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SuperNova on 04 October 2017
elazz said:
SuperNova said:

Looking at price charts over time for the game 40$ seems a fair average for the relevant timeframe around launch.

HDZ  released at 60$ in the beginning of march and then started a slow decline, until  by the beginning of june it hit 40$, where it has pretty constistently stayed ever since.

HDZ sold 2.6 including digital within it's first two weeks on the market, at a 60$-55$ dollar pricepoint. On average, with sales being tilted towards launch that probably works out to a 58$+ average for those first two weeks.

As of April 30th when we arrive at the 40$ pricepoint it had sold over 3.4 million. So thats a 55$ - 40$ decline over the following six weeks in wich 800k units of the game were sold. We will take a perfect average here, ignoring that the digital price probably didn't deteriorate as fast and the game stayed at 60$ digital for longer, so 50$ average for the following six weeks of sales.

The retailer cut is 10$ - 15$ as previously stated, so lets assume 15$ for the purposes of this calculation. Shipping, manufacturing and packaging can be comfortably estimated at 5$ per unit.

58$ - 15$ retailer cut - 5$ packaging, shipping an manufacturing = 38$ before licensing fees are deducted those are 30%, or 11,40$ in this case.

38$ - 11,40$ = 26,60$ This is the publisher cut in the first two weeks.

26,60$ x 2.6M = 69.160000

Same considerations for the following six weeks with 800k of sales:

30$ - 9$ = 21$

21$ x 800k  = 16,8M

Publisher cut before sales price in store hits 40$ is: 85.96M. Pretty damn close to what was assumed in OP.

In HDZ case it has seen a steady sales price of 40$ since, so on every sale from may going forward they make 14$ (this is after licensing fees). At that rate it would take them 1M additional copies sold LT to reach pure profit. Something that HDZ is likely to achieve with it's first holyday.

You are forgetting one thing here. Sony is the publisher so there is no publisher cut. They developed and published the game. Sony owns Guerilla so they are funding development and marketing. 

So the actual calculation is as following: total amount - retail - distribution

So out of 60 dollars average price (not taking into account other currencies) we have about 2.5m retail copies at that price (60-15-5) = 100m and then an average of 900K digital at 60 dollars = 54m which brings us a total of 154m revenue for Sony on Horizon. Then we have probably another million at an average price of 30 dollars and taking into account special and collector's it's safe to say the revenue for the game by now is hitting 200m almost --> with that development is paid, marketing is paid and also other costs looking into worldwide studios, sony corp etc. but it already made a good profit and will do so till the end of the year. 

Selling 5m copies within a year is succesful for most AAA games. Then you have those from EA, Activision, Rockstar etc. that need to do 10m 

But then you have the AAA league that needs smaller sales since the budgets were smaller. Like 1 up to 2 million

You're right of course, only I did not forget that, but deliberately ignored it, because we happen to have quite detailed numbers for HDZ, but not for others. HDZ already made sony their money back and then some, but I was trying to give an example that would also fit for a third party publisher, so I included the licensing fees in the calculation. My point was to show that 40$ for the first 3M is not an unfair average, for a game wih similar quality and marketing budget.

Also, yes HDZ is quite successfull of course, but even less successfull games with a similar kind of development and marketing budget will make their money back with gamesales alone as long as they break 3M+ LT, wich is not that unusal. Shadow of Mordor for example, whose sequel is hotly debated in the Lootbox, microtransaction, DLC in 60$ games mess sold 5.9M ww across all platforms.



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caffeinade on 04 October 2017
SuperNova said:
elazz said:

You are forgetting one thing here. Sony is the publisher so there is no publisher cut. They developed and published the game. Sony owns Guerilla so they are funding development and marketing. 

So the actual calculation is as following: total amount - retail - distribution

So out of 60 dollars average price (not taking into account other currencies) we have about 2.5m retail copies at that price (60-15-5) = 100m and then an average of 900K digital at 60 dollars = 54m which brings us a total of 154m revenue for Sony on Horizon. Then we have probably another million at an average price of 30 dollars and taking into account special and collector's it's safe to say the revenue for the game by now is hitting 200m almost --> with that development is paid, marketing is paid and also other costs looking into worldwide studios, sony corp etc. but it already made a good profit and will do so till the end of the year. 

Selling 5m copies within a year is succesful for most AAA games. Then you have those from EA, Activision, Rockstar etc. that need to do 10m 

But then you have the AAA league that needs smaller sales since the budgets were smaller. Like 1 up to 2 million

You're right of course, only I did not forget that, but deliberately ignored it, because we happen to have quite detailed numbers for HDZ, but not for others. HDZ already made sony their money back and then some, but I was trying to give an example that would also fit for a third party publisher, so I included the licensing fees in the calculation. My point was to show that 40$ for the first 3M is not an unfair average, for a game wih similar quality and marketing budget.

Also, yes HDZ is quite successfull of course, but even less successfull games with a similar kind of development and marketing budget will make their money back with gamesales alone as long as they break 3M+ LT, wich is not that unusal. Shadow of Mordor for example, whose sequel is hotly debated in the Lootbox, microtransaction, DLC in 60$ games mess sold 5.9M ww across all platforms.

Shadow of Mordor:
PS4 3.08
Middle-Earth: Shadow of Mordor

XOne 1.38
Middle-Earth: Shadow of Mordor

PS3 0.57
Middle-Earth: Shadow of Mordor

X360 0.49
Middle-Earth: Shadow of Mordor

Steam 3.68 (as of the 5th of July 2017, the data is unreliable after that point)
http://steamspy.com/app/241930

The game sold over 9.2 million on all platforms.



SuperNova on 04 October 2017
caffeinade said:
SuperNova said:

Also, yes HDZ is quite successfull of course, but even less successfull games with a similar kind of development and marketing budget will make their money back with gamesales alone as long as they break 3M+ LT, wich is not that unusal. Shadow of Mordor for example, whose sequel is hotly debated in the Lootbox, microtransaction, DLC in 60$ games mess sold 5.9M ww across all platforms.

Shadow of Mordor:
PS4 3.08
Middle-Earth: Shadow of Mordor

XOne 1.38
Middle-Earth: Shadow of Mordor

PS3 0.57
Middle-Earth: Shadow of Mordor

X360 0.49
Middle-Earth: Shadow of Mordor

Steam 3.68 (as of the 5th of July 2017, the data is unreliable after that point)
http://steamspy.com/app/241930

The game sold over 9.2 million on all platforms.

I went by VGC numbers :P

I also did some calculations on the digital ratio and barring me making any glaring mistakes my results show that a game akin to HDZ budget and success but by a third party publisher would have made it's money back within the first two months. Sony probably made the entire budget back within the first month but I'm really too lazy to calculate any further.

I used VGC to determine digital ratios for two weeks and eight weeks of sales at 15,4% and 20,2% respectively, tendency growing and factored in the decline of retail price, retailer cut, shipping, manufactoring and packaging as well as 30% licensing fees for retail and no price decline and only 30% licensing fees for digital.

retail:       58,5M + 10,8 = 69M
digital:     16,9M + 12M = 29M
overall:    69M + 29M = 98M

Major publishers have no excuse for their nickel and diming other than: 'We want more money.'



caffeinade on 04 October 2017
SuperNova said:
caffeinade said:

Shadow of Mordor:
PS4 3.08
Middle-Earth: Shadow of Mordor

XOne 1.38
Middle-Earth: Shadow of Mordor

PS3 0.57
Middle-Earth: Shadow of Mordor

X360 0.49
Middle-Earth: Shadow of Mordor

Steam 3.68 (as of the 5th of July 2017, the data is unreliable after that point)
http://steamspy.com/app/241930

The game sold over 9.2 million on all platforms.

I went by VGC numbers :P

I also did some calculations on the digital ratio and barring me making any glaring mistakes my results show that a game akin to HDZ budget and success but by a third party publisher would have made it's money back within the first two months. Sony probably made the entire budget back within the first month but I'm really too lazy to calculate any further.

I used VGC to determine digital ratios for two weeks and eight weeks of sales at 15,4% and 20,2% respectively, tendency growing and factored in the decline of retail price, retailer cut, shipping, manufactoring and packaging as well as 30% licensing fees for retail and no price decline and only 30% licensing fees for digital.

retail:       58,5M + 10,8 = 69M
digital:     16,9M + 12M = 29M
overall:    69M + 29M = 98M

Major publishers have no excuse for their nickel and diming other than: 'We want more money.'

It was quite shocking to see that Shadow of Mordor had sold more on PC than the PS4 (though I guess Steam sales help a lot).


I predict that within 10 years photogrametry and machine learning will replace the average artist.
Wih the rest of the artists working with very powerful engines to snap together levels / worlds in no time at all.

QA testers will probably be replaced AI controlled players, at least the games will be well balanced.
The developers should be able to find most of the bugs before launch, maybe they able to fix them too.

I have a feeling that next generation we will see a significant drop in the fantasy settings.
With developers instead opting to go with games that are set in real life in some fashion.
Using photoscaned, machine learning optimised meshes for in game objects.
I guess it will be cool to see Ubisoft's drone squadron flood cities to help them produce their next

In short, I don't think that the next generation of games will be much more expensive to make, hell they may even be cheaper to produce.
If I am right (possible) there will be even less of a reason for publishers to cram lootboxes and co. into games.

Also nice numbers.



DonFerrari on 04 October 2017

Well if that game can generate assets, engine and all else selling that game at moderate loss and allowing it to be recycled couple times for very small investiment can give money.



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."

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VAMatt on 04 October 2017

I think loot boxes, in theory, are good for gaming. The vast majority of them don't even approach pay to win. I have no problem with a game selling cosmetic stuff. I don't even really mind games that sell very small Buffs that speed progress, such as 10% additional experience points for 4 hours, or stuff like that. The reality is, these companies exist to make money. Loot boxes are completely voluntary, especially when they're just cosmetics. I'd much rather them make money in that way, rather than Force us to pay $20 more to purchase their game. I can't see why anybody would think differently about this.

Of course, pay to win Loot boxes are a different issue entirely. They are completely unacceptable, in a game that comes with any initial cost. They're fine for free-to-play titles, though I tend not to play that kind of game.



VAMatt on 04 October 2017
Mar1217 said:
VAMatt said:
I think loot boxes, in theory, are good for gaming. The vast majority of them don't even approach pay to win. I have no problem with a game selling cosmetic stuff. I don't even really mind games that sell very small Buffs that speed progress, such as 10% additional experience points for 4 hours, or stuff like that. The reality is, these companies exist to make money. Loot boxes are completely voluntary, especially when they're just cosmetics. I'd much rather them make money in that way, rather than Force us to pay $20 more to purchase their game. I can't see why anybody would think differently about this.

Of course, pay to win Loot boxes are a different issue entirely. They are completely unacceptable, in a game that comes with any initial cost. They're fine for free-to-play titles, though I tend not to play that kind of game.

Good, you just contradicted yourself -_-

I don't think so.  But, I see what you're saying.  

What I mean is, if a game is perfectly playable and fair without any loot-box buffs, and is single player only, then I don't mind very minor perks that affect gameplay in tiny ways.  The definitions of perfectly playable and tiny are certainly subjective.  But, I have a line that I use to judge these things.  And, 10% XP boost for a little while is not over that line in most cases.   Paying directly for a level-up probably is. 

To be clear, I don't care for loot boxes personally.  But, I see the roll they play in gaming, and I don't have a problem with it, generally speaking.   



think-man on 04 October 2017

I know in Digital sales publishers make a bigger profit. I'd be all for an increase in game price, even if it's just $5.



 

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