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Forums - Gaming - Analyst: Wii Is 'Fool's Gold' For Game Investors

greenmedic88 said:
There seem to be quite a few people who think that anything published on the Wii, or that focusing development dollars on the platform equates to the highest return on investment, and presumably the most sensible path to profitability as game developers.

While I think his words may have been taken out of context, Fils-Aime was recently quoted in the NY Times as saying it takes about a million units sold for a title to turn a profit on the Wii.

I'm guessing he meant Nintendo published/developed titles as they tend to take longer to produce, and presumably take more resources to develop.

But the assumption that other games developed for the Wii made a profit, regardless of sales, because "it was really cheap to develop anyway," is just that: an assumption.

Development dollars for the PS3/360/PC, while unquestionably higher, still represent a larger (but not necessarily broader) potential buyer base. This is most likely why we're still seeing virtually no change in game publishing trends with respect to big budget games, despite the success of the Wii in the console market.

User base demographics are more important than simple market share in this respect. So lead developing on the Wii (because is has half the console market) makes virtually no sense for many publishers given the target audiences for their games. The other half of the console market, with a fair share of overlap with the PC market, does not see the Wii as a primary platform for their gaming or we'd be seeing higher sales with respect to third party titles.

http://www.nytimes.com/2009/03/30/technology/30game.html?_r=1

"Reggie Fils-Aime, president of Nintendo of America, said publishers of games for its Wii console needed to sell one million units of a game to turn a profit. He said that was a lower threshold than for the other consoles. Only 16 out of 486 games for Nintendo Wii game machines have sold more than one million units as of March 1, according to NPD, which tracks the sales of consumer products. (Nine of the best sellers are made by Nintendo.)

Mr. Fils-Aime said Nintendo recognized the economics were changing when it developed the Wii. He said the company deliberately did not add high-definition capability to the Wii so games would be cheaper to make. "

"Sigh"

I hate misinformation.

“The fact is, there’s no single magic number that defines profitability for a game. It’s all based on the level of investment, based on the price point, and so it’s unfortunate that I was misquoted in that article.”

Source

Finally, one clarification on the story we did Monday on this subject. For the story, Nintendo had told me that publishers of Wii games need to sell only one million games to turn a profit. The company wrote me to say that it meant that publishers can make a profit selling fewer than one million copies of a particular game. Nintendo declined to be any more specific about a number. - NY Times



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Procrastinato said:
Mr Khan said:

If we throw the whole notion of profit out the window, then this article has a point.

That's an interesting point.  Do we actually know the costs of making a game like CoD:WaW, Metroid Prime 3, Tomb Raider: Underworld, or The Conduit on the Wii, or are we just assuming that its in the same "1/4th as much" ballpark that all the shovelware is?  Does the marketing and manufacturing cost 1/4 as much on the Wii as well, and does it garner the same revenue per unit sold?

Takes a lot of work to turn a profit.  Having 5-8x the sales numbers must be a nice place to start.

For The Conduit, I found this:

theRepublic said:
Let's look at it in an apples to apples comparison:

Killzone 2 is an exclusive FPS for the PS3. It is designed to push the console to its graphical limits as much as possible. Its development costs are rumored to be $60 million.

The Conduit is an exclusive FPS for the Wii. It is designed to push the console to its graphical limits as much as possible. I can't find anything on its development costs. Does anyone think it even comes close to $60 million?

Squilliam said:
theRepublic said:
Squilliam said:
theRepublic said:
Going back to my apples to apples comparison:

Killzone 2 is rumored to have a $60 million dollar development budget. To be fair, it was originally supposed to be $30 million before it went overbudget.

Using Groucho's numbers, development for The Conduit should be around $5.25 million (30 employees x $100,000 cost of employees x 1.75 years in development if released in June '09).

Keep in mind that these are BOTH exclusive FPS. Also keep in mind that BOTH of these games are supposed to push the limits of what is graphically possible on their respective consoles.

Now you can add third party technologies, voice acting, motion capture, publishing costs, advertising costs etc. It'd probably total at least $10M excluding advertising.

 

Interesting.

$15 million comes up to exactly 1/4 of $60 million...

$15 million, 1/4 cost? nononono KZ2 will probably cost about or a little over $100,000,000 once you factor everything in.

Just development vs development its >10M vs ~60 or ~1:6 between The Conduit and Killzone 2.



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@ theRepublic:

I had heard that KZ2 was in the 30-40M range. from some other sources on the web.  Quoting the high-end estimate helps support the idea that making games on the Wii is "cheap", but I'm not sure its realistic.  

In addition, why would marketing, etc. tend to cost so much more on the PS360, as opposed to the Wii?

 



 

I guess every PS360 game with a "AAA" budget has been a success huh?



Leatherhat on July 6th, 2012 3pm. Vita sales:"3 mil for COD 2 mil for AC. Maybe more. "  thehusbo on July 6th, 2012 5pm. Vita sales:"5 mil for COD 2.2 mil for AC."

Well it's sure as hell alot more games for the Wii that give developers profit then on PS360.

Hell some Wii games help finance some developers PS360 game...cough canival game cough cough.



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saicho said:

"Thus, in some sense you have more control over your fate on the 360/PS3 if you can come up with a high-quality game. Whereas on the Wii, it's a bit of a crapshoot for what works and what doesn't."

how do you ensure coming up with a high quality game? I'm sure Silicon Knight and Free Radical both thought they had high quality games in Too Human and Haze

I find that hard to believe. They knew they were releasing a bad game. Both games were crap, and they knew it. You don't make a game with that big a budget with such a high suck factor. I think they spent a lot of money on the development already and wanted to stop, so they just released as is.

Both were in development a very long time. Evidence that they weren't satisfied. And niether were we. Good big budget games succeed.

 



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Nintendo games sell only on Nintendo system.

WiiStation360 said:

He is right about one thing. In the eyes of developers, is no longer Wii vs PS3 vs 360. It is Wii vs (PS3 + 360)

 

 Wii vs (PS3 + 360) . That's not fair.Gamecube we need your help!



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@TheProf: In other words they ran out of money or just didn't see the expected sales being worth of further investment.



Ei Kiinasti.

Eikä Japanisti.

Vaan pannaan jalalla koreasti.

 

Nintendo games sell only on Nintendo system.

The more i read about this particular analysis the more i wish the publishers try and follow it!

Don't get me wrong all i wish is to play good games on my Wii and because publishers all they do is screw us again and again because of this fucking idiots anal-ist write this crap.

I do dare them to follow this so every single one bleed out all their money and die so the developers starting breath freely and create everything they want on every platform they want.