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

Shanobi on 18 December 2008
Shadowblind said:
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.

 

 

Game developers don't get anywhere near 20 dollars per unit sold. Try more around 5-6 dollars.

 

Using this fact, now maybe you can see why there are so many studios being shut down, and game creators being layed off, during these "record sales".

 



 

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mrstickball on 18 December 2008
Shanobi said:
Shadowblind said:
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.

 

Game developers don't get anywhere near 20 dollars per unit sold. Try more around 5-6 dollars.

Using this fact, now maybe you can see why there are so many studios being shut down, and game creators being layed off, during these "record sales".

 

...Care to cite where developers only get $5-6 per unit sold? Last I checked, about 50% of the retail cost went to the developers...If not a little more.

 



Back from the dead, I'm afraid.

Shadowblind on 18 December 2008
Shanobi said:
Shadowblind said:
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.

 

 

Game developers don't get anywhere near 20 dollars per unit sold. Try more around 5-6 dollars.

 

Using this fact, now maybe you can see why there are so many studios being shut down, and game creators being layed off, during these "record sales".

 

By that reasoning, a $5million game for the Wii that averages 300k copies will make only $1,500,000 too, thus taking a MASSIVE loss as well. It would take a million copies of a Wii game sold to even break even. If that were by any means correct, then practically all game developers would be going bankrupt, whether by Wii or by HD console, and thus the game industry is doomed to fail no matter what happens.


Thus leading me to believe this whole 5-6 dollars thing is bull.

 



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Kasz216 on 18 December 2008

Keep in mind it costs a lot more to run a company then just making back the dev costs of the game.

I think that's where people are missing a lot of this.

Stuff like... keeping the utlities on, new computers, paying the management and other people not on dev teams who do stuff 9-5.  Janitors, Ad men, CDs, factories that put the games together, manuals, shipping etc....

Advertising is another big one not counted in Dev cost.  That can range up to as much as the game development itself....


So in reality to "Break even" you need to make significantly more then your listed development cost once you figure in all the extra costs of buisness.

If you just kept breaking even on games you would eventually go bankrupt.  It'd be slow.... but it'd happen.



Squilliam on 18 December 2008
Kasz216 said:

Keep in mind it costs a lot more to run a company then just making back the dev costs of the game.

I think that's where people are missing a lot of this.

Stuff like... keeping the utlities on, new computers, paying the management and other people not on dev teams who do stuff 9-5.  Janitors, Ad men, CDs, factories that put the games together, manuals, shipping etc....

Advertising is another big one not counted in Dev cost.  That can range up to as much as the game development itself....


So in reality to "Break even" you need to make significantly more then your listed development cost once you figure in all the extra costs of buisness.

If you just kept breaking even on games you would eventually go bankrupt.  It'd be slow.... but it'd happen.

$100,000 per developer per year is the current complete cost per developer including much of the on site overhead, excluding advertising.

 



Tease.

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Kasz216 on 18 December 2008
Squilliam said:
Kasz216 said:

Keep in mind it costs a lot more to run a company then just making back the dev costs of the game.

I think that's where people are missing a lot of this.

Stuff like... keeping the utlities on, new computers, paying the management and other people not on dev teams who do stuff 9-5.  Janitors, Ad men, CDs, factories that put the games together, manuals, shipping etc....

Advertising is another big one not counted in Dev cost.  That can range up to as much as the game development itself....


So in reality to "Break even" you need to make significantly more then your listed development cost once you figure in all the extra costs of buisness.

If you just kept breaking even on games you would eventually go bankrupt.  It'd be slow.... but it'd happen.

$100,000 per developer per year is the current complete cost per developer including much of the on site overhead, excluding advertising.

Based on...?  Seems rather cheap.

 



Squilliam on 18 December 2008
Kasz216 said:
Squilliam said:
Kasz216 said:

Keep in mind it costs a lot more to run a company then just making back the dev costs of the game.

I think that's where people are missing a lot of this.

Stuff like... keeping the utlities on, new computers, paying the management and other people not on dev teams who do stuff 9-5.  Janitors, Ad men, CDs, factories that put the games together, manuals, shipping etc....

Advertising is another big one not counted in Dev cost.  That can range up to as much as the game development itself....


So in reality to "Break even" you need to make significantly more then your listed development cost once you figure in all the extra costs of buisness.

If you just kept breaking even on games you would eventually go bankrupt.  It'd be slow.... but it'd happen.

$100,000 per developer per year is the current complete cost per developer including much of the on site overhead, excluding advertising.

Based on...?  Seems rather cheap.

 

Dividing EAs expected cost savings by the number of developers fired and industry estimates by two seperate developers on WWW.beyond3d.com which both match up about perfectly.

 



Tease.

Ail on 18 December 2008
Kasz216 said:
Squilliam said:
Kasz216 said:

Keep in mind it costs a lot more to run a company then just making back the dev costs of the game.

I think that's where people are missing a lot of this.

Stuff like... keeping the utlities on, new computers, paying the management and other people not on dev teams who do stuff 9-5.  Janitors, Ad men, CDs, factories that put the games together, manuals, shipping etc....

Advertising is another big one not counted in Dev cost.  That can range up to as much as the game development itself....


So in reality to "Break even" you need to make significantly more then your listed development cost once you figure in all the extra costs of buisness.

If you just kept breaking even on games you would eventually go bankrupt.  It'd be slow.... but it'd happen.

$100,000 per developer per year is the current complete cost per developer including much of the on site overhead, excluding advertising.

Based on...?  Seems rather cheap.

 

That sounds about right.

Costs per developers are around 150k/year at my company but we don't work in gaming and developers make a lot more than a developer at a gaming company would make ( and I believe our benefits are better too).

 



PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !

PS3-Wii gap : 20 millions and going down !

Squilliam on 18 December 2008
Ail said:
Kasz216 said:
Squilliam said:

$100,000 per developer per year is the current complete cost per developer including much of the on site overhead, excluding advertising.

Based on...?  Seems rather cheap.

 

That sounds about right.

Costs per developers are around 150k/year at my company but we don't work in gaming and developers make a lot more than a developer at a gaming company would make ( and I believe our benefits are better too).

 

Yep! Game developers are in it for the love and not the money!

 



Tease.

d21lewis on 18 December 2008

Personally, when this gen began I was extremely underwhelmed by what the 360 was showing. I had every intention of calling it quits when the PS2 dried up (which surprisingly STILL hasn't happened). The Wii rekindled my excitement with it's innovation. Who's to say whether or not we were in for another crash (I doubt it). I can say without Nintendo I probably would've been out of gaming.