"According to Chris Deering, Edinburgh Interactive Festival and former SCEE guy, not even three in ten games recover their costs."

"My guess and analysis shows that less than 3 out of 10 games recover their development and marketing costs with boxed goods sales," said Deering. "So what's going to have to happen? Creative use of hybrid online and offline advertising revenues, online offline transactions with consumers - these business models must be explored."

WOW! All I can say here is WOW. Thats quite the insane figure - it looks like the games industry is seeking to emulate the profit model of the movie industry. Quite the ouch on that one, personally I would perfer that figure be closer to 50%.

Maybe it shows that there are too many development companies in the industry and it needs to tone itself down and shed the underperforming units for the good of those who are performing?

Another LINK

Why do I have this feeling this will turn out into a FFXIII thread.... xD

Thats crazy.

I still cant believe it cost rockstar 100 million to make GTA4

-mod edit (Sqrl) - You don't need to use all caps, exclaimation marks work just as well, thanks =)

Shall we take this guess as gospel?

That's another reason why companies on the Wii are doing better i'd imagine.

HD graphics are a killer costs wise. Though I wonder where he is getting his numbers from.

"Analysis" is vague afterall. Perhaps it's just from their studios and past SCEE knowledge?

I think Nintendo and Sony offset that figure, which would make it even worse.

honestly not all that surpising. just consider how long most people work on games, how many people it takes.... nickel and diming, is one way, as he said

or maybe just maybe they could offer a cheeper add suported one, or a complete collection that offers no ads and all the dime and nikel content for more cost up front.... seems forza 2 is considering this with the survays they have sent out.... more than a colectors edition, but a complete game

Most studio filoms easily recover costs, actually. Ticket and DVD sales ensure that.

Not surprising at all. I actually expected it to be lower but given that 2007 and 2008 have seen huge increases in software sales that probably brought the number up.