Hey guys,

 There are a few web articles and there has been some discussion about the break-even point for new videogames now that development costs are rising so fast, and I'm wondering what you guys think is the "break-even" point for a mid-tier title. This could be something as "high-end" as Overlord/Darkness or something on the the low end like Monster Madness.

 I can't imagine a modern title costing less then a full million to bring to market. If the developer is getting $35 (Out of full $60 MSRP), I assume a lowend title needs to sell at least 30,000~ Copies to be successful?

What do you guys imagine the budget on a game like Blacksite:Area 51 being? A title like that won't sell more then 200,000 Copies

It's really hard to say.

A high budget X360 game is around $20m. That includes most "blockbusters" - Call of Duty 4, Halo3, probably BioShock, Mass Effect, Lost Planet, Dead Rising, ect.

For a mid budget (I doubt Darkness and Overlord are in the high range, and are more likely mid-range), would probably be $10m on the initial platform + 10-20% dev costs to port to PS3, and maybe 5-10% to PC.

A low(er) budget game would probably be in the $5m range.

So using those values, you can assume (with around $40USD going to the dev/publisher):

High End: 500,000 Units + Marketing (which varies)
Mid-End: 250,000 Units + Marketing
Low-End: 125,000 Units.

Likewise, Wii would probably be just around 60% of that per title + marketing. So we'd get, assuming $34.00 per title:

High End : 353,000 Units + Marketing
Mid-End: 176,500 Units + Marketing
Low-End: 88,250 Units + Marketing


Now, of course, on the X360, you have the advantage of making some money off of DLC. Nearly every game has picture packs and theme packs. These can garner a bit of sales. Likewise, some games have expansion backs and add-on areas for $5-10 per unit. 70% of that goes to the pub/dev on the deal. So that lowers costs as well.

Now, for Marketing, that could really vary. Some games might have $250,000 for a marketing budget, whereas major games could have upwards of $5, $10, or more million dollars.

A Lazard analyst estimated that the average 360/PS3 game needed 600K and the average Wii game 300K to break even.

^Desroko
But those were higher end titles.

I would say they're probably mid-high end titles.

But really, it just all depends on who's making it and with what engine.

I'll go back to the great Gears of War vs. Red Steel battle.

Red Steel cost Ubisoft $12 million dollars, using UE 2.5 and PhysX engine.
Gears of War cost Epic $10 million dollars using their own in-house UE3 engine.

Which game was more profitable? In the end, it all comes down to how familiar the dev's are with the gaming engines, and what all they want to add. In this case, the vastly more graphical (and review wise) Gear's was actually cheaper - only due to the fact Epic was already ultra-familiar with their own in-house engine versus Ubisoft using an engine that they were familiar with, but not to the levels of Epic. This meant more dev time = more dev money.

So it really comes down to the Engines, and what they do with it. In the case of many major studios such as Nintendo, Capcom, and Namco, they end up paying more due to making their own engines for their own games. This is in comparison to Western devs that use more in-line engines like Steam, Havok, UE, and such. Even Fallout 3 is using Oblivion's engine to save time and money (think about it, Fallout 3 is being made in 2 years versus Oblivion's 4 years).

Sorry Mrstickball, but I kinda find it hard to believe that midrange titles were that high.  Just a year or so ago (mind you before the PS3 was released)everybody was talking about how the average PS3/X-box 360 game would run 5 million.  Have budgets swelled that much in the last few years?

I'm sure big blockbusters cost 20 million to make, such as Halo 3, Resident Evil 5, GTA 4 and Gran Turismo 5.  But with games like Dead Rising, Lost Planet or Call of Duty 4, I couldn't see them spending any more than 10 million on, even with marketing.

CoD4 is a blockbuster and has I chance of 2nd biggest seller this holiday behind Halo 3.

Wow $5 Million for lowend X360 titles?

Those sales estimates sound about right though 500,000+ for Big Budget, 250,000+ High End, and 125,000+ for Low End.

Although I still think they're have to be some titles that make cash even after marketing with just 100,000 in sales.

I doubt the average game needs 600,000 in sales to be considered a success since those are very solid numbers and vast majority of games won't see even close to that.

CoD4 is a blockbuster and has I chance of 2nd biggest seller this holiday behind Halo 3.

Smash Bros say no :)

costs way more money to create your own engine than to use an existing one, and obviously familiarity with the engine helps too.  The thing is that once the engine is created, the other games you use that engine in will be cheaper.  It's really quite amazing that Gear of War could be made with only $10 million.