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Forums - Gaming Discussion - Are wii development costs really cheaper?

WereKitten said:

^Lair costed about that much to develop, actually (12-15M).


And SMG is first party, so obviously Nintendo makes more on each copy. But if it costed 20M then there's no way it could break even at 250k sales. More about 0.8-1M, probably.


Anyway, we're talking third party here.

I think Lair cost more than that:

http://i32.tinypic.com/10glffn.jpg

Apparently $12-15m was the initial budget, with costs getting bigger later (and the game got delayed).

 



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^Thanks, I stand corrected and I'll update my previous post. Do we have other data about it, or the costs of games that came up about the same time?



"All you need in life is ignorance and confidence; then success is sure." - Mark Twain

"..." - Gordon Freeman

WereKitten said:

@Plaupius
Sorry if my table was misleading, it was not meant to be.
My rationale was simply to index the table using each version's sales. As in: I code an FPS that I think will potentially sell about 2.5M on each of the HD platforms on average (most probably skewed towards 360 sales). How does this fare against selling the same on the Wii?

You say: how come you can treat each version as if it had roughly the same sale projection. The install base of the Wii is approx. the same as 360+Ps3, but the effective target market depends on the game genre. For FPSs for example up to this point it has been proven that the Wii market responds less than each HD console. This can obviously still be disproven if, say, the conduit manages to sell more than a good FPS on PS3 or 360.

Speaking in general I don't think it's too wrong to assume that about half of the Wii owners belong to the "extended audience". That audience will be interested only in a little number of the AAA big games we're talking about here such as some platformers and simple racers and sports games, but not into the majority of them (think Resident Evil, Final Fantasy, western RPGs, mature shooters, complex adventure games, race sims), thus I took an "effective market" for the Wii of about the size of each HD console, with the caveat as I stated of games that you know will sell well to the Wii demographics,ie also to the extended audience.

Under this assumption, it was reasonable to make that table. If you don't think the assumption is valid, you can still read it, just remember what each column means.

With shams numbers ($18.5 vs $14), I can update my table to this:

Sales
x console Profit Wii Profit PS3+360 1M -6M -11M
1.5M 1M 7.5M
 2M 8M 26M
2.5M 15M 44.5M

Just for reference: the break even sales are about 1.43M on the Wii, 2.59M on PS3+360 (1.29M average and on my table)

And double check your math about HD needing 7-8M sales more, it is wrong. The correct one is

Profit Wii= $14*sales Wii -$20M= Profit HD = $18.5*sales HD -$48M

=> sales HD = sales Wii *14/18.5 +28M/18.5 = 0.76 * sales Wii + 1.51M

So say that a Wii game sells 2.5M, then the same profit ($15M) will require about 3M HD sales (in total between PS3 and 360)

The problem I have with your table is that it makes an assumption that the game will sell similar amounts on all three consoles, which is true for some genres/games, but false for some others. Maybe I was wrong in my approach to take things on a more general level, i.e. a game that would cost 20M to develop on the Wii and 48M to develop on the PS360, but I think it is fair to look at what kind of total sales generate what kind of profits.

You're right about my math sucking, I stand corrected. Prompted by this I made some calculations about how the Wii vs. PS360 platform profitability changes regarding the development costs but that work is still in progress. I want to find out, based on a number of different assumptions, what is the "sweet spot" for Wii development and for PS360 development as well. So, basically, what kind of projects should be allocated to what platform, based on sales and dev cost expectations. Once I get some results I am happy with, I can post them here if there's any interest.



Basically it comes down to this:

Developer A has $15m. They can either develop for the HD consoles or the Wii. They can develop 3 Wii games or 1 HD game for that budget (just an example).

Of course they will spend those $15m anyways because they need to invest. The problem is this: If they spend all their money on 1 HD game the risk is way bigger. If this single title fails on the market (let's say it loses $5m) they have nothing else to make up for it.

On the Wii if one of these 3 titles loses $5m they could still make up for it with a success of the other titles.

Now some people could say "but the chance of a title bombing on Wii are way higher!" But as Nintendo stated the Wii sold the most third party software last year. So in the end you have more 3rd Party sales on the console and can produce a bigger number of titles.

Of course there are other factors playing into this. For example user demographics (if you are a big FPS developer you shouldn't go for a console without FPS fans), the number of 3rd Party titles on the market (if there are three 3rd Party titles on a Nintendo console for one 3rd Party title on an HD console it shouldn't come as a surprise that the Wii sells more 3rd Party software and the risk for your own games is higher), marketing power (bigger developers have more resources for their marketing) etc.

But overall that's the situation. Currently it seems like smaller developers have it easier on the Wii (because they don't have the marketing power and the "budget minimum" is higher on HD consoles) while bigger ones are still slightly in favour of HD consoles.

Edit: I forgot to mention that the maximum loss of a single Wii game with 1/3 of the development cost is (of course) also way lower. So if your title completely flops on the market you won't get hit that hard on the Wii.



Pristine20 said:
MaxwellGT2000 said:
The reason Wii development is cheaper is because to make an HD game in the same time frame as games in past gens it takes a much larger staff then it once did, the Wii however takes a similar team size as last gen to develop a good game, smaller teams means either more games on the market or cheaper costs which ever the developer and publisher decide on is their best route.

Bottom line is, because it takes a smaller team to make a quality Wii effort the development costs on Wii are significantly cheaper, there is no way to argue with that...

read through the thread, you'll see that all isn't set in stone. I really don't want to repeat points that have already been made

 

 

And get another brain tumor from reading the replies, I think not.

No game development is set in stone, but to make a traditional game on Wii trying to max out the Wii console much like games try to max out the other two consoles you're not looking at as much work and as big of a team and that means development is cheaper, period, there is no debate here...

There was a thread a while back about this same topic and it ended up getting Groucho banned (also known as Procrastinato now, amazing how he's still in the debate now) all because of his feverous debating lead to trolling cause we all know the real reason people are so opposed to Wii being cheaper to develop for is because fanboys hate to hear their console somehow being bad for the industry and their sworn enemy having an upper hand, it's a terrible thought I know but people need to manage somehow...

 



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@Plaupius
As I said, I presented the table in that way mainly because I was thinking of games that would sell more or less like that, but I think the important thing is that we understand the significance of the numbers now. I look forward to your sweet spot hunt, anyway :)

@Louie
Well, in the end that's basically it, yes :) Seeing a few numbers quantified was nice, though.
The risk management might be different for bigger publishers of course, that's why they are going to differentiate and spread their investments.



"All you need in life is ignorance and confidence; then success is sure." - Mark Twain

"..." - Gordon Freeman

@Louie

I just wanted to point out that "Developer A" never has $15M at all. Developer A's publisher has like $150M, and that publisher can choose to make 20-30 good Wii titles, or 10 HD titles. The all-eggs-in-one-basket situation you're describing is not really true. The developers just get paid, milestone by milestome, and if the game flops, its the publishers loss, directly, and the developers loss indirectly, since it hurts their chances of getting good projects down the road, but doesn't actually cost them money.

I think this changes the analysis a bit.  It always boils down to the big picture, since the investors almost always have a load of games in the pipeline, and profiting is the publisher's direct concern, and only an indirect concern for the developers (still important though, obviously -- you don't get good contracts without a good rep).



 

@Procrastinato: You are talking about big developers / publishers like EA, Ubisoft, etc. But there are also small ones and they surely don't have a budget anywhere near $150m That's why I pointed out the difference between big and small pzblishers.