Key Information. (Period 10/01-12/31)

• ~80 games coming out.
• Assumed 1,000,000 sale break even point, we all love assumptions right?
• Therefore 80 Million games must be sold to break even with 91 days or 13 weeks to sell them.
• 96 Million games must be sold to give a 20% ROI for publishers.
• 8 Million HD consoles sold over that period last year along with 55 million games.
• 10.5 Million HD consoles sold since then with another 10million expected to be sold over the next 4 months.
• HD market is increasing in size from 25 Million to 46 Million (>/=84% increase)

BTW I know that games continue to sell after this period, I cut off the tail of the last year for comparison purposes so it does even things out.

I also know that the assumed # of sales required is actually high because theres a mixture of low budget/high budget games. So if you can find it in your heart to believe that HD developers might actually prosper, you can find further solace in the fact that the required number of sales required is actually very conservative.

My Take:

I don't think that come December 31 you'll paddle through the charred remains of a post apocolyptic games industry hearing the echo of your oar strokes bouncing off the lifeless environment as you make your way down the Chocolate river into Wii paradise (Willy Wonka FTW!!) . I can tell you that now without having to crunch any numbers.

The future looks pretty decent actually, I think that they will at least ~ Break even and so long as the number of games releases either remains the same profitability for this section of the industry looks pretty much assured from where im sitting.

So what do you think, is this the time where developers on HD consoles find their feet and their future releasing games for the HD twins? Or is this the final straw which breaks a decadent game industries back and forces it to twist in a more realistic direction?

I think that amount of bold hurts my eyes.... anyway, are you sure about that 1m mark? i though 500k was enough, especially with most of these games using old engines.

Anyway, I think most of them will. I cant see any of the big games really being a failure, and without anything that will sell as well as Halo 3 or CoD 4, there should be a better spread of software sales amongst the games

Nice read. They might start releasing their games in a more staggered manner, instead of dumping them all during the holiday season.

Marketing/Publishing expenses make up a large proportion of the cost to bring a game to market. If a game costs 15 million to make, it could cost another 12 million to market/publish the game worldwide at least. So thats the reason why I used that number.

Btw fixed the bold, sorry I thought it looked cool. xD

Most will break even. But odds are that this holiday season, some company is going to take a big hit, in the form.........of a flop.

A single flop would constituate a big hit. There are what? 5 big publishing companies, this isn't a high risk cottage industry or anything. It would take Left 4 Dead, Dead Space and say Rockband all doing badly for a company like EA to really hurt.

They really should. The usual post-holiday drought is pretty brutal for gamers, and seems like a missed opportunity as far as releasing new games. Though Q1 2009 already seems like it should be more stacked than Q1 2008, barring a whole bunch of delayed games.

@Squilliam: Good post. I found it quite interesting.

The Wii's dominating the market, but I dont know if the HD development community is in any danger, as the thread title implies. Like your analysis suggests, HD gaming's thriving.

That's not to say this thread is pointless and just stating the obvious, though, don't get me wrong. Nice number crunching, nice analysis. Good read.

Thanks, the reason for the title is that it's either said or implied that HD developers are in deep doodoo financially. I just wanted to find a baseline for the HD games to be compared against as they come out.

You have it backwards with your comments about EA, Squilliam. EA are ALREADY really hurting. They're pulling in record revenue and still taking losses. They don't need all those games to bomb to feel the hurt, they need them all to be huge successes to stop feeling the hurt. Though if any one game could float their boat this holiday, it will be Spore.

It's also ironic that you cite the fact that there's only a handful of mega-publishers as evidence of it being a low-risk industry. If it was low-risk, why do you need to be massive conglomorate just to exist?

We'll find out how bad things are not with sales numbers in the last 2 months of the year, but with financial reports early next year. The sales numbers will look fine, I'm sure. COD5, RB2, GHIV, Gears2, Resist.2, etc., will all sell very well, and there could be big break-out hits like A's Creed last year. Of course the HD developers will still be "alive." But if next year, HD-focused companies report record revenues on those huge games, but barely profit even in the holiday quarter, and big mergers keep coming left and right, that isn't a pretty picture.