Sorry, that's actually completely incorrect.

HV has picked up a PUBLISHER for The Conduit. The PUBLISHER will (almost always) pay for the entire of the development cost - and make the developer a tidy profit.

Sega is the one at risk from The Conduit - not HSV (apart from reputation). Whereas they might have a royalty or bonus component based on sales - its typically not exercised, and they will rely almost solely on milestone payments.

The BIG cost for these "high profile" titles is actually the marketing. Companies typically spend as much on marketing as they do on the entire development process.

...

Sega might make $20/unit from the Conduit (after per-unit expenses). And they make this profit on SHIPPED quantities (i.e. sold to retail) - not sold to consumer.

With all the hype, I'll be shocked if they have trouble shipping a MINIMUM of 1m units worldwide (lifetime) - which equates to $20m US in revenue. They might spend around $7m on development, and another $7m on marketing (guesses).

Sega would *hope* lifetime shipments would reach 2-2.5m units. That is when they start to make some real money.

They hoped for lifetime shipments of 4m(?) for Mario & Sonic - the Wii version has hit 7m now, maybe 8m shipped to retail.

You must really hate The Conduit to make up something ridiculous like that. It could sell 0 copies and Sega wouldn't go under.

....are you related to trestres?

 But most of those are 1st parties though. of course it would sell even animal crossing. We're talking 3rd parties here and I doubt it will sell in its 1st week as expected.

take a look at the list of sega games on wii, some really low budget games are getting some really high sales.  M&S alone could fund multiple several projects, but look at games that go unnoticed like sega tennis and sonic riders all over 700k.  Games like Ghost Squad and House of the dead that are just ports of really old games that sell 500k and the other is heading to a million.  That's called hitting it rich.  Throw in Sonic and the secret rings at 2 million.

Are you posting to me? Because it seem you're posting to me. There are reasons why SEGA is shifting focus on the Wii, but the main reason was Valkyria Chronicles. The game bombed(and its a fact) and all their profits goes down the drain especially with a high budget title.

 so one game can make a catastrophe

^
say Sega lost $100 millions on Valkyria Chronicles (highly unlikely)... $20 * 6 mil of Mario & Sonic = $120 millions. That's more than enough to cover it without counting other titles. Even if The Conduit cost another $100 million (which I seriously doubt), I think Sega should be ok if The Conduit sells terriblely, although it would hurt, with the sales from all their titles on Wii.

Personally I think all the profit from Mario & Sonic would be enough to cover all the cost on Valkyria Chronicles and The Conduit.

 so do you mean its OK to lose money?!! What?!! What kind of business tactic is that? Anyway, sure... I did say Valkyria chronicles bombed and its the main reason why SEGA shifting on the Wii. I didnt say that SEGA lose 100 million dollars because of it but its definitely contributing factor. if you've seen the sales of HD versions games in vgchartz you can say HD model isnt really for them. And yeah, its the major factor but I didnt say SEGA lose 100 million of it.

About Mario and Sonic and LOL what kind of business tactic is that? You didnt gain anything and yet you didnt lose anything either.

Which means SEGA cant afford a bomb with one title unless they want to be dependent in M&S forever...

And I forgot wether M&S will recoup the losses of The Conduit Im sure we will seen a sequel if the title bombs right? ;)

Even how much you twist it if its a high budget title if it bombs the publisher and the developer will be sacrificed. Lets take a look this way, do you want SEGA to be selling M&S forever? its like being bankrupt.

Yushire: you're a good kid, but you really must calm down now and actually read what people are writing.

Sega won't go down on a single game. Valkyria wasn't a success and I'm pretty sure they lost money on that, but that game definitely didn't cost far beyond 10 million to make without the engine development.

Nor was it the reason they shifted investment towards Wii, that's simply Wii gaining marketshare.

And the Conduit bombing doesn't do a whole lot to Sega. It will only make all 3rd party devs/pubs reconsider mature games on Wii. Financially Sega is actually quite alright at the moment.

It's the small studio's that have problems right now, but that's a combination of the inability to get loans from banks and the bombing of very expensive HD projects.

Don't turn into another Trestres, just listen to others arguments and do some research on the topic.

Im sorry, Im always like this not because I dont like 3rd parties like trestres but because of the conduit. I dont hate the game but I just dont like people overhyped it like its just 2nd coming of Jesus walking on water.

Im just in rant mode when everyone talks about the conduit i dont know why...