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Forums - Gaming - So, Final Fantasy 13 will have cost $100+ million to make?

Slimebeast said:
JEDE3 said:
"Can you state any sort of source of give us any credibility as to why you're right and our figures our wrong. I've no interest in ebing right or wrong here - my numbers come from an online video game blog - I just want to get the numbers and figures right for my own interests and am happy to listen to you, but so far you've not given me a reason why your figures are legit."

Check his post history. I think you'll get a good idea where he gets his figures from. I mean... he said rule of thumb for advertising a game is to take half of the development cost.


Not advertising, but marketing as a whole, dummy (including the developers flying around all over the world on game shows, giving interviews etc, sending promo material to magazines, websites, making trailers, TV, magazine, web site ads etc). Half was overexaggerating, but it's still a better 'rule of thumb' for simplicity in comparison to the false misconceptions that flow around on these forums. In Halo 3's case the marketing actually cost a lot more than the development of the game.

I dont know, maybe 30-35% is a better rule of thumb. How should I know, these numbers arent official. But we have to assume something, everyone does that. And you are not very constructive, you just mock and laugh while contributing nothing. But I dont see you protesting when the others suggested $5 millon and other laughable figures for big games like Motorstorm, Uncharted and Resistance.

 I don't believe you can pin a rule of thumb on marketing costs - Sven of Capcomunity said it was 10-20% I think (Someone correct me if I have forgotten) but in all honestly a games marketing budget will reflect the game. Further a publisher will not use developement costs as an indication of marketing budget- they'll use expected revenue generated. If your 50% figure was correct then DS games like the Imagine series wouldn't have sold at all - they're a fine example of the marketing being far above developement costs.

 It's a good rule of thumb for high-budget HD games, but there are many other gaming models which it doesn't apply to. Even the Wii market is seeing marketing costs excell ahead of developement costs now.



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jammy2211 said:
Slimebeast said:
jammy2211 said:
Slimebeast said:
JEDE3 said:
You are saying it's better to use customer sales as an indication of what the retailer pays while you don't take sales that the retailer are doing and bargin bins on games that flop into consideration.... then you call yourself the king? Lol.


For this thread it's better to use common sense.

It's mathematically impossible that retailers pay $48 if consumers are paying less than $50 for their PS360 games.

I know very well the retailer figures, but the error the sources do is to reveal only the most costly examples (like "we had to pay $52 for a GTA game once!", thereby not giving a proper representation of reality.

 Can you state any sort of source of give us any credibility as to why you're right and our figures our wrong. I've no interest in ebing right or wrong here - my numbers come from an online video game blog - I just want to get the numbers and figures right for my own interests and am happy to listen to you, but so far you've not given me a reason why your figures are legit.

 Just to add, I work in the UK video games press and have a good idea how the UK retail industry works. It's very possible that how the UK market works is completely different to America and by comparing the two I'm completely going the wrong route. I've yet to have someone tell me who knows better, and can claim to though.

 $48 is a very nice average, and I think is the right figure for most games first shipment. End of the day retailers choose how much of a game they order and they're very good at knowing how much a game will sell and how much to order.

 Random Fact; I don't know if this applies to the USA market (I'm positive it does), but you know those video game charts you see in Gamespot? The 'top 20' games? They're not in order of the best sellers. Hell no, publishers pay to get those slots. Same with the Music retail industry, DVD industry etc.

I've figured it all out through blog/forum comments like these: http://www.cheapassgamer.com/forums/archive/index.php/t-526.html

And some magazine sources in print.

Well, that's your answer in green. If the game is a $60 game, the first shipment for small retail stores is $48 on average.

- But what about the returns? The special deals when a game underperforms and is over-shipped, a retailer can get a rebate on a future shipment as a compensation, this will bring down the average.

- If first shipment is let's say 60% of a game's lifetime sales on average @$48, but the other shipments are 40% at $40, the average lifetime sales price drops by $3.

- big retail chains and the biggest online stores get cheaper wholesale prices, it's always like that with other wares (electronics and everything). For obvious reasons (negotiation power etc). They say Walmart is 30% of US gaming market (according to the NPD threads here on VGC). Add Bestbuy and Amazon + more online retail and it plays a big role in bringing down the average price further with a few $.

- The following is not affecting FF13, but when speaking of games on average: not all PS360 games are $60. Some cost $50 as new.

So I believe $48 is the typical default list price from wholesale distributor, if the retailer has no special deals. But we're not discussing list price here, we're trying to deduct the average revenue from each copy sold over a lifetime when figuring out if a game breaks even.

My side note: people on this site even ignore bundled copies - they'll calculate Uncharted as 2.5 million x $35 and believe the game made huge profit, ignoring the fact that Sony/Naught dog didn't get a dime from the 1 million copies that were bundled with a PS3 console. 

 Well everything here sounds in-line with what I'd suggest for the UK market and adds up right. I don't think we've disagreed on anything so it's nice to see we both are right ;).

 Perhaps where there was some discrepency is you're trying to broadcast figures, as you say, that don't apply to a game like FFXIII when this thread is about FFXIII. I mean this more beyond then just beyond the games retail price - Publishers know when they're game will make big bucks for a retail just as first hand sales, and they'll squeeze every penny (cent? :P) out of the retail market for what it's worth. You can bet Take 2 made more then $48 (neglecting costs) off of every GTAIV sale, same with Konami and MGS, Capcom and Resdient Evil etc. I'd assume this was more a negotiation on the sort of marketing / store placement issues I addressed earlier.


Ok, cool.

I'll admit that I didn't account for the fact that super games like FF13 will squeeze a few extra dollars from each copy.

Still, $48 sounds very much to me, at least on average lifetime since there's usually a platinum edition or something like that, which will be counted and cited as a games lifetime sales on this site.

Let's assume MGS4 will have 4.8 million copies sold 'lifetime' (say a year from now) - I dont like that people will assume it's $48 if that sales number includes a few hundred thousand bundled copies, and a few hundred thousand platinum version sales (in addition to the possible cheaper than $48 late shipments).

Oblivion, my favorite game: it's at 4.6 million copies PS360 right now on VGC databse (ioi hasnt updated it's Euro numbers), but I know lots of them are the cheaper GOTY version etc (last week the game sold 18,000 copies in the USA alone, according to VGC). Now, I don't want to fool myself and lie to myself and have the false impression that Oblivion made $35 x 4.6 million = $161 million in revenue (as the majority on this site would calculate it). More realistic IMO is 4.6 million x $25 = $115 million, and the difference is very significant.

 



Might take the crown as "most expensive game ever" away from GTA 4.



jammy2211 said:
Slimebeast said:
JEDE3 said:
"Can you state any sort of source of give us any credibility as to why you're right and our figures our wrong. I've no interest in ebing right or wrong here - my numbers come from an online video game blog - I just want to get the numbers and figures right for my own interests and am happy to listen to you, but so far you've not given me a reason why your figures are legit."

Check his post history. I think you'll get a good idea where he gets his figures from. I mean... he said rule of thumb for advertising a game is to take half of the development cost.


Not advertising, but marketing as a whole, dummy (including the developers flying around all over the world on game shows, giving interviews etc, sending promo material to magazines, websites, making trailers, TV, magazine, web site ads etc). Half was overexaggerating, but it's still a better 'rule of thumb' for simplicity in comparison to the false misconceptions that flow around on these forums. In Halo 3's case the marketing actually cost a lot more than the development of the game.

I dont know, maybe 30-35% is a better rule of thumb. How should I know, these numbers arent official. But we have to assume something, everyone does that. And you are not very constructive, you just mock and laugh while contributing nothing. But I dont see you protesting when the others suggested $5 millon and other laughable figures for big games like Motorstorm, Uncharted and Resistance.

 I don't believe you can pin a rule of thumb on marketing costs - Sven of Capcomunity said it was 10-20% I think (Someone correct me if I have forgotten) but in all honestly a games marketing budget will reflect the game. Further a publisher will not use developement costs as an indication of marketing budget- they'll use expected revenue generated. If your 50% figure was correct then DS games like the Imagine series wouldn't have sold at all - they're a fine example of the marketing being far above developement costs.

 It's a good rule of thumb for high-budget HD games, but there are many other gaming models which it doesn't apply to. Even the Wii market is seeing marketing costs excell ahead of developement costs now.

I agree. Generally I object to rules of thumb, but they're popular among the people. Two I hate are "a HD game needs to sell 260,000 copies to break even" and "A HD game costs $10 million to develop", although the more correct individuals add the word 'average' in there.

So in the same way it's misleading to cite a specific % number of marketing budget which varies almost as much as the dev budget of HD games.

(and yes of course I agree with "a publisher will not use developement costs as an indication of marketing budget", because naturally the sales potential of the final product not always reflects the total costs of creating it, hence why Halo 3 had insane marketing budget)

But who is Sven of Capcomunity and which kind of games did he mean? All Capcom games?



And FF XIII budget discussion became less than a memory in people mind.



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Slimebeast said:
jammy2211 said:
Slimebeast said:
jammy2211 said:
Slimebeast said:
JEDE3 said:
You are saying it's better to use customer sales as an indication of what the retailer pays while you don't take sales that the retailer are doing and bargin bins on games that flop into consideration.... then you call yourself the king? Lol.


For this thread it's better to use common sense.

It's mathematically impossible that retailers pay $48 if consumers are paying less than $50 for their PS360 games.

I know very well the retailer figures, but the error the sources do is to reveal only the most costly examples (like "we had to pay $52 for a GTA game once!", thereby not giving a proper representation of reality.

 Can you state any sort of source of give us any credibility as to why you're right and our figures our wrong. I've no interest in ebing right or wrong here - my numbers come from an online video game blog - I just want to get the numbers and figures right for my own interests and am happy to listen to you, but so far you've not given me a reason why your figures are legit.

 Just to add, I work in the UK video games press and have a good idea how the UK retail industry works. It's very possible that how the UK market works is completely different to America and by comparing the two I'm completely going the wrong route. I've yet to have someone tell me who knows better, and can claim to though.

 $48 is a very nice average, and I think is the right figure for most games first shipment. End of the day retailers choose how much of a game they order and they're very good at knowing how much a game will sell and how much to order.

 Random Fact; I don't know if this applies to the USA market (I'm positive it does), but you know those video game charts you see in Gamespot? The 'top 20' games? They're not in order of the best sellers. Hell no, publishers pay to get those slots. Same with the Music retail industry, DVD industry etc.

I've figured it all out through blog/forum comments like these: http://www.cheapassgamer.com/forums/archive/index.php/t-526.html

And some magazine sources in print.

Well, that's your answer in green. If the game is a $60 game, the first shipment for small retail stores is $48 on average.

- But what about the returns? The special deals when a game underperforms and is over-shipped, a retailer can get a rebate on a future shipment as a compensation, this will bring down the average.

- If first shipment is let's say 60% of a game's lifetime sales on average @$48, but the other shipments are 40% at $40, the average lifetime sales price drops by $3.

- big retail chains and the biggest online stores get cheaper wholesale prices, it's always like that with other wares (electronics and everything). For obvious reasons (negotiation power etc). They say Walmart is 30% of US gaming market (according to the NPD threads here on VGC). Add Bestbuy and Amazon + more online retail and it plays a big role in bringing down the average price further with a few $.

- The following is not affecting FF13, but when speaking of games on average: not all PS360 games are $60. Some cost $50 as new.

So I believe $48 is the typical default list price from wholesale distributor, if the retailer has no special deals. But we're not discussing list price here, we're trying to deduct the average revenue from each copy sold over a lifetime when figuring out if a game breaks even.

My side note: people on this site even ignore bundled copies - they'll calculate Uncharted as 2.5 million x $35 and believe the game made huge profit, ignoring the fact that Sony/Naught dog didn't get a dime from the 1 million copies that were bundled with a PS3 console. 

 Well everything here sounds in-line with what I'd suggest for the UK market and adds up right. I don't think we've disagreed on anything so it's nice to see we both are right ;).

 Perhaps where there was some discrepency is you're trying to broadcast figures, as you say, that don't apply to a game like FFXIII when this thread is about FFXIII. I mean this more beyond then just beyond the games retail price - Publishers know when they're game will make big bucks for a retail just as first hand sales, and they'll squeeze every penny (cent? :P) out of the retail market for what it's worth. You can bet Take 2 made more then $48 (neglecting costs) off of every GTAIV sale, same with Konami and MGS, Capcom and Resdient Evil etc. I'd assume this was more a negotiation on the sort of marketing / store placement issues I addressed earlier.


Ok, cool.

I'll admit that I didn't account for the fact that super games like FF13 will squeeze a few extra dollars from each copy.

Still, $48 sounds very much to me, at least on average lifetime since there's usually a platinum edition or something like that, which will be counted and cited as a games lifetime sales on this site.

Let's assume MGS4 will have 4.8 million copies sold 'lifetime' (say a year from now) - I dont like that people will assume it's $48 if that sales number includes a few hundred thousand bundled copies, and a few hundred thousand platinum version sales (in addition to the possible cheaper than $48 late shipments).

Oblivion, my favorite game: it's at 4.6 million copies PS360 right now on VGC databse (ioi hasnt updated it's Euro numbers), but I know lots of them are the cheaper GOTY version etc (last week the game sold 18,000 copies in the USA alone, according to VGC). Now, I don't want to fool myself and lie to myself and have the false impression that Oblivion made $35 x 4.6 million = $161 million in revenue (as the majority on this site would calculate it). More realistic IMO is 4.6 million x $25 = $115 million, and the difference is very significant.

 

 I'd say specifically for FFXIII (And any, as you put it. 'super title') that $35 is a fair average, if not too low. This is more cause of limited editions though - which cost peanuts to make 'extra' but pretty much bring in an extra $10 of so per copy sold to the publisher - You can bet FFXIII will have one and it'll sell very well, as is the nature of the FF fanbase. Same applies with MGS to me - sure they lose revenue from the sales of 'platinum' but they made extra off of the tin edition or whatever it was.

It should also be noted in your $25 vs $35 dollar example that publishers to generate a greater revenue (In Dollar terms) off of Japanese and European sales then American sales, so I'd say $35 is a fairer figure for a game which sold strong worldwide.

 It's nice to find someone who actually has a clue about this sort of thing though, seems we're on the same level with most things but obvious there are minor niggles worth debating :P.

 



Slimebeast said:
jammy2211 said:
Slimebeast said:
JEDE3 said:
"Can you state any sort of source of give us any credibility as to why you're right and our figures our wrong. I've no interest in ebing right or wrong here - my numbers come from an online video game blog - I just want to get the numbers and figures right for my own interests and am happy to listen to you, but so far you've not given me a reason why your figures are legit."

Check his post history. I think you'll get a good idea where he gets his figures from. I mean... he said rule of thumb for advertising a game is to take half of the development cost.


Not advertising, but marketing as a whole, dummy (including the developers flying around all over the world on game shows, giving interviews etc, sending promo material to magazines, websites, making trailers, TV, magazine, web site ads etc). Half was overexaggerating, but it's still a better 'rule of thumb' for simplicity in comparison to the false misconceptions that flow around on these forums. In Halo 3's case the marketing actually cost a lot more than the development of the game.

I dont know, maybe 30-35% is a better rule of thumb. How should I know, these numbers arent official. But we have to assume something, everyone does that. And you are not very constructive, you just mock and laugh while contributing nothing. But I dont see you protesting when the others suggested $5 millon and other laughable figures for big games like Motorstorm, Uncharted and Resistance.

 I don't believe you can pin a rule of thumb on marketing costs - Sven of Capcomunity said it was 10-20% I think (Someone correct me if I have forgotten) but in all honestly a games marketing budget will reflect the game. Further a publisher will not use developement costs as an indication of marketing budget- they'll use expected revenue generated. If your 50% figure was correct then DS games like the Imagine series wouldn't have sold at all - they're a fine example of the marketing being far above developement costs.

 It's a good rule of thumb for high-budget HD games, but there are many other gaming models which it doesn't apply to. Even the Wii market is seeing marketing costs excell ahead of developement costs now.

I agree. Generally I object to rules of thumb, but they're popular among the people. Two I hate are "a HD game needs to sell 260,000 copies to break even" and "A HD game costs $10 million to develop", although the more correct individuals add the word 'average' in there.

So in the same way it's misleading to cite a specific % number of marketing budget which varies almost as much as the dev budget of HD games.

(and yes of course I agree with "a publisher will not use developement costs as an indication of marketing budget", because naturally the sales potential of the final product not always reflects the total costs of creating it, hence why Halo 3 had insane marketing budget)

But who is Sven of Capcomunity and which kind of games did he mean? All Capcom games?

 Sven works for Capcom (I forgot his title) but he obviously has a good knowledge of sales figures and this sort of thing. his particual rant was aimed at someone talking about Zack and Wiki's lack of profit (after he said the game made a loss) but he threw out the 12%-20% marketing budget based on projected revenue. We're going back to early Janurary here so my memory is sketchy.

 Trying to put an average on marketing budgets to me is pointless, I'm positive EA spend more on marketing their sports games then making them for instance. It really should be taken as a case by case example.



you are making me drool, 100$ million? it's going be hot xD



I think they will break even day one. After that, profit!



Doesn't really matter, all FF XIII has to do is sell 5-6 million copies, and its going to do that alone on the PS3



 

mM