Look at the biggest sellers on the HD consoles. The developers are forced into creating games with the best graphics. imagine if Killzone 2 looked like The Conduit, it would have died at retail with maybe 50,000 units at best. Sure it would have been cheaper than what KZ2 was but the same game on Wii would be a million seller.

It's ok to say HD consoles give flexibility but it's not realistic.. HD gamers are just that, HD gamers and they want the best graphics, something you don't get with Wii and aren't expecting when you buy a Wii game. Developers could of course release a game on 360 with lower graphics but they just don't sell.. So its more of a risk than spending the same budget on Wii and getting a top notch game out.

^I think that nobody disputes that Wii games can be cheaper to make because you'll be cutting man-hours in coding and assets.
I think that one reasonable point is that as soon as you engage into big projects on the Wii, there are several fixed costs that will greatly increqse the total, exactly as in big projects on the HD consoles. The end result is not even close to the one-third or one-fourth ratio that might very well hold for smaller games, and probably close to one-half.
If we really pit a $20M Wii game vs a $48M PS3/360 game (wondering about the reason for these numbers? read the entire thread, you lazy bum) we have:

As you can see developing multiplatform PS3/360 seems to be much more profitable unless your game really bombs, in which case upfront expenses will drag you down much more heavily.
So why do developers go into red on PS3/360?
- GTAIV did cost 100M dollars. If you let your budget grow to such incredible amounts it will be hard to pull into the black. If it was developed on the Wii for 60M dollars it would have needed 6M sales to break even. And I'm not counting the marketing. Does it look more viable?
- EA posted losses. This baffles me a bit, as they have several cash cows. But if you look at their sales, they are mostly around 0.8-1.5M per game. These medium-sized games could be the less profitable in HD, because you take all the extra costs, little of the extra revenue.
- Lair and Haze probably sunk the respective studios. If you try and bite a too big chunk on the HD consoles, you can be crushed pretty hard.

My idea? Going on Wii makes you more money for small and medium sized project, or for games that you know will sell heaps on the Wii demographics. Going on Wii is also safer for small and medium sized project, again especially if it's a casual/family game.

For big projects though, it seems that if you really want big profits you have to stay multiplatform PS3/360. You will also lose less if you come slightly short in sales.

Thus I can see EA going to differentiate, and same for Activision and other big publishers, but hardly taking the "big guns" games on the Wii as straight ports (note that a port to the Wii is almost the same as developing an exclusive as far as assets and code go. But you can still share Voice overs, CGI, marketing etc with the HD consoles).

Comments?

It's just shorter Dev time.... meaning less you have to pay the devs...

You're really stereotyping a lot of people here. A multiplayer shooter like killzone 2 benefits from improving it's graphics because the HD consoles are saturated with multiplayer shooters and there isn't really any other way to stand out from the crowd in that genre except one brings something super-revolutionary to the genre. If this was the case with the wii, you'd have a similar scenario. It'll probably do even worse on the wii if the wii were saturated with multiplayer shooters as well because it's graphics won't help it stand out. However, even if killzone 2 had conduit graphics it would still sell over 500K . KZ2 is just a strange game to use for such an analogy because graphics have been it's selling point even before the ps3's launch.

We'll see how the conduit actually performs on wii when it launches. You should know that it has an advantage in the fact that wii gamers have basically been clamoring for FPS games whereas HD gamers have been saying "enough is enough" with the FPS games. For something like PoP though, I would not agree that if the PS360 version was toned down slightly to reach wii levels, that it would sell significantly less. I also don't believe that a PoP wii would outsell the PS360 version at the same cost level to the dev.

I'm of the school of thought that believes that great games sell when they have an audience and that graphics only matter to a certain level. this is actually one of the theories behind the wii's success. It's still not a bastion for every gamer because some people (like myself) don't care for motion controls and the nature of the games it gets don't appeal to me (and it's not their graphics). JRPG (unlike FPS) is a genre which is still struggling on HD consoles. I'd reiterate, if a dev came up with a game like FFX (assuming the original ffx didn't exist thus making it a fresh idea) with the same level of graphics as the ps2 game, I still think HD JRPG fans would buy it in droves. Why? It's a great game and it's graphics reach the "acceptable". Unacceptable would be FFvii graphics at this day and age but FFX level ps2 graphics would always be acceptable to 90% of gamers IMO especially if the game is as great as it is.

Disgaea 3(ps3) wasn't visually impressive at all and it still sold on track with it's predecessors. Did the fans boycott the game because they were now expecting kz2 graphics since they bought HD consoles? Developers take the graphics route because as NJ5 pointed out earlier, it seemed to become somewhat of an arms race. The reality is that budgets should be made based on what the studio can afford and tailored to where the fans of such games are and this approach doesn't necessarily favor the wii over ps3 or 360 or a combination of both.

I find it odd that people are still trying to argue that HD development costs are not dramatically higher when every publisher in the world claims that they're dramatically higher, and most publishers that are running record losses (at a time when they have record revenues) are claiming that the main reason why they're losing money is due to out of control development costs on HD consoles.

In the previous generation (and on the Wii) a typical "Core" game would have a development team of 30 to 60 people who worked for 18 to 24 months, and a typical HD console game have development teams in the 80 to 120 range who work between 24 and 36 months to complete their project (with the occasional game that takes 120+ people 4 years to complete). There are very few "Fixed" costs besides the physical manufacturing costs of the discs/packaging, and marketing is certainly not a fixed cost ... As you start approaching $40 Million in development costs on the core game you're going to spend far more on marketing costs and "Production Values" because you simply can't afford to risk the game not finding an audience.

Beyond that, trying to estimate the profit based on retail sales price of a console ignores that the licencing fees across the consoles is not the same. When the XBox 360 first was released third party publishers defended the new "$60" price tag claiming that the majority of the price increase was due to an increase in licencing fees associated to the games ... At the same time it was rumored that Nintendo dropped their licencing fees (to the level they were at for the PS2) in an effort to attract more third party development.

^Well, out of control development costs will lose you money by definition on any platform. That's what the control should be, isn't it? :)
Anyway, about fixed costs...
Don't you agree about CGI, motion capture, voices, marketing? If Capcom had made RE5 as a Wii exclusive I doubt that they would have spent any less in marketing.

Btw, the profit on retail numbers i used do not come from retail price. I am pretty sure that I read somewhere that the profit per sale is lower on Wii than on 360/PS3, and it seemed that other people on these forums agreed with it. But I'll look for a reference.

PC development hardware basically accounts for 0% of the total dev budget. Its insignificant.

Dev kits, dev software account for a little.

Probably 95% of the 'core' cost (not marketing or anything else) is salaries.

  Total salary = number developers x time spent developing (average) + contractor (one-off) costs

You can make a Wii title with less developers (less artists, less programmers), in a shorter time (shorter dev cycle).

Typically, designs are simpler too: its not like you pick a game design, THEN pick the platform - its the other way around. So the Wii gets simpler, cheaper games - which are a LOT cheaper to make.

...

This is *development* - not marketing or producer level costs. Note that typically a publisher pays for development (fixed amount), and takes all the 'profit'.

For a $49.95 RRP title, a 3rd-party publisher will make around $17-$20 per unit.

For a $39.95 RRP title, a 3rd-party publisher will make around $13-$15 per unit.

A 1st-party publisher could make an extra $5-$8 per unit (on top of 3rd-party).

(rough figures, they do vary a lot)

PS3/BluRay manufacturing costs (per-unit) are higher than both the 360/Wii (by a couple of $, but this can vary).

^Great, I was looking for your name around to ask a developer first-hand :) thanks.

Btw, when you gave us the publisher margin, for what platform was that?

For a high profile game you would probably market it well regardless of platform ... In contrast, Haze was heavily marketed primarily because of how expensive the development was and had it been produced for the Wii (at a lower cost) its likely that Ubisoft wouldn't have seen the value in marketing it much at all.

On top of that, high quality CGI videos are not cheap and can cost millions of dollars for every minute of video (they can be done for less money but they tend to be lower quality) ... It is quite a bit different trying to justify $20 Million to develop CGI video for a game that already costs $40 Million and in-engine cutscenes will cost $5 Million, than it would be to justify $20 Million to develop CGI video for a game that already $10 Million and in-engine cutscenes will cost $2.5 Million ...

Out of curiosity I put your numbers up in a spreadsheet, and there is one thing which is not clear: you're assuming that the PS3 + X360 sales are per platform, so essentially you're comparing Wii sales to double HD sales figures. Given that the install base is roughly the same for Wii vs HD consoles, that seems fishy. So, here is a table using the same figures with the sales number meaning total sales:

That means that a Wii game that sells a total of 3 million is 13 million dollars more profitable than a HD game that sells the same across both platforms. IMO this is the way this comparison has to be made, you can't just assume that the HD consoles all of the sudden get double total sales.

Also, the publisher markup is really critical to these calculations and I don't think the 10$ and 15$ figures are exactly right. So, using shams figures (14$ for the Wii and 18.5$ for HD) the same calculations result in this:

Now the difference with a 3 million seller is 14.5 million in favor of the Wii.

shams figures point to the publisher getting aroun 35-40% of the recommended retail price, which IMO sounds right. If your high quality Wii title costs 10$ less in retail than the same title would cost in HD, that means the publisher is making 3.5 - 4 dollars less profit on the Wii title. That difference is what needs to pay for the difference in development cost. So, using the 20 million and 48 million figures, that means the HD game needs to sell 7-8 million copies more to be as profitable as the Wii version.