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Forums - Sales - On The Verge of A Gaming Crash? Without Nintendo....

mrstickball said:
Gamerace said:

Can't find it now.  Did find this:

As for this latest realigning, money talks (innovation walks) and you have to assume someone simply woke up and smelled the honey pot. According to chairman and CEO of Foundation 9 Entertaiment Jon Goldman, "Publishers are saying: Instead of spending $15 million or $20 million on one PS3 game, come back to me with five or six Wii pitches." That's because (a) games take far less time to create on the Wii -- 12 months versus two to three years for the competition, (b) it costs roughly $5 million per game in development scratch versus $10 to $20 million for a typical Xbox 360 or PS3 game, and the Wii has been outselling every system except its own handheld DS Lite since November 2006, i.e. some eight or so solid months of market growth.

So 5m vs up to 20m and in some cases 20m (Mario) vs 100m (GTA).   No question Wii development is signifigantly cheaper.

Still didn't prove your point. You said that Wii games needed ~250,000 units to break even and X360/PS3 were a million. That article didn't prove it. All it said was that (and mind you, it didn't give a Wii average, but only 1 number) the average X360/PS3 game seemingly costs $15m. But that didn't give any numbers concerning break-even points, given the fact that the average X360/PS3 game makes developers more money.

 

 

 Lol a million units to break even. If game devs make even $20 per unit sold of they're game then a million units sold would give them $20,000,000, which is 10 mil more then a large budget game on the PS360 takes. Even at $15 per copy they make 5mil. And as far as I know, devs make more then that. This would put the number of copies needed to be sold around 500k for a game with the size and cost of LO to get its money back and then some.



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Gamerace said:
I agree it would have been better for developers if all systems had comparible specs.

But the fact remains the HD consoles have raised development costs 3-4 times the amount of last gen games without any way for developers to reap 3-4 times the revenue and profit.

I don't think sticking all FPS on Wii is the answer, I think developers need to diversify their product offerings (like Ubisoft) so they are no longer dependant on having a blockbuster hit to be profitable.

I think most of us (should) agree this is what's causing the issue. It's an all-or-nothing mentality among developers. Instead of getting diverse products that range in budget, we're getting one size fits all going both ways - casual-fests for the Wii, and blockbuster AAA's on the X360/PS3. Systems need a good mix of both. I'd argue that Lego: Indiana Jones or Batman have made more money for LucasArts than most games have....Why? They didn't need mega budgets, even on the PS3/X360 and did well.

It's kind of like the pre-crash mentality of games, but in the opposite: The markets were flooded with utter trash for games, which caused consumers to react negatively to the products at hand. Now, we're having developers only put out mega-budget AAA games with mega-budget AAA titles, and that's not a viable strategy.

In the movie industry (a good example), there are AAA movies that cost $200,000,000 to make. But there are also the indies that are put out by the big studios. Developers need balance that just isn't there, it seems.



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....How long of an argument do you want? I could go on for a while.

 

Not sure what you could go on about, you said it was outselling the other consoles it was not. Not what I would call and argument.



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welshbloke said:

....How long of an argument do you want? I could go on for a while.

 

Not sure what you could go on about, you said it was outselling the other consoles it was not. Not what I would call and argument.

The argument in question would be in response to his question concerning what qualifies as "good", not to the matter as to whether or not The Force Unleashed sells well on the Wii (which, all things considered, it does).



psrock said:
If the solution is so easy, why haven't they switch yet?

Interesting you should say that

http://seanmalstrom.wordpress.com/2008/12/18/why-third-parties-wont-embrace-wii/



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bigjon said:
Shadowblind said:

Developers make games on systems that sell games. If they see the Wii selling games to the demographic they want, they will switch. You can want to view game devs as the big bad stupid idiots who only want bloody games and hate the Wii as much as you like, but I promise you they have more marketing knowledge then anyone here, and know what will make them the most profit.

I suppose the economic depression has nothing to with losing money either, right? And we talk of ignorance here. If we end up getting sub-par games that sell well because they target the Wii's primary demographic, then the game industry WILL end as we know it.

No more Heroes is a more hardcore game and if you consider that  game selling well, then the 360 can sell tons of JRPGs well.

western devs have done nothing to prove to me that they are not idiots. Just becuase you are the CEO or Marketing Chief does not mean you know what is best for your company. Look at all the companies going down and tell me they ALL know what they are doing. (referring to the economy as a whole, not just gaming with the last statement)

If you are a business your goal is to make money, and increase shareholder wealth. Now, the artist and such in the studio may be more about making cool games, but the guys at the top care about the bottom line, and they are the ones with the final say. It seems those guys at the top are starting to reconize what the Wii could be. (net profit wise)

 

Additionally, I want to remind everyone of the Peter and the Dilbert Principle. The Dilbert Principle says that bad emmployees are moved to where they can do the least amount of damage: management. The Peter Principle says people are promoted to the level of their incomplitance. It would not be a surprise that CEOs can't fogure out what to do. Third parties can sell games on thwe Wii; they are just doing it wrong.

(sorry for double post)

 



bigjon said:

So this is what I have been wondering, would we be on the verge of a gaming crash if not for the Wii and DS? It would not be like the 80's.... but It would see many developers go under, and the weakening of the gaming industry as a whole. ALL of the growth we are seeing is Wii and DS related, and many companies even now are able to operate because of highly profitbale casual type games they did put on the Wii(Carnival games, MySims, Lego Star Wars, etc). I think in the future they will put better game on the Wii and they will sell well, not as well as on the HD consoles, but more of them will sell (not just a select few) and they will be more profitable due to the MUCH lower dev cost and the familiarity with it (Similar to the Cube)

Well that is just what I think : ).

Wait, how do you think its going be better games on the Wii now that publishers will more focus on it.  If anything, you are going to see a flood of more casual focused games on the Wii then you did before.  Low costing to produce games that will sell to mass consumer to the Wii.  Third parties will not be going after the small core base but the massive casual base that the Wii has developed. 

And less money will be going to fund any new IPs on the HD consoles.  Only games that will definately sell on the HD consoles will be greenlighted, and it will be mostly sequels.  And if those sequels don't sell, they will be axed like Need for Speed franchise.  It will be up to Sony and Microsoft to keep its consoles going.  But Microsoft is not going to be able to buy enough exclusives forever and Sony can't bankroll three different territories of game development.  They are already suffering in Japan cause of this and has had lukewarm reception to most of thier IPs, especially this year.

Yep, the ball game has changed, but for the better, I don't think so...

 



I'm just saying...

mrstickball said:
Gamerace said:
I agree it would have been better for developers if all systems had comparible specs.

But the fact remains the HD consoles have raised development costs 3-4 times the amount of last gen games without any way for developers to reap 3-4 times the revenue and profit.

I don't think sticking all FPS on Wii is the answer, I think developers need to diversify their product offerings (like Ubisoft) so they are no longer dependant on having a blockbuster hit to be profitable.

I think most of us (should) agree this is what's causing the issue. It's an all-or-nothing mentality among developers. Instead of getting diverse products that range in budget, we're getting one size fits all going both ways - casual-fests for the Wii, and blockbuster AAA's on the X360/PS3. Systems need a good mix of both. I'd argue that Lego: Indiana Jones or Batman have made more money for LucasArts than most games have....Why? They didn't need mega budgets, even on the PS3/X360 and did well.

It's kind of like the pre-crash mentality of games, but in the opposite: The markets were flooded with utter trash for games, which caused consumers to react negatively to the products at hand. Now, we're having developers only put out mega-budget AAA games with mega-budget AAA titles, and that's not a viable strategy.

In the movie industry (a good example), there are AAA movies that cost $200,000,000 to make. But there are also the indies that are put out by the big studios. Developers need balance that just isn't there, it seems.

I think this is the mentality of more than just the devs, this seems to be what fanboys (HD and Wii both), industry analysts, publishers, etc.  Like I said before, there is tons of room for new development on all the platforms, the problem is everyone is trying to get into the FPS on HD consoles and casual games on the Wii.  This trend seems to be the absolute wrong direction for the gaming industry and will result in some serious repercussions if something isn't done.

Your Lego examples are perfect, those were games that are not great, but good, and the budgets used to develop such games reflect it.  This was the same for the previous generation, and the gen before, etc. the only problem is in this gen there seems to be this idea that the market is as severly fragmented as ever before.  My belief is that this is a misconception that is hurting many of the western devs, because they follow this all-or-nothing mentality.

 



mrstickball said:

Khuutra said:
mrstickball, isn't the Wii version of The Force Unleashed outselling both of the other versions on a weekly basis and is, in fact, about to pass up the PS3 version in lifetime sales?

Just to point that out.

And no, Zack and Wiki and No More Heroes were not big-budget. They were anything but. They also made tidy profits.

Actually, no. The X360 vesion of TFU outsold the Wii version last week.

Here are the totals from VGC Worldwide:

5
Star Wars: The Force Unleashed
LucasArts 12 44,581 1,328,066
6
Star Wars: The Force Unleashed
LucasArts 12 43,164 826,372
9
Star Wars: The Force Unleashed
LucasArts 12 32,727 899,154

And need I remind you that the Wii has outsold both consoles in the respective markets (NA and PAL) where this game was huge? TFU is one of the better sellers for the Wii, but it still is down ~500,000 units versus the X360 and ~70,000 on the PS3 (although it's obvious it'll pass the PS3). Is that considered 'good' for a console that has well over twice the install base of the PS3?

 

But you don't seem to get that the Wii version probably cost 1/4th of the cost of the HD versions, thereby making a much bigger profit than the other two.

 

 

If I ran a business where product X costs me 20 dollars to make, and I sell 500 of them. And product Y costs me 5 dollars to make, but I sell 250 of them, and say both products cost about the same at retail, which one of those products do you think I'd be more impressed with?

 



 

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welshbloke said:
Gamerace said:

Can't find it now.  Did find this:

As for this latest realigning, money talks (innovation walks) and you have to assume someone simply woke up and smelled the honey pot. According to chairman and CEO of Foundation 9 Entertaiment Jon Goldman, "Publishers are saying: Instead of spending $15 million or $20 million on one PS3 game, come back to me with five or six Wii pitches." That's because (a) games take far less time to create on the Wii -- 12 months versus two to three years for the competition, (b) it costs roughly $5 million per game in development scratch versus $10 to $20 million for a typical Xbox 360 or PS3 game, and the Wii has been outselling every system except its own handheld DS Lite since November 2006, i.e. some eight or so solid months of market growth.

So 5m vs up to 20m and in some cases 20m (Mario) vs 100m (GTA).   No question Wii development is signifigantly cheaper. 

 

This is sort of what you would think but not actually what happens. The only developer who can consistently make money on this platform would seem to be Nintendo itself. I think the platform still struggles to return the investment it really should be with its market share for most developers.

 

 

If that were true, then publishers wouldn't be racing to put out so many crappy games.

 

And we have executives from Ubisoft, and Activision, who have both said that the Wii profits are paying for their HD game development.

 



 

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