Games bombing is nothing new of course, but it's never hurt the industry to the degree it does now.  The costs to develop games (on HD) have more than doubled. 

 Analysts have been warning that this would be a problem.  According to them a major game does need to sell in excess of 1m ww just to break even.  With the low adaption rate of HD consoles, a lot of publishers are going to be bleeding after Christmas.

Expect a lot of development to switch to Wii where the risks are much lower and installed base higher. 

In reference to "markup" mentioned above, let me clear up a misconception about markup as it is used in GAAP (Generally Accepted Accounting Principles) reporting. Follow the example closely and I'll show you why a $40 cost marked up 50% isn't $60 as you stated.

If I take $100 and mark it up 10%, what does that equal? $110, right? WRONG!
Why is this? If I take $110 and mark it DOWN 10%, what is my number? It's actually $99.00. For a company's financial statements to work properly and for all the numbers to add up correctly, this can't occur. So, then, what is markup?

(Sell Price - Cost) / Sell price = Margin or ($110-$100)/$110=9.09%
Or, to calculate margin you can divide by a reciprocal. For a true 10% (or 10 out of 100), divide by .9 (or 90 out of 100). For example, $100/.9=$111.11. This is a true 10% markup.

That means that a 50% markup DOUBLES the price. It is mathematically impossible to mark something up 100% because that would mean the price was zero and you can't divide by zero. That makes sense in the financial world at least because companies don't get their products free and there is always an associated cost -- i.e. cost can't ever really be truly zero.

When I worked retail many, many, many moons ago, margins on PC related software (MSRP) were right at 50% for games on computers. We didn't sell console, admittedly, so I don't have a solid frame of reference. Many have said that console games are wholesale at 20% below MSRP. I find it hard to believe that it is this low but maybe so. If anyone who truly has insight into the wholesale costs of the average console game, please let us know...

There is a rumour that Stranglehold demo will hit PSN store tomorrow...

source ps3fanboy.com 

A pity really but a reassuring turn of events I suppose as it is somewhat worrying to see video games becomming more and more a phenomenon akin to major motion pictures, obviously this fear mongering of mine is unfulfilled at the moment though should we ever start seeing games suffering from the extreme PG-13 formulaity or paramount emphasis put on the producer's opinion that motion pictures do (and no video games currently are no where near that bad no matter how you think the vg industry works) then we can kiss gaming as we know it goodbye and usher in an even less artistic age of gaming for the lowest common denominator. We shouldn't want to see consoles like the PS3 and 360 fail, just see their games take a more conservative and realistic approach towards a world where the average gamer is a financially unstable young adult.

P.S. Kber, I see you've taken Lair out of your sig.

Yeah... right after IGN's review I've cancelled my pre-order... shame.

LMAO

HS has a average of 80% in reviews similar to Motorstorm and ony 5% less the Resistance.  Might want to look at their sales.

Also what else are PS3 owners going to buy besides those games?  They will sell just based on the lack of games in the ps3 library.  PS3 has 3 games this month not available on the 360 in warhawk, lair and Heavenly Sword while the 360 has 6 not including xbox live arcade available this month.  Not saying those 6 games would be better then the 3 available for the ps3 but just saying you have alot more options for the 360 which spreads the sales around while the ps3 has no real competition.  I am also not including most recently released games like bioshock,blue dragon, two worlds which just spreads the 360 owners money too thin.  Thank goodness for gamefly.

 QFTMFT

The biggest problem I see for Strangehold is that the 360 fans are going to be busy playing Halo 3 and Sony fans just don't seem to be interested. They are more interested in Unreal Tournament and Haze for their shooter requirements.

I can see COD4 on the PS3 not doing that well either. Sony fans just don't seem interested from what I have seen.

I think when these projects were started developers were expecting the PS3 to be where the Wii is at now (~10 million sold) and the 360 to be at several million more than it is now, basically a combined hardcore audience of 20-25 million.  That kind of an audience would have made these games a much safer bet but the audience alone isn't the only factor, the fierce competition between the 360 and PS3 benefits third parties, especially the ones with big games like those being talked about in this thread.

Some companies are definitely going to suffer like Midway and Take Two but a lot of others are very large and can spread around the losses so as not to take a critical financial hit (Electronic Arts and Ubisoft). Also some of the financial hits that would have normally gone to third parties are likely going to be absorbed by Microsoft and Sony instead (Microsoft giving $50 million to Take-Two, Sony making deals with Epic and Ubisoft, etc).

I seriously doubt there will be a crash and there are almost always some companies going out of business near the start of each generation. Both Microsoft and Sony need these kinds of games to justify their consoles so it's very likely they'll help third parties carry the load until their consoles' installed bases are large enough to do it without much financial help.