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Forums - Nintendo Discussion - Capcom disscus the Madworld sales

superchunk on 29 April 2009
noname2200 said:
superchunk said:
noname2200 said:
superchunk said:
Voltaire said:
Publishers dont gain $25 from a sale. A Gamastruta (?) article said it cost a retailer $54 for a game theyd sell for $60.

True.

As someone who worked in retail for over 10years; games, music, movies, etc have a very small markup. So Sega probably got ~$47 or so per game in gross profit. Net before payment to developer was probably closer to $42. Granted, this last part is pure speculation.

 

You're forgetting other costs though: manufacturing, shipping, duties, royalties, etc.

 

I'm guestimating that ~$5 per game is for those items except royalties as that is part of 'payment to developer'.

 

That doesn't seem to add up, though. You're splitting $18 between the console manufacturer, the retailer, the manufacturer, the shipper, etc. I don't see that as plausible. Forbes, for instance, has the retailer alone averaging a $12 cut, with the console manufacturer taking another $8 bite from that apple. So we're already at $20, before getting to all those other parties.

 

I was saying on a $50 game:

$3 to retailer

$5 to costs related to shipping (and all costs related), materials (and all costs related, incl packaging),  and advertising

$42 somehow split between publisher and developer

Now, I am 95% sure on the retailer part as I when I worked at Circuit City for 8 years we bought items at CC's cost. On games/movies/music/etc it was only a few dollars off if anything of the retail price. That was due to the almost no markup on these items. So I would expect if I got $2 off, then CC probably paid $47 for that $50 item as $1 would be part of their cost for selling the game. Granted I could be off by $1 or $2, but I doubt it.

So, Maybe a max of $5 goes to retailer.

Now for the costs in the $5 I have above, that is on a mass scale item where they are making hundreds of thousands of copies if not millions. We all know they pay <$1 per disc. So include case/manuals/ect is probably $4 for everythign, in the quantities that they get. Then add shipping costs of ~$1 per game. So maybe I was lowballing that figure.

So, maybe a max of $10 goes to manufacturing, shipping, advertising.

That's still leaves $35 easy for publisher and dev.

Currently that means SEGA has netted over $62 million.

So, the OP is about right in his guestimatation that they are about half way to breaking even. Should be doable and that really isn't bad considering the type of game Madworld is, its graphic style, and that its a new IP.

It will be profitable in its lifetime.

 

 

 



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famousringo on 29 April 2009
UncleFetus said:
theRepublic said:

I doubt The Conduit will be that expensive.  Development started in October 2007 and it is approx. a 30 man team.  That's a fairly small team and less than two years of development time.

I've heard the same about Madworld.  It was definitely developed on a small budget.

I don't know much about development but 2 years sounds like a long time. There must have been delay on the project. If it was an epic RPG I would understand that amount of time but an FPS on the Wii shouldn't take that long.

 

Two years isn't a long time at all. Games built off of complete engines take two years, like Call of Duty:WaW and Gears of War 2. High Voltage probably had some work done on their engine before they started using it to make The Conduit, but they're set to complete their project in 20 months, improving their engine as they go.

Compare that to all the sports games which have a one year dev cycle that offer only gameplay tweaks and small feature upgrades along with updated content, because that's really all they have the time and manpower to do in just one year.



"The worst part about these reviews is they are [subjective]--and their scores often depend on how drunk you got the media at a Street Fighter event."  — Mona Hamilton, Capcom Senior VP of Marketing
*Image indefinitely borrowed from BrainBoxLtd without his consent.

WereKitten on 29 April 2009
superchunk said:

I was saying on a $50 game:

$3 to retailer

$5 to costs related to shipping (and all costs related), materials (and all costs related, incl packaging),  and advertising

$42 somehow split between publisher and developer

Now, I am 95% sure on the retailer part as I when I worked at Circuit City for 8 years we bought items at CC's cost. On games/movies/music/etc it was only a few dollars off if anything of the retail price. That was due to the almost no markup on these items. So I would expect if I got $2 off, then CC probably paid $47 for that $50 item as $1 would be part of their cost for selling the game. Granted I could be off by $1 or $2, but I doubt it.

So, Maybe a max of $5 goes to retailer.

Now for the costs in the $5 I have above, that is on a mass scale item where they are making hundreds of thousands of copies if not millions. We all know they pay <$1 per disc. So include case/manuals/ect is probably $4 for everythign, in the quantities that they get. Then add shipping costs of ~$1 per game. So maybe I was lowballing that figure.

So, maybe a max of $10 goes to manufacturing, shipping, advertising.

That's still leaves $35 easy for publisher and dev.

Currently that means SEGA has netted over $62 million.

So, the OP is about right in his guestimatation that they are about half way to breaking even. Should be doable and that really isn't bad considering the type of game Madworld is, its graphic style, and that its a new IP.

It will be profitable in its lifetime.

 

Our local Wii developer (shams) gave us a number of an average of $14 profit for the publisher per sold copy (third party). Developers are paid upfront by the publisher.

For MadWorld, assuming a developing, publishing and marketing cost of $7-8M, that would mean a break even at 500K-570K sold copies.

Edit: my bad, it was actually $14 for a $40 game, $18.5 for a $50 game.

Assuming MadWorld sells a third of its lifetime copies at $50 and the rest at an average of $40 we get an average profit of $15.5 per copy and a break even at 451K-516K sold copies.



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

"..." - Gordon Freeman

Naum on 29 April 2009

Madworld couldn't have cost much to create, I mean a 5-6 hour game?



If it isn't turnbased it isn't worth playing   (mostly)

And shepherds we shall be,

For Thee, my Lord, for Thee. Power hath descended forth from Thy hand, That our feet may swiftly carry out Thy command. So we shall flow a river forth to Thee And teeming with souls shall it ever be. In Nomine Patris, et Filii, et Spiritūs Sancti. -----The Boondock Saints

noname2200 on 29 April 2009
theRepublic said:

I doubt The Conduit will be that expensive.  Development started in October 2007 and it is approx. a 30 man team.  That's a fairly small team and less than two years of development time.

I've heard the same about Madworld.  It was definitely developed on a small budget.

I think you're right. However, it was the only third-party game I could think of that might possibly-maybe-sorta challenge Red Steel in the budget arena, so I'm willing to concede the faint possibility.

Actually, let's crunch some numbers. We know that in 2007 the average game developer received a take-home salary of $73k.

http://www.gamecareerguide.com/features/416/the_game_industry_salary_survey_2007.php

 

We know that salary alone is only a portion of an employer's cost: social security, health care, etc. all add up as well. Let's be conservative, and peg each employee at $110k/year.

110k/12=9.2k

9.2kx20 months (Oct.2 2007->June 2009)=$184,000

$184,000x30=$5,520,000

If these numbers and assumptions are accurate (and there's almost certainly some variation that I missed) The Conduit cost $5,520,000 in salary, assuming the developers are all average-paid, numbered 30 in total, and all 30 worked on the game for 20 months. I can guarantee that there are additional costs (keeping the lights on, buying dev. kits/other equipment, etc.). I feel comfortable rounding this off $6 million.

Am I missing anything?

 

 

Also, I forgot about Monster Hunter 3.

superchunk said:

I was saying on a $50 game:

$3 to retailer

$5 to costs related to shipping (and all costs related), materials (and all costs related, incl packaging),  and advertising

$42 somehow split between publisher and developer

Now, I am 95% sure on the retailer part as I when I worked at Circuit City for 8 years we bought items at CC's cost. On games/movies/music/etc it was only a few dollars off if anything of the retail price. That was due to the almost no markup on these items. So I would expect if I got $2 off, then CC probably paid $47 for that $50 item as $1 would be part of their cost for selling the game. Granted I could be off by $1 or $2, but I doubt it.

So, Maybe a max of $5 goes to retailer.

Now for the costs in the $5 I have above, that is on a mass scale item where they are making hundreds of thousands of copies if not millions. We all know they pay <$1 per disc. So include case/manuals/ect is probably $4 for everythign, in the quantities that they get. Then add shipping costs of ~$1 per game. So maybe I was lowballing that figure.

So, maybe a max of $10 goes to manufacturing, shipping, advertising.

That's still leaves $35 easy for publisher and dev.

Currently that means SEGA has netted over $62 million.

So, the OP is about right in his guestimatation that they are about half way to breaking even. Should be doable and that really isn't bad considering the type of game Madworld is, its graphic style, and that its a new IP.

It will be profitable in its lifetime.

How sure are you about those numbers? Because while I admit to lacking firsthand knowledge, they seem really, really low. I can see $3 for a DVD, but for a $50 (let alone $60) game? I dunno, dude, that seems like a recipe for retailer bankruptcy to me.



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Ail on 29 April 2009
superchunk said:
noname2200 said:
superchunk said:
noname2200 said:
superchunk said:
Voltaire said:
Publishers dont gain $25 from a sale. A Gamastruta (?) article said it cost a retailer $54 for a game theyd sell for $60.

True.

As someone who worked in retail for over 10years; games, music, movies, etc have a very small markup. So Sega probably got ~$47 or so per game in gross profit. Net before payment to developer was probably closer to $42. Granted, this last part is pure speculation.

 

You're forgetting other costs though: manufacturing, shipping, duties, royalties, etc.

 

I'm guestimating that ~$5 per game is for those items except royalties as that is part of 'payment to developer'.

 

That doesn't seem to add up, though. You're splitting $18 between the console manufacturer, the retailer, the manufacturer, the shipper, etc. I don't see that as plausible. Forbes, for instance, has the retailer alone averaging a $12 cut, with the console manufacturer taking another $8 bite from that apple. So we're already at $20, before getting to all those other parties.

 

I was saying on a $50 game:

$3 to retailer

$5 to costs related to shipping (and all costs related), materials (and all costs related, incl packaging),  and advertising

$42 somehow split between publisher and developer

Now, I am 95% sure on the retailer part as I when I worked at Circuit City for 8 years we bought items at CC's cost. On games/movies/music/etc it was only a few dollars off if anything of the retail price. That was due to the almost no markup on these items. So I would expect if I got $2 off, then CC probably paid $47 for that $50 item as $1 would be part of their cost for selling the game. Granted I could be off by $1 or $2, but I doubt it.

So, Maybe a max of $5 goes to retailer.

Now for the costs in the $5 I have above, that is on a mass scale item where they are making hundreds of thousands of copies if not millions. We all know they pay <$1 per disc. So include case/manuals/ect is probably $4 for everythign, in the quantities that they get. Then add shipping costs of ~$1 per game. So maybe I was lowballing that figure.

So, maybe a max of $10 goes to manufacturing, shipping, advertising.

That's still leaves $35 easy for publisher and dev.

Currently that means SEGA has netted over $62 million.

So, the OP is about right in his guestimatation that they are about half way to breaking even. Should be doable and that really isn't bad considering the type of game Madworld is, its graphic style, and that its a new IP.

It will be profitable in its lifetime.

 

 

 

You are grossly underestimating the profit retail makes,

At 3$ a game if you add the retailing costs, retail woudn't make a profit.

The latests Gamestop revenue disclosure shows us they make a 21% gross profit on new software.

Which means at most they purchase new games at 39$ a pop.

If you don't believe me here are the actual financial numbers : http://www.gamasutra.com/php-bin/news_index.php?story=23396.

Granted CC hardly sells software so probably has to purchase games for more than Gamestop...

 

You're totally forgetting to include the licencing fees. Nintendo get their cut on every Wii game sale.....

 



PS3-Xbox360 gap : 1.5 millions and going up in PS3 favor !

PS3-Wii gap : 20 millions and going down !