There are two philosophies in game design western and eastern. The problem of profitability is not that western developers have a bad philosophy. To the contrary it is eastern developers that have not yet embraced the more fiscally responsible practices of their western counterparts.

Western developers prefer to use middle ware and license engines for game development. Which truncates time tables. They also prefer to release fewer titles. Which they usually intend to distribute globally. So the market is leaner with greater profitability due to better production methodology.

Meanwhile Eastern developers still prefer to build their software in house. They also prefer to release larger volumes of games. Then the lack of a global perspective limits potential sales. The result is sloppy and unproductive, and has been sited numerous times as to why eastern developers have serious financial difficulties.

While researching another post I made last year I came across the cumulative game count for the PS2. What was most staggering to me was the disparity. The majority of the titles for the console did not even come to North America or Europe. In fact if memory serves me correctly the gap was a thousand titles. Think about that for a moment. How logical is that from a profitability stand point.

We talk about how cut throat the markets in North America and Europe are, but they probably pale in comparison to Asian markets. Where the game volume is many fold larger. I suspect that the eastern developers probably tilt the statistic drastically. Sure when western developers flop they flop hard, but when they win they win big. So most of the major western developers probably flop less frequently then eastern developers.

You can easily verify this use a game search, and discount eastern developers. Then use a metric of four hundred thousand for the 360. Look at how many games actually reach that threshold. Perhaps the portables are harder, but it doesn't look like the 360 is a nest of vipers for western developers, and if the PS3 gets a port you can probably just add a hundred thousand tally to the development costs. Since the game will not be optimized for the hardware.

I would wager western developers at least the ones developing for the high definition consoles probably have a better batting average. What hurts them is when just one major title totally flops. The loss can be quite large, and thus for a quarter or half a year the developer looks pathetic. However when they hit the mark. They really hit the mark of coarse there is no stigma for success so nobody takes notice.

If this is true, then why do companies waste more money on developing a game than they (if they think realistic and not are living up in the clouds) calculate to get in return. Is it a race to the bottom, where all developers will collectively suicide in the end? It sounds crazy to me.

And how is it with middlewares? I thought they were supposed to lower the cost.

From day one, many companies were in this position and they were profitable because of the massive profits produced from their few successful games ... This (probably) wasn't nearly as bad with the Atari or NES when you spent $250,000 to develop a game, it took 10,000 copies sold to break even, and a big title could still sell several million titiles though.

true, but u forgot 1 game....the mighty LittleBigPlanet!!!!

dats a crazy number, extremely low percentage!
Wow!! didnt expect somethin like dat!