
  • Game Disk$12-15
  • 200,000 (copies) SKU x $15 = $3million
• Marketing
  • $0.5million
  • typically $2-10 million
  • MDF (marketing development funds) 6% of the wholesale price

So that's about $7million to make a game while cutting every corner possible.  Knowing what I said above about successful games are exremely polished and HQ, this game likely isn't but lets go on and pretend it is.

Assume our game is being sold at a $40 price point and we make $15 on every game, we would have to sell 470,000 copies to break even.

Assume our game is being sold at a $50 price point and we make a $25 profit on every game, we would have to sell 280,000 to break even.

So yeah, that's a very modest example, but it's a good place to start when trying to figure out why games are so expensive and why some things are priced the way they are. 

So would about 300,000 copies of a Dragonball Z or Naruto game be considered "successful"? I'm doing a paper on anime-based games and that's where it seems a lot of the sales marks seem to be. It's either around .1, .3 or rarely .5 million copies for these games, and I'm wondering how that stacks up on the "success" scale....

//EDIT//: By the way, I'm looking only at North American numbers for this.

Thanks.

Thanks for the info Twesterm! Any idea what kind of difference there would be between Wii and PS3 and 360 games? 

Also, if the Wii is much less espensive to develop for, why do 3rd parties avoid it like the plague?

Also, would it be cheaper to make a game with cut corners on a PS3/360 than to make a top-end Wii game?

From what I've seen profit is not enough for some publishers. A successful new IP or existing franchise must bring in enough revenue to warrant a sequel. The purpose of any IP is to create a franchise which one may exploit and fall back for years to come.

That is perhaps the reason why EA went with the new IP strategy for awhile now since most of their past franchises are practically irrelevant now.

3rd parties I believe avoid the Wii for a variety of reasons.

• Some are only really focused on titles that Wii technically isn't best suited for, particularly the PC developers no on console like Epic, Infinity Ward, etc.  There focus is big budget AAA FPS and the like and the Wii clearly doesn't appeal for them (although of course they're happy for other developers to be signed up to create Wii versions as we've seen with CoD4, etc).
• Some clearly worry that only Nintendo titles sell well on Wii and don't want to compete with Mario, Zelda, etc.
• Others clearly see the genre of the game as not selling well on Wii vs say 360 or PS3

The short answer is just because it's cheaper to develop for doesn't automatically mean it's the better option.  Spending $5 Million to put a game on Wii that underperforms and only breaks even or makes a loss is a bad decision next to spending $10 Million to put a game on 360/PS3 and make a modest profit.

Personally, because I have a Wii, I'd like to see more 3rd party titles on it, but I can understand the valid reasons why some avoid it.  Others of course, such as Ubi with their Raving Rabbit stuff, seem to have embraced the Wii pretty well.

What will be interesting is if the Wand/Natal take of reasonably well it could open up an easier option for developers to put a modest, motion control orientated game on all 3 platforms, which would make the market very interesting IMHO.

Oh, and thanks for those numbers Twest - very interesting.

I'd guess looking at other examples in the marketplace such as Uncharted 2, that a modest 360/PS3 game is going to be minimum $ 10 million in cost to be reasonably polished, with bigger titles in the $15 to $20 million range and of course the big boys potentially way north of that - Uncharted 2 for example had a development budget of $20 million so total cost could easily be in the $30 to $40 million mark.

Assuming 2M unit sales at average price WW of $45 you have revenue of $90 million.  I'd guess Uncharted 2 would be unlucky not to finish with at least 2.5 M units so it should generate over $100 M in revenue easy - the big question then is how the $60 to $70 million left from an assumed cost of $30 to $40 million is split for a title like that?