Ail said: Squilliam said:
dib8rman said: Either way their going to make money, but let's see in 2009, my guess is while everyone is making 1 million in PS360 everyone is making 3 million on Wii (profit difference not revenue.) For the relative software and relative business strategy.
ie. A failed game on the PS360 will profit 3x less than a failed game within the same region on the Wii, that's my *guess*, and by profit I mean towards publisher.
I'm going to go as far as to say Nintendo's 2009 annual report is going to have about 4 billion dollars in profit, roughly 1.5 billion of it strait from Wii's being sold... (Ok maybe I did run some numbers there, but not nearly enough to not make it speculation at best.)
The only good thing to come out of this, is that new publishers and developement houses could be on the rise, maybe some of them would rival EA eventually. |
On average a third party Wins bigger on the HD consoles and they lose bigger too. I would guess that the Wii is a safer bet with higher average returns, but you're less likely to win the jackpot developing for it. |
I'm not sure it's a safer bet. If you look at HD console games sales this gen, there have been very few failures and even games with poor review have been doing somewhat well ( Heavenly Sword at 1million+, Haze doing over 200k in first week). So far it really seems like if you are a well known developer, spend a decent amount of cash in development and marketing you are likely to deliver something successfull on the HD consoles. On the Wii things haven't been as clear cut and some well reviewed titles have failed to sell as expected.... PS : And as someone pointed out the price of Wii games being lower probably means developer gets less cash per Wii game sold than per PS360 game sold... |
There's a couple of places where I believe you went astray in this post. For starters, there have been more than enough failures to go around on the HD consoles. Rather than name names, I'll simply direct you to the sales page on this site.
http://vgchartz.com/games/index.php?page=1&name=&console=X360&keyword=&publisher=&genre=&order=Sales&picture=
http://vgchartz.com/games/index.php?name=&console=PS3&developer=&publisher=&genre=&keyword=&order=Sales
You'll notice that the 360 does have quite a few games that have done very well for themselves. You'll also notice that there are entire pages full of games whose sales have, to put it mildly, tanked. That trend is even more pronounced with the PS3, where there's a definite divide between the "haves" and the "have-nots." To put things in perspective, Mario & Sonic at the Olympic Games has outsold every single game on the PS3 roster, including Grand Theft Auto IV. In fact, on a comparative basis, Wii games are handily outselling their PS3 counterparts.
But perhaps you'd like to point out, as you did in a previous thread, that many third parties are doing better on the 360 at the moment sales-wise than they are on the Wii. Let us leave aside the indisputable fact that third parties have hitherto put their best teams and highest resources on the AAA HD console games, since the Wii's success caught most developers with their pants down. Instead, let us examine how third parties are faring in the one area that matters most, i.e. profits.
It's no secret that the cost of doing business on the HD consoles dwarfs that of making games for the Wii, with development costs often being about three times higher for the 360 or PS3 than they are for the Wii, with some third parties having to spend as little as one-sixth on the Wii as they do for the HD consoles.
http://www.gamasutra.com/php-bin/news_index.php?story=18389
http://www.gamespot.com/news/6149154.html
http://www.gamedaily.com/articles/features/cost-of-development-greatly-favors-wii-say-publishers/69714/?biz=1
http://www.gamasutra.com/php-bin/news_index.php?story=18247
It is indisputably true from a revenue standpoint that "the price of Wii games being lower probably means developer gets less cash per Wii game sold than per PS360 game sold...", as you put it. However, you're sacrificing one-sixth of the revenue by developing for the Wii, while only paying a third or less in development costs. Simple math tells me that I'm going to be making a profit much sooner on the Wii than I would on HD costs.
But I've been speaking in generalities and hypotheticals up to this point. Allow me to give you some concrete counter-examples to your claim.
http://investor.ea.com/phoenix.zhtml?c=88189&p=irol-newsArticle&ID=1145021&highlight
Here is EA's annual financial report. You'll notice that last year, EA posted a loss, despite being the second-largest third party in the world. This is in spite of the fact that EA's revenue was over a billion dollars; indeed, their revenue was almost 25% higher than they expected at the beginning of the year. And yet, they still lost money. The reason for that is simple: development costs are rising as third parties shift away from the last-generation consoles towrads the HD consoles. And they know this.
http://www.gamespot.com/news/6175764.html
"[This transition has been] harder because of the complexity," {EA CEO} Riccitiello said, "and harder because unfortunately, we bet a little bit on the wrong horse in focusing so much on the PS3 and Xbox 360, and to a lesser degree on the Wii. And let me assure you that almost all of us in the industry made the same judgment. So after so many transitions of guessing exactly right, we got this one a little bit wrong and we're dealing with that now with strong investments on the Wii."
And EA isn't the only company that feels this way. To give you another example, long-time Nintendo rival Sega initially bet on the HD consoles, but it's seen the bulk of its successes nad profits on the Wii, so it is now shifting its resources.
http://www.forbes.com/afxnewslimited/feeds/afx/2008/05/13/afx5000811.html
"As rebuilding our consumer video game business is crucial, we now need to review our game title strategy more flexibly to adapt ourselves to changes in the trend of the market,' Ueda said, referring to Sega's release of more game titles than competitors to the PS3, which lagged sharply behind Nintendo Co's Wii in terms of sales."
Indeed, those high HD development costs are literally shutting down the small and mid-sized developers.
http://www.gamespot.com/news/6189861.html?sid=6189861
"Since January, a host of development studios have closed their doors, suspended operations, or otherwise stopped making games...During that same period of time, the industry has racked up phenomenal sales. NPD's retail software-sales data for the US has been up by double-digit percentages for each of the first three months of the year, with growth of 47 percent and 63 percent in February and March, respectively."
http://next-gen.biz/index.php?option=com_content&task=view&id=9003&Itemid=2
"{Asked why so many companies were merging, squeezing out the smaller developers} Don't blame consolidation. Blame Sony and Microsoft for jumping the budgets up to $30 million for a console game. That's not consolidation's fault," Lasky said.
But none of that would matter if the Wii wasn't profitable for developers either. But it is. See the examples I posted above, and then add these:
http://www.gamasutra.com/php-bin/news_index.php?story=18144
"Officials from Japanese developer Hudson Soft have spoken of plans to increase the company’s profits by almost 400 percent within three years, by focusing on titles for the Wii...Hudson will release eight titles for the Wii in 2008, to add to a current tally of ten titles for the format. The move comes after operating profits rose 53 percent to ¥2.7 billion ($26m), well above Hudson’s forecast of ¥2 billion ($19m). This was attributed primarily to stronger than expected sales on the Wii and Nintendo DS."
http://ir.majescoentertainment.com/secfiling.cfm?filingID=950136-08-144
"Gross margin was 31.2 percent, compared to 19.8 percent in 2006, reflecting the higher margins attributable to Wii games and Cooking Mama (DS and Wii)."
http://ir.capcom.co.jp/english/data/pdf/2008result_02/e080520.pdf
"In this business segment, "Resident Evil 4 Wii edition" and "Resident Evil: The Umbrella Chronicles" (for
Wii) increased their brand recognition especially in overseas markets. Their shipment surpassed one million
units, greatly exceeding our projection "
In fact, I can't think of any examples off the top of my head of a developer who's been disappointed with the Wii so far, with the possible exception of Ubisoft. Even the poster-children of thir-party failures, No More Heroes and ZXak and Wiki, have exceeded their creators' expectations...
So it would appear that many in the industry feel the opposite of what you do: the Wii is more profitable for most developers, and the HD consoles appear to be killing them off. At the moment, it appears that Squillam is the most accurate person in this thread: the HD consoles can let you win big if you bet the house and emerge victorious, but the problem is, you have to bet the house, and far too many developers appear to be losing.
Edit: I will learn how to type more than ten words per minute. I will learn how to type more than ten words per minute. I will learn how to type more than ten words per minute. I will learn how to type more than ten words per minute...