i'm just curious how the money is divided up when a console game is sold.

hypothetically, lets say a 3rd party developer makes a game for the xbox 360 and is published by Electronic Arts. And it's being sold at Bestbuy for $60 ok.


so how much of that $60 goes to the following companies:

1-Electronic Arts
2-The developer
3-Microsoft
4-The retail store (Bestbuy in this case)

am I missing someone? if anyone can shed some light on this that would be great.

Good question, I'm really curious too.

I would assume, though, the developer gets the biggest chunk?

The store just sells it, the console is the media, but most of the work is done by the developer, and possibly the publisher in advertising money.

Just my guess though.

*edit* of course, the game industry could be pulling a music industry and the publisher gets the most and just owns the developers

I'd imagine you're missing the manufacturer and the shipper, and possibly a few smaller moochers. As to precise numbers, I'd love to help you, since it's something I've been quite interested in myself, but the closest I've come to finding out was some pie chart on another site. I'll see if I can dig it up, but don't get your hopes up too much.

@chenguo4: Actually, I'm almost positive that it's the publisher who takes the largest chunk, with the developer getting only a small share or a flat fee. Although that relationship is between the two parties, and can be modified by them freely.

This might help.

http://www.forbes.com/2006/12/19/ps3-xbox360-costs-tech-cx_rr_game06_1219expensivegames.html

Thanks FishyJoe. You just saved me from continuing a frustrating search.

Okay so for a $60 game:

Art/Design: 25% - $15

Retail: 20% - $12

Programming And Engineering: 20% - $12

Console Owner Fee: 11.5% - $7

Marketing: 7% - $4

Market Development Fund: 5% - $3

Manufacturing Costs, Packaging: 5% - $3

Licensing: 5% - $3

Publisher profit: 1.5% - $1

Distributor: 1.5% - $1

Corporate Costs (quantitative analysis, management overhead): 0.3% - about 20 cents

Hardware development costs: 0.05% - less than 3 cents

kool

That article seems wrong to me ...
Since Art work, programming, design, development of games is usually done by the developers...

For a $60 game id estimate:
-- $12 goes to SONY/ Microsoft / Nintendo
-- $18 goes to the retailer
-- $5 for manufacture / transport costs
-- $20 publisher
-- $ 5 developer (publishers will sometimes get this as well due to owning the developer or paying for the product to be made)

That is also an example of why 1st party games can get away with low sales -- since SONY/M$/Nintendo would get the $12 license fee + $20 publisher fee + $5 developer fee... allowing them make a lot more money or minimize costs...

** if anyone finds any flaws in my own assumptions for the break down of games cost please tell me where and what since if you have more accurate info id like to find it ...

A few points, although I'll admit up front that I'm treading on possibly-thin ice. First, Wii games cost less at retail and at development, so none of these figures will apply to those (the art chunk will be especially small by comparison). Second, although those things are done by the developers, I'm fairly positive most publishers will repay the development costs, either upfront or, more likely, on a per-unit basis, which would explain why the article included them.

Alternatively, the article could simply be covering the unit cost up to the break even point, after which the art etc. no longer have to be "paid back" so to speak. After that, the numbers would probably start skewing closer to yours. Again, I'm not sure about any of this, so feel free to correct me, but I doubt Forbes magazine would post such an article without having a solid basis.

Where did you get these number?