2009 is incomplete, since the fiscal year ends at the end of the month and data for that quarter only comes later.

What the figures show is that revenues are increasing and expenses are increasing much faster. That's the whole point of my argument.

As for detailed data it may be possible to get it from the reports but I haven't done so.

@NJ5
I had supposed the 2009 number was a projected amount, it doesn't make sense to put it there otherwise.
And I can read the factual numbers. Revenues increased, expenses increased more. But they are not an argument by themselves, nor in particular _your_ argument.

Your argument is that the _cause_ of that net loss and generally of the diminishing profit is development on PS3 and 360 (and PC?). Or that their financial situation would be much different if they concentrated on the Wii.
Actually it would be useful if you stated your argument clearly.
I say that you have no support for this argument without more detailed data, because those total numbers are the sum of too many diverse contributions.

PS: After all this talking, do we have real cases of good games on 360 and PS3 that caused a net loss to their developers? For example, what do we know about GTAIV (huge costs) or Valkiria Chronicles (poor sales)?

It's not projected, it's for the fiscal year ending 2009-03-31 (fiscal years often use weird notation like that). That's why I wrote "2009 to date" in the other thread.

My argument is that PS3/360 budgets are the biggest factor in gaming companies losing money these days, and that that's largely due to expenses related to making high-quality graphics. It's established that PS3/360-level graphics are much more expensive than Wii-level graphics, that has been confirmed even by Sony's 1st parties as well as several 3rd parties.

As for the question in your PS, it's not really just about good games. Not all games are good and companies have to find a way to survive flops. The bigger the budgets, the more impact a single flop has on the company. That's why budgets have to be reduced.

If I had to give an example and since we're talking about EA there's Mirror's Edge:

http://weblogs.variety.com/the_cut_scene/2008/12/ea-sports-escap.html

-Confirming what I reported yesterday, "Mirror's Edge" seems to be doing very poorly. Asked how new properties are performing, the best Riccitiello could say about DICE's parkour action game is "'Mirror's Edge' is one that was very strongly reviewed. It's going to go forward. We're going to look at some issues in the design to make sure a strong IP is married to a strong business."

I don't think this is a threat to "Core Games" as much as it is a demonstration on how flawed the business model of HD games has been ...

In most industries you would probably determine the budget of a game based on the realistic worst case scenerios for how the game would sell in order to limit your risks and maximize the return you would receive off of a product. In the videogame industry a business model formed where products are given whatever resources are needed to maximize the visual quality of the game, and then the marketing budget is set based on how many sales are needed to make the game profitable; this business model probably worked really well in the mid 1990s where bumping the budget of a Playstation/N64 game from $1 Million to $2 Million easily ensured the 50,000 to 100,000 unit sales increase necessary to recover the costs, but it doesn't seem to be working that well when you're (in many cases) increasing the development cost from $10/$20 Million to $40 Million and need to gain 1 Million sales to recover the costs.

This statement is half right and half wrong.

It is right about studios making bad games and letting budgets out of control.

But it is wrong about there being millions who don't want some of these games. M&S is Sega's top selling game ever according to VGChartz. It has sold more than all but two Xbox 360 games -- CoD 4 and Halo 3 (Yes, it has sold more than GTA IV according to VGChartz numbers). 

Basically though, the problem is that for a few hits, there are a lot of misses. And misses with $30M budgets are really rough to handle.

This talk from Sega should also put an end to anyone believing that Wanted (and Scareface) developer.

Mike from Morgantown

^Yeah but M&S hasn't sold that well..I mean considering the userbase.

There are millions by the obvious fact that not every single wii owner bought M&S, they want something else.  There is always a potential game for the different segments of an install base.  I don't think that is disputable unless you can argue that the reason everyone doesn't buy the game is availability or they can't afford it.

 I'd much rather not and let Sega die as a company, like they should have after the dreamcast.

Even having only partial effective data ("to date"), it makes sense to project it over the missing days ( example: use last years data for the missing part, rescaled by the average YoY effective ratio ).

"Companies have to find a way to survive flops" you say. But what is the "company" here? Are you talking about EA or are you talking about Free Radical?

Because for a big company like EA in the past the development costs were low enough to throw anything at the wall to see what sticks. An analogue inconsistent behaviour came from, say, Ubisoft.

The higher costs today don't allow such inconsistency in quality and the results are mere loss for bigger companies, ruinous for smaller studios. But what are we asking for, exactly? That they move to Wii and lower production costs so that they can start flinging out random projects again? I don't care much for that.

Not all movies producer can afford big-budget movies. And you know what? They don't try to create blockbusters right away. They start with smaller movies, not so big stars, relatively unknown directors. Then the quality ones emerge and arrive at blockbuster budget level, where they are financially covered by big production companies who can afford the flops, but don't finance with $150M every kooky idea shown to them. That's what EA should do: help quality emerge.

The worst impact will be on those studios who could afford hit-or-miss and now can't. It won't touch the ones who were consistently good in getting the best out of their budgets. It won't also touch quality, small projects that can find a distribution channel as downloadable games, or for which a low-cost "indie" label could be created by MS and Sony.

That's the way of the world. It's the way movies went, and I still don't see why we should go out of our way to support mediocrity.

I won't fret for a game industry that is half as much in global size, but made of studios like Naughty Dog: see this.

PS:

The Variety article you linked to is old (december 08). Mirror's edge sold at least 1.2M between 360 and PS3 and I don't have data for the PC version. I doubt it resulted in a terrible economic disaster, more probably slim losses, and it worked as a great ad for EA's new course. For once we weren't talking about overmilked franchises and DRM disasters.