surprised by that, I mean, the low cost of party games on the wii must easily turn a profit. I mean, they keep making them!

%4? I call BS, lol.

That's not bullshit, it's reality. Unless you understand how the distribution chain takes its' cut of game sales, and do the math on the cost of the games, most games do not ever turn a profit.

4 percent sounds about spot on to me. Last generation, I believe it was about 9 percent. Double the average cost of development in the "HD era", and it's no shock.

Remember when we were told that a typical PS3 game would need to sell 500k just to break even?

Yeah...

Also, let's not forget companies like Ubisoft saying that they are making 360/PS3 games off the profits from Wii and DS.

This shouldn't be a suprise to anybody. Unless of course you forget how many studios and publishers folded last generation.

^If what you're saying is true, then how the hell is the industry still alive and kicking?

Any come to mind?

acclaim, 3do..

God guys, google is your friend. There were probably 100+ studios last generation that folded, or had to sell themselves to other publishers.

Don't any of you remember all the stories about Ubisoft, Activision, and EA buying up entire chunks of the industry?

They did so to purchase cheap I.P.'s, and essentially let go of all of the staffs of said companies.

Do we forget so quickly that Capcom, 2 quarters ago, only posted a profit thanks to the sales they had on Resident Evil 4, Wii, and I forget which DS games?

I'm not sure what the exact number is this generation, but last generation publishers were lucky to make 5 dollars per game sold at retail. The distribution chains eat up their chunks of that 50-60 bucks, and the publishers were left holding 5. (Approximately.)

Look up costs of certain games, do the math, and see how most games never turn a profit. Final Fantasy 7 famously lost tons of cash. (Sony loved how many systems that game moved though, and have protected Square ever since.)

You can find stories on how investors doubt that GTA4 would be able to cover all of the losses for Take2 that their other games have incurred.

I have to say that I'm am saddened that so many people have no idea how bad things are in this business. The big blockbuster games make a profit, sure, but often don't cover losses on all the other games the same publishers put out.

I cant imagine the thriving used game industry is helping profits. Until last year I got all my games used. Last year I had decided new games only give the profits were they belong not to gamestop. I would love to know how much profit they are taking from game developers

http://www.gamespot.com/search.html?tag=search%3Bbutton&qs=studio+closing#story

http://www.gamespot.com/search.html?qs=shut+down#story

http://www.gamespot.com/search.html?qs=studio+dissolved

http://www.gamespot.com/search.html?qs=studio+folds

http://www.computerandvideogames.com/article.php?id=183194

http://www.google.com/search?q=game+studio+closes&sourceid=navclient-ff&ie=UTF-8&rlz=1B3GGGL_enUS282US282


http://kotaku.com/5075080/thq-shuttering-four-to-five-studios-including-paradigm-juice

Hell, just do a search for "Video Game Studio Closing" or "dissolving", "Folding"

"
EA Chicago closing

* By Brendan Sinclair, GameSpot
* Posted Nov 6, 2007 10:22 am PT

Windy City studio the second operation to be shuttered in third-party publisher's round of consolidations, layoffs.

Last week, Electronic Arts CEO John Riccitiello announced in a quarterly earnings conference call that the publisher would be weathering a round of layoffs and studio closures. At the time, the only operation confirmed for closure was the EA Chertsey studio in the UK. Today, GameSpot has obtained an internal EA memo stating that EA Chicago is also being closed.

EA Chicago is best known for its work on the Def Jam and Fight Night franchises. It had been working on a new licensed Marvel fighting game, as well as a second fighting game based on a new intellectual property. The Fight Night series has already been moved to an EA Sports studio, and an EA representative said that announcements would be made regarding EA Chicago's other projects in the future.

The memo, sent by EA Games president Frank Gibeau, states that EA will announce the closure today, and calls it "the toughest decision I've made in my career--one that in no way reflects on the talent and dedication of the people who work there." Gibeau singled out studio general manager Kudo Tsunoda as one of the best creative minds in the industry, and said that many of the affected employees will be offered jobs at other EA locations, with those leaving the company receiving severance and outplacement assistance.

"We're willing to take risks, make long-term investments, and to support teams and individuals between launches," Gibeau said. "But each team is responsible for staying on a reasonable path to profitability. Sticking to that strategy is what gives us the financial resources and flexibility to take risks on new projects.

"Unfortunately, EA Chicago hasn't been able to meet that standard. The location has grown dramatically in the past three years while revenue from the games developed there has not. The number of employees has grown from 49 in 2004 to 146 people currently in the new facility in downtown Chicago. As it stands, EA Chicago has no expectation of hitting our profitability targets until FY2011 or later."

Stories like these are not the exception, they are the norm.

I could find these all day long, but it's after 8:30 am, and I have yet to get any sleep. So I leave the rest to you.

And seriously, I haven't even scratched the surface.