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Forums - Microsoft - Development Costs and Royalties on PS3 and 360

mrstickball said:
....But for a million selling software title, that's millions of dollars.

I know Nintendo has always had better documentation software, but when your talking 500,000+ units of sales, $10 or more is very inhibitive.

Well, there are several things to consider ...

Many (if not most) games produced for a platform from large publishers do not pay the full licencing costs; I don't know the exact details but it was rumored that Resident Evil 0, 1 and 4 were made for the Gamecube because Nintendo and Capcom traded IPs (Capcom made GBA Zeldas), did joint marketing on the titles, and Nintendo reduced their licencing fees for all Capcom games.

You also have to consider that some companies will consider "free middleware" as a form of hedging. Modern development teams can spend $1 Million (or more) on licencing of middleware to "create their engine" or hook into an engine they already licenced (The reason "create their engine" is that most modern custom engines are still based on a collection of libraries and other middleware and are rarely built from the ground up). In the case of a game which sold 250,000 copies or less you're better off paying $4 per title rather than spending $1 Million on middleware; you have effectively hedged your risks which is important.



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Rhonin the wizard said:
mrstickball said:
I don't get it though - how the heck can Nintendo manage to charge a $10 royalty to developers per disk? Thats just stupid. Nintendo is far greedier than MS or Sony in that regards - atleast MS and Sony are making the games more expensive to offset their costs.
Where does it say how much Nintendo is charging?

 It is very sad that mrstickball is quouting a $10 royalty fee that he is making up.



Dodece said:
The PS3 has a far lower profit margin for developers.

Sony is making money off of Blu Ray manufacture in the same way that Nintendo did.

Many developers live on marginal profits, and did so the last generation. Can they even survive developing for the PS3?



1. The PS3 has an install base of only 4.6 million, it will take time for that to rise - but it will rise, and make it a lot easier for developers to thrive.

2. BluRay is an open standard shared by a bunch of companies, Sony does not charge big bucks for use of the format. DVD worked the same way - we're talking small fees, not huge costs.  Most developers would rather pay some pennies and have more storage space.

3. Developers can develop interesting, quirky games as PS3 downloads, and cut out the costs of retail distribution entirely.