It's true: http://www.gamedaily.com/articles/news/only-four-percent-of-video-games-make-a-profit-ndash-eedar-/?biz=1

The industry is very 'hit-driven'.

did you know what you just wrote is BS

most games that are developed on 1 HD platform need between 300k to 500k to break even (sometimes less for squeals that are using the same engine Gears 2 cost only 10 mil)

and if %80 of the games are just loses then this industry would have crashed years ago.

I found that article to be highly horse-shit probible.

Read the article.  20% of games are profitable, 80% break even OR lose money.

On the 360, the middle 50% of games only sell between 75,000 and 250,000 units.  That is well below your break even numbers.

Why?  EEDAR is well respected, as is Forbes.

Its something which has been claimed by many people for many generations, and there is some truth to it depending on what you measure ...

Most large publishers will release 50 (or more) games across all of the platforms (PC, Console, Handheld, Phone and iPod), and the bulk of their revenue and profit comes from a handful of super successful titles. Not every publisher is caught up in this mindset, but part of the reason so many publishers have reported record revenues and record losses in recent years is because the development cost of new games is so high that their unprofitable games are digging a hole which can't be filled by the handful of super profitable games.

that and the never ending cycle of costly ill advised acquisitions, buying IPs lock stock and barrel and not being able to turn a profit on them. funding projects with never ending development cycles and expecting to gain something from them (Duke im angry with you).

on the plus side if this generation does drag on 2012+   it should reduce that cost with reusable art assets and reused engines, for the life of me i can not figure out why rock* did not license out use of the city it built for other games, they could have built a whole new industry model, the same goes for crackdown, and saints row. 

This is actually related to something I have wondered about for awhile ...

I had built some character models for games like Half-Life and Unreal Tournament back in the day, and I was good enough to be able to model and skin a character in week in my spare time. I mostly stopped doing it because the time it took to create more detailed character models and textures for newer games; moving from a simple 500 polygon model with a 128 by 128 texture, to a 1000+ polygon model with two 192x192 textures simply took too much extra effort and time to do in my spare time. When we hit the previous generation I started to see how much work went into a Gamecube or XBox game, often with 4000+ polygon character models and 4 to 8 texture layers, and I couldn't imagine how any mod team would be able to create anything for (at that time) modern games; and I my wondering was mostly justified, as the thousands of mod teams around the world for games was changed into a couple of dozen teams that focused on a couple of games.

When I went to university I took several graphics courses and one thing I noticed was how every new effect seemed to take another texture layer that was (mostly) hand-crafted to create, and looking at how time-consuming that would be I started to realize how the gaming industry was heading for trouble. The ammount of work that once went into producing an entire mini-campaign by modders was similar to the ammount of work that is required to create one functioning character model in a HD game.

My thought (at the time) was someone (I thought Nintendo) should produce several studios in China, India and South America that were full of hundreds of artists and they should focus on creating viable in-game assets for their game engine; and when they were done they should include the game engine and artistic assets into their licence agreement to encourage every developer to produce games using their toolset. In my opinion (at the time) the beauty of a console manufacturer doing this would be that they could receive their licencing fee regardless of what platform a game was released on, and it would make it dramatically less expensive to release a game on their platform compared to the competition.

The big challenge (as I saw it) was the ammount of content you would need to make it worthwhile for developers (basically 2 "games" worth of content for whatever setting the wanted, and at least a couple of different art styles).

its an interesting idea,

and i know they do some of what your suggesting already, cannibalizing art libraries from earlier in the gen for later gen applications where possible, or on lower rum games. the big move of sharing engines and licensing them is the first step, and there will always be studios that do their own work, however im betting within the next three to 4 years we will see full scale cross licensing of art assets to help keep costs down, the only person this screws are the artists making them, by effectively reducing the work they do and unlike musicians artists were never clever enough to get a royalty system set up to where no matter the future application if something of theirs got used theyd see some kind of residual 

Well with the bad US economic situation the sales decrease seems acceptable.