It's definitely not going to break even at just 2m copies sold. The same person who says they heard it has 1.5m sales also said it needs to sell 4.5-5m to break even on it's $100m budget. 

Once you take into account manufacturing, transport and crucially the retailers cut Nintendo will make far less than $51 profit from each physical copy sold.

It's also already receiving big discounts, Amazon UK is currently selling it for only £31.

The industry wouldn't be in anywhere near as much trouble if 2m sales would cover a $100m budget.

2m honestly shouldn't be a doubt in anyone's head.

was No.7 in December US all platform sales without digital included. That to me alludes to almost 1m in the US. That's great. People are really panicking because it's not selling like bigger Nintendo IP but it was never going to do that.

I don't think people get how hard it is to be a multimillion seller on a 6month old, sub <20m audience in less than a month lol.

Even though S2 is selling great I really doubt the entire core audience has all jumped on board when there's been a lack of compelling exclusives. If Metroid see's growth it's also going to be reflected in legs. Gotta wait to see how things pan out.

Remember, prime 4 is on Switch 1 as well. It has a huge audience to sell to. Far bigger than Dread had.

Yes but people are choosing to get it disproportionately for for S2. No.16 this week in the UK charts and 80% for Switch 2 (worth noting it also jumped up in position from 29)... So Switch 2 is central to its success and future audience. I haven't bought the game yet but I wouldn't get it for S1 if I know I'm getting a S2 soon

Also inactive end of life audience <<< active peak sales audience. And dread released during the Switches peak with hardware bundles.

I strongly doubt it needs 4.5-5 million to break even. The $51 per copy estimate was already accounting for retail, manufacturing and transportation cuts.

For first party titles Nintendo gets like 80% of the revenue from the sale. For digital it is closer to 100%. Assuming first three weeks sold mostly at $70 and $60 respectively. That would be about $56 per SW2 physical copy and $48 per SW1 physical copy, assuming Nintendo gets 80% of the revenue. But of course a significant share of the sales are digital, where they get near 100%.

Third party games need to sell a lot more to meet a budget because the platform holder takes like a 30% of the revenue. But in this case Nintendo is also the platform holder. 

They also tend to sell for a lower average price than Nintendo games.

Also many games that break even are still disappointments and don't get sequels because publishers don't want to just break even, they want to make profits, so 2 million sales would be a disappointment for many $100 million budget games even if there is no loss. In Metroid's case it is a complementary good (diversity library and IPs, sell SW2's, etc) so Nintendo might be fine with breaking even.

You're heavily overestimating the profit they get for each physical copy sold.

Retailers also typically take a 30% cut from physical games. So that takes a $70/$60 game down to $49/$42 even before taking into account the manufacturing and logistics costs. IGN Article.

4.5m-5m to break even may be too high, not sure how reliable he is, another tweet recently he put the budget at $100-$200 Million saying he didn't know exactly where in that range it was lol.

Though that would make the 1.5m copies sold posted in another thread also unreliable.

He did an interview with the Metroid Prime 2 producer about recouping dev costs which he's basing some of this on.

I would take all of those numbers with a massive pinch of salt.

Especially with budget estimation, notice how they always land perfectly on a nice round/number like 100m lol. I suspect it needs to sell north of 2m but I wouldn't estimate break even at 4.5-5m.

Lots of different guesses out there but apparently Ghost of Yotei broke even at 1.6m

"Ghost of Yotei has sold 1.6M+ copies through to consumers (2M+ when we include sell-in to retailers), translating into nearly $100 million in revenue"... Haven't dissected the numbers as I'm not that invested but I doubt Metroid needs 5m.
https://alineaanalytics.substack.com/p/ghost-of-yotei-is-a-success-as-battlefield

None the less a game like this (One that restarted development with a new developer), shouldn't be judged through the same success metrics. Nintendo know they would be able to develop a sequel at near or less half of the cost with the foundations in place and without the mistake of handing it to Bandai Namco (same happened with FFVII Remake lmao). But again I'm not putting too much weight in the 100m number to begin with.

Side note but crazy props to Sucker Punch for delivering a true AAA experience in around a 60m budget (that number comes from them directly)

Usually the sheet-price (what the publisher sells a game to the retailer) is like $10-12 below MSRP on a $60 AAA game that is expected to sell well. It's not a fixed percentage. It depends on how well the publisher thinks the game will sell and for how much it will sell, etc. A retailer initially buying a $60 MSRP AAA game for $48-$50 is typical from what I've read on this topic. Add on the logistics (ship to retailer) and manufacturing costs for another $5-15. For a $60 game that sheet price would be 16-20% of the total sale. Then the manufacturing and logistic costs would be another 10%-25%. So you're looking at 26-45% of the sale being consumed by physical costs. That roughly matches IGN's estimate, which makes me think they're not reporting what the retailer nets in profit (MSRP - sheet price), but rather what it costs overall to the publisher here. 

For Nintendo though, you're probably right that I was being conservative on costs because the storage they use for physical releases is expensive. If a retailer buys Metroid Prime 4 for $48 (Switch 1) or $58 (Switch 2), and shipping + manufacturing costs are something like $10 for Switch 1 and $15 for Switch 2, then it probably is indeed closer to about 60-65% of the sale going to Nintendo rather than 80%.  

This makes sense when you consider that many AAA third party publishers have said they get approximately 50% of the games sale revenue in the end; sometimes more and sometimes less, and platform holders also charge something like a 10-15% licensing fee on physical sales for third party developers, which Nintendo obviously wouldn't pay. 

But even then, $38 per Switch 1 game, and $43 per Switch 2 physical game still is a decent profit. If Prime 4 only sold 1.01 Million copies, and they all sold on Switch 1, and they all were physical that would be about $38 million. But obviously not all copies are Switch 1 copies, not all copies are physical, and there is no reason to believe it only sold 1.01 Million copies in the first three weeks rather than much more. Given digital sales, a profit in the upper $40's or even lower $50's depending on the physical : digital ratio for the average copy isn't unrealistic or farfetched. 

Even the current discounts are relatively anemic compared to what you see with other publishers, who heavily discount their games. Metroid Prime 4 is still MSRP here in North America, the game's largest region. That's not typical for AAA releases.  

Edit: Interesting answer on Quora about this topic. 

Just did a quick calculation: 

If we estimated $35 profit for Nintendo per physical copy (50-60% of MSRP; depending on platform) and we assume for every SW1 game sold SW2 sold two copies. And we assume the same digital:physical ratio on both platforms. All of these assumptions seem reasonable. 

x1 = SW1 sales = 670,000; x2 = SW2 sale = 1,300,000

Profit SW1 = 60*digital sales ratio  + 35*(1- digital sales ratio) 

Profit SW2 = 70*digital sales ratio + 35*(1- digital sales ratio) 

Total Profit = x1* Profit SW1 + x2 * Profit SW2 = 670,000*(60*dsr + 35*(1 - dsr)) + 1,300,000*(70*dsr + 35*(1-dsr))

If total cost = $100,000,000 

$100,000,000 = 670,000*(60*dsr + 35*(1 - dsr)) + 1,300,000*(70*dsr + 35*(1-dsr))

solve for dsr we get,  .498 or 49.8% to break even. 

If the ratio were 1:2 (33% of copies sold are digital) then we get only $90,000,000 in revenue, and would have to sell 2.2 million copies to break even. 

4.5 million copies to break even, with this ratio, would imply a budget of $200,000,000. 

What is the typical digital : physical ratio for Nintendo consoles?