*cross fingers for Midway to go next*

Hey Acclaim died. It ain't all bad.

Just look at gamestop's quarterly numbers, most of the revenue comes from used games sales, magazines and preorders. Gamestop makes very little money of the new games but used games are pretty much pure profit-10 cents that they give to gamers.

Back to the topic, the number is really not that surprising, I dare for anyone who disagrees to look up all of the games released this  year and see if you have even heard of any of these games before. I am an avid gamer and I got only about 10-20 games and if attach rates are any indication then I am simply batshit insane in terms of purchasing games. And even then I only buy a few % of the total game releases.

I don't beleive that,it seems to low.

Just found some more information on this topic - thought I'd post it.

http://news.cnet.com/8301-13506_3-10106612-17.html


Why most video games aren't profitable

Posted by Don Reisinger

Although video game revenue is at its highest level in history, most researchers believe the industry is "recession-proof," and there are more gamers across the globe than ever before, not everything is so blissful for the video game industry.

According to the Electronic Entertainment Design and Research institute, just 4 percent of games that go into production will turn a profit and only 20 percent of titles that make it to store shelves will achieve profitability.

That shouldn't surprise us. When I look at the video game industry and the countless number of titles that I fire up on my consoles, it's not hard to see why the industry is struggling to develop profitable games: too many titles are the same basic game in a different box with different characters.

How many first-person shooters and sports games need to flop before the industry realizes that although shooters are the highest-grossing titles and sports games perform well thanks to EA, it's time they stop wasting their time with more of the same and start moving towards better titles that offer something unique?

Too many developers get bogged down in the statistics. According to EEDAR in a study it conducted last year examining the industry, mature-rated titles comprise 10 percent of all U.S. retail games and have the highest average gross sales in the country. The action genre is most prevalent and shooter titles have the highest gross sales.

Armed with that knowledge, developers should tell their teams to stop developing games for the Wii and start developing mature-rated first-person shooters, right?

Think again.

During 2007, only two of the top 10 best-selling games of the year--Halo 3 and Call of Duty 4--were first-person shooters. Most of the titles left on the list--Wii Play, Super Mario Galaxy, Guitar Hero III: Legends of Rock, and Pokemon Diamond--span varying genres and offer a relatively unique experience. Combined, those titles sold over 10 million units, compared with just 7.86 million units for the two first-person shooters.

Judging by those figures, it's clear that developers are trying to increase profitability through shooters and action titles, but Nintendo's success with the Wii's unique style of gameplay, as well as the success of unique titles last year, suggests they're wrong in following that strategy. After all, even though the industry is dominated by mature titles, only a select few have performed well.

It's time developers stop looking at statistics and the perceived popularity of first-person shooters and start realizing that as consumers, we crave innovation and fun. We want a compelling storyline and a new battle system that takes aim at current conventions instead of copying them. And more than anything, we want games that provide an enjoyable experience instead of another FPS with another crappy story and the same design.

If developers really want to make games profitable, they can't maintain status quo. First-person shooters are fine if they're unique and created with value in mind, but if they're not, they'll be thrown back into the heap with the vast majority of video games that simply don't make the cut.

Say what you will about gaming, but I don't necessarily think we need more games; I think we need better games.

This was posted earlier and already labeled as inaccurate. The actual percentages were closer to 20%. I don't have the exact quote but it was in the repost of this article from this morning...

The above article makes it seem like 4% of started projects make money, and 20% of games on store shelves make money. That would mean that the 20% that make money and the 4% that make money are the same, and the discrepancy is that a huge chunk of games never get finished. That's how I read it anyway.

Technology increases too rapidly and some gaming companies try to go along with those technology increases which cost lots of money to develop for.

I had fun playing PS2 games, why do I really need to see sweat and blood on a gaming sprite in excellent detail or every little detail. I think consoles should have just increased a little from their past consoles and changed in some way. I would love to have the best graphics, but I would love to have the best story, content, gameplay, etc... mostly the best value. If trying to achieve the best graphics hurts any other area, graphics should suffer first.

Graphics are not needed (had fun with the first gameboy), we need gaming companies that can make their best game without worrying on spending millions on graphics. Companies are just decreasing in the current state.

 Great call Ghost of Rubang!  You are correct.  4% of all started products will be profitable and 20% of those that make it to shore shelves.  Still damn frigging lousy average when 80% of games aren't profitable.  Why are so many unprofitable games getting sequels? 

Here is an update/clarification from EEDAR

http://www.edge-online.com/news/analyst-clarifies-%E2%80%9C4%E2%80%9D-report

Following a widely reported Forbes story on Geoffrey Zatkin’s claims that only 4 percent of videogames make a profit, Edge had contacted analyst group Electronic Entertainment Design and Research for more information on the statement.

A company spokesperson at EEDAR explained,  “What Geoffrey said was that only 20 percent of games that start production will end up with a finished product. And of that percentage of finished games, 20 percent will make a profit.”

This means that Forbes' article by respected journalist Mary-Jane Irwin, illustrates that 4 percent of all games which start production will eventually make a profit. Some secondary reports have assumed the article refers to the percentage of games that reach the market. A far-more-likely 20 percent of finished products will see profitable returns, estimates EEDAR.

Update: EEDAR has issued a press release that attempts to clarify the situation. Here it is...

Unfortunately, there was a miss-quote in the article that a lot of sites noticed and reported on.  Below is the
line from the article.

"Only 4% of games that make it to market actually make a profit, he says. About 60% of a game's budget is spent reworking or redesigning a game. Armed with all this data, companies can make those tough calls early in the development process."

The actual statistic is only 4% of games that enter production will return a significant profit. Of games that are released to the market, only 20% will produce a significant profit. (Source for the second sentence: Secrets of the Game Business by Francois Dominic Laramee).

We understand that miss-communications can happen, especially during phone interviews, but given the inaccuracy of the statistic and how many other sites have picked up on the story, we wanted to ensure that the
major media outlets received the correct statistics on the subject.

Geoffrey Zatkin, EEDAR's President and COO, has provided some clarity on the subject:

"Only 20% of games that begin production will ever finish. Of those 20% that are finished and released to the market, only 20% of them will ever realize a significant profit (Source: Secrets of the Game Business Francois Dominic Laramee).That equals 4% of games that start production return a significant profit.

During the concept and design process of a game, publishers and developers often analyze every feature in a game to ensure proper implementation for a successful release. At EEDAR, we believe that enough historical information is now available to aid publishers and developers during the concept and design process of a game. The EEDAR database, which now consists of over 6 million historical data points, can help remove the burden for publishers and developers from having to justify every feature in their title. Specifically, our DesignMetrics(tm) reports help publishers and developers by identifying early in the development cycle the correct feature combinations most likely to meet consumer expectations. This allows developers to focus more time and resources on creating a high quality and well polished video game."