Are you sure about that $40 figure, I thought only $20 went to the publisher in general, but that could be for M$ with a $10 licence fee, whereas I believe Sony has a $5 one (someone here said so), so I would guesstimate about $30 for Sony per game (which means that Uncharted made a $40 profit as it sold 2m unbundled copies at least... which sounds too high)

As for the budget, the last estimtes put it at $40m. However, squilliam has provided a reasonable way of discovering how much it costs to produce a game, taking $100,000 per employee per year. GG have a staff of roughly 140, and they have certainly been working on this fully for 2 1/2 years since Liberation, with some other people working for more than that, so I will just take years, which would lead to a cost of $42m. Again using Uncharted, they had to create a new engine, as well as help other devs, they took 2 years in fully development, and had had a small team working for a further year before that, and that game cost $20m, using a staff slightly larger than 1/2 of GGs, which makes the figure for KZ 2 look a little low, but you have to incorporate motion capture, and more extensive use of acting, and the fact that ND had to completely recreate the way they code games, and GG have had help making their game, so I think a $45m budget sounds reasonable

However, I don't think either of those figures includes marketing, and there is a good chance of a $15m advertsing campaign as they have announced that they are spending £2m in the UK, which is about $3m, the UK is about 1/10 of the PS3's install base, but it will have a higher ad budget than elsewhere in Europe due to the dominance of FPSs and the Xbox, and of course that 10% is out of a total including Japan where there will be far lower budget. So $15m is probably on the low side, and there is a good chance of it being far higher, maybe up to $25m

So, I estimate the total budget at $60-70m. With each copy giving Sony roughly $30 (maybe slightly more in Europe), they need to sell 2-2.3m copies. They have already sold 1.1m copies in Europe (they have sold them, retail has not), so I don't think that by my calculations KZ 2 will make a profit. However, there are other factors, such as variable exchange rates that makes it even more complicated to work out, and the budget is filled with guesswork, so I could be widly off

Good to know that link proves me right in that Unreal Engine development did not count in the "Gears of War" 10 million estimate.

I think that Munkeh111 is pretty close on this one.

If Killzone 2 sells over 2 million units, then it will be profitable.

I gotta really wonder though.... are that many games really getting canceled before they are made?  And i mean that many that are very far allong and spent a lot of money on resources, since the games getting canceled in the idea stage probably haven't cost that much.

Cause i mean otherwise, if profit targets are so low for one of the most expensive games this gen....

Why are all these companies losing their shirts?

I mean, with a  number like 2 million for a game this expensive.  The 20% of games released make a profit number doesn't jive.

That is precisely why I think there is a massive hole in my arguement. Well with publishers, they only get $20-25, and the actual developer will only get something like $6 I believe (these figures are semi-made up, there was an article in OPM UK a while ago about where your £50 goes, but I can't remember the precise stats).

You have to look at how many bombs are put out, though.  Look at FaceBreaker, which is under 200k between all platforms combined.

It's highly concieveable that only 20% of HD games don't make a profit, becuase the ones that don't make a profit aren't very well known, so we don't really hear about them.

Even Sony, whose games are generally the best selling titles on the ps3 (8 of the ps3's 26 million sellers are published by Sony - Heavenly Sword, Uncharted, R&C, GT5P, Resistance 1/2, MotorStorm, LBP are all million sellers, and MotorStorm 2, Socom, and Killzone 2 will soon be joining them) manages to release duds, like Folklore, Genji, Lair, and the NBA series.

Then you have companies like Sega that release as many profitable titles as Sony does unprofitable ones.

@mm, but even with single platform development, I dont think SCE Studios are making a loss, maybe the fact that they have had really cheap games sell really well. LBP was developed for about $5m, and that has already brought in $60m if my calculations are right, which doesn't sound right

For those who don't know, I believe these guys are talking about this article.  It says that only 20% of released games are profitable, and that if you include those games that are never released, only 4% of games are profitable.

@Kasz216

Think about if this game was third party.  Then a $60 million dollar game would need to sell somewhere between 2.4 and 3 million copies just to make it to profitablity.  Those kind of sales numbers are much harder to come by.

Games on the 360 and PS3 are expensive.  I've heard around $16 to $20 million dollars being pretty common for some bigger games.  If that is true, a third party game is going to need to sell 0.6 to 1 million copies to just to be profitable.  Not many games make it to 1 million copies sold.

SCE is definitely profitable.  SCEWWS is probably one of the more profitable development houses out there, and is probably one of the more profitable parts of SCE as a whole.

My point was that even a publisher like SCE, who's games manage to perform excellently compared to the competition, manages to release a dud here and there. For other publishers, the amount of duds goes up, so that 20% figure is feasible.  Especially for a company like Sega.

And, as theRepublic said, third party games would need to sell even MORE than first party titles to break even.

I estimate sales at arround 2.5.... so I guess yes?