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

Squilliam on 07 August 2009
Slimebeast said:
Squilliam said:

The realities of a really big game published/developed by the same company are staggering, in a positive way on HD consoles compared to the Wii and compared to lesser selling HD games.

1. Retailers actually pay more for a game in higher demand, it wouldn't surprise me if they paid $50 or even $52 for each title. Remember most of the copies will be gone the first day for a highly anticipated release. Its easy money for a lot of retailers and very efficient.

2. Console royalties? I would be surprised if it didn't average out to be $5 or less for this title. Not only do the royalty rates go down the more copies shipped, they also go down for highly anticipated titles.

3. Shipping? When you're shipping a two boxes with 60 copies each to a retail store, how much does that come to per title?

4. Advertising? Microsoft and Sony will add their own advertising to the mix. Its also averaged over the massive retail sales.

5. Packaging/Market development? Retailers will give them the best shelves and packaging costs are cheap since hundreds of millions of game/dvd cases are made every year.

6. Special editions? Extra money!

So in all I wouldn't be surprised if they didn't pull in an average of $45 in the hand after all charges, taking into account the LTD edition sales with marketing costs applied against the total number of games shipped rather than per individual title.

 

Yeah right. Impossible. That all sounds nice and all with your numbered 1-6 list, but how do you explain that the publishers have so low profits?

I have heard no one even try to explain this. People are just fantasizing numbers here.

SQnix can be easily compared to Take Two, who has GTA4 as their mega game, selling +10 million. The same principle should be there - if FF can get $45 then GTA should be too. But we all know Take Two has been losing money for years. Not even the GTA release quarters are profitable - despite people claiming publishers rake in $40-45 per copy from the first shipment.  

SquareEnix has low profit margins as well.

Easy: Its not the games you hear about which kill a publisher, its the games you don't. Whether they sell poorly, don't show up on peoples radar or are cancelled before release. EA Had R+D of 1.3B last year, purely software development costs for example. You can't look at the games which people like to point out as profitable, you have to look at the big picture.



Tease.

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Slimebeast on 07 August 2009
Squilliam said:
Slimebeast said:
Squilliam said:

The realities of a really big game published/developed by the same company are staggering, in a positive way on HD consoles compared to the Wii and compared to lesser selling HD games.

1. Retailers actually pay more for a game in higher demand, it wouldn't surprise me if they paid $50 or even $52 for each title. Remember most of the copies will be gone the first day for a highly anticipated release. Its easy money for a lot of retailers and very efficient.

2. Console royalties? I would be surprised if it didn't average out to be $5 or less for this title. Not only do the royalty rates go down the more copies shipped, they also go down for highly anticipated titles.

3. Shipping? When you're shipping a two boxes with 60 copies each to a retail store, how much does that come to per title?

4. Advertising? Microsoft and Sony will add their own advertising to the mix. Its also averaged over the massive retail sales.

5. Packaging/Market development? Retailers will give them the best shelves and packaging costs are cheap since hundreds of millions of game/dvd cases are made every year.

6. Special editions? Extra money!

So in all I wouldn't be surprised if they didn't pull in an average of $45 in the hand after all charges, taking into account the LTD edition sales with marketing costs applied against the total number of games shipped rather than per individual title.

 

Yeah right. Impossible. That all sounds nice and all with your numbered 1-6 list, but how do you explain that the publishers have so low profits?

I have heard no one even try to explain this. People are just fantasizing numbers here.

SQnix can be easily compared to Take Two, who has GTA4 as their mega game, selling +10 million. The same principle should be there - if FF can get $45 then GTA should be too. But we all know Take Two has been losing money for years. Not even the GTA release quarters are profitable - despite people claiming publishers rake in $40-45 per copy from the first shipment.  

SquareEnix has low profit margins as well.

Easy: Its not the games you hear about which kill a publisher, its the games you don't. Whether they sell poorly, don't show up on peoples radar or are cancelled before release. EA Had R+D of 1.3B last year, purely software development costs for example. You can't look at the games which people like to point out as profitable, you have to look at the big picture.

Good argument, if it was true.

Look at the quarterly reports, they dont have the kind of huge variation they should if all of a sudden a 1st month 5 million selling game for $45 per copy was included. It should be reflected not just as a big revenue increase but mainly as a gigantic quarterly profit spike, but it isn't.



SaviorX on 07 August 2009

The blockbusters Squilliam is speaking of don't even come that often. There are only several killer apps which actually work in such a manner.

The overwhelming majority of companies who have been operating this way have still been posting losses. It sounds like it works, but the execution so far has not been working to a profit.

I'm not trying to be rude, but Squill is trying too hard to make HD development sound like a jolly ol' endeavor, when it is really bleeding red ink for many companies.



Leatherhat on July 6th, 2012 3pm. Vita sales:"3 mil for COD 2 mil for AC. Maybe more. "  thehusbo on July 6th, 2012 5pm. Vita sales:"5 mil for COD 2.2 mil for AC."

Squilliam on 08 August 2009
Slimebeast said:
Squilliam said:

Easy: Its not the games you hear about which kill a publisher, its the games you don't. Whether they sell poorly, don't show up on peoples radar or are cancelled before release. EA Had R+D of 1.3B last year, purely software development costs for example. You can't look at the games which people like to point out as profitable, you have to look at the big picture.

Good argument, if it was true.

Look at the quarterly reports, they dont have the kind of huge variation they should if all of a sudden a 1st month 5 million selling game for $45 per copy was included. It should be reflected not just as a big revenue increase but mainly as a gigantic quarterly profit spike, but it isn't.

How many first month, 5M selling games have there been? Also relative to the total revenue even 5M sales are actually quite small when you have multiple million selling games coming out at the same time. In the case of Halo 3 there was a very obvious spike in revenue for Microsoft for example, but even then next to a division which has over 7B in revenue per year its pretty small in comparison.

@SaviorX: Im not saying that HD games are a walk in the park, im saying that the blockbuster games which sell quickly make a LOT of money for the publisher. Whether it makes up for the other costs they have is another thing entirely.



Tease.

invetedlotus123 on 08 August 2009
Squilliam said:
Slimebeast said:
Squilliam said:

Easy: Its not the games you hear about which kill a publisher, its the games you don't. Whether they sell poorly, don't show up on peoples radar or are cancelled before release. EA Had R+D of 1.3B last year, purely software development costs for example. You can't look at the games which people like to point out as profitable, you have to look at the big picture.

Good argument, if it was true.

Look at the quarterly reports, they dont have the kind of huge variation they should if all of a sudden a 1st month 5 million selling game for $45 per copy was included. It should be reflected not just as a big revenue increase but mainly as a gigantic quarterly profit spike, but it isn't.

How many first month, 5M selling games have there been? Also relative to the total revenue even 5M sales are actually quite small when you have multiple million selling games coming out at the same time. In the case of Halo 3 there was a very obvious spike in revenue for Microsoft for example, but even then next to a division which has over 7B in revenue per year its pretty small in comparison.

@SaviorX: Im not saying that HD games are a walk in the park, im saying that the blockbuster games which sell quickly make a LOT of money for the publisher. Whether it makes up for the other costs they have is another thing entirely.

Well, this is why I think S-E wants so hard to enter in the MMORPG world, they can't release a KH, FF or DQ every year and just can't have losses normal years and have huge numbers when they release their main franchises. With MMORPG like FFIX and the Final Fantasy XIV they'll have some millions guaranteed every year, look at what WoW made to Blizzard, i sure i don't expect FFXIV to be like Wow, but sure it can reach 2 million active accounts in the apice. 



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Slimebeast on 08 August 2009
Squilliam said:
Slimebeast said:
Squilliam said:

Easy: Its not the games you hear about which kill a publisher, its the games you don't. Whether they sell poorly, don't show up on peoples radar or are cancelled before release. EA Had R+D of 1.3B last year, purely software development costs for example. You can't look at the games which people like to point out as profitable, you have to look at the big picture.

Good argument, if it was true.

Look at the quarterly reports, they dont have the kind of huge variation they should if all of a sudden a 1st month 5 million selling game for $45 per copy was included. It should be reflected not just as a big revenue increase but mainly as a gigantic quarterly profit spike, but it isn't.

How many first month, 5M selling games have there been? Also relative to the total revenue even 5M sales are actually quite small when you have multiple million selling games coming out at the same time. In the case of Halo 3 there was a very obvious spike in revenue for Microsoft for example, but even then next to a division which has over 7B in revenue per year its pretty small in comparison.

 


lol, you had to take MS as an example didn't you? A one-game revenue spike would be hard to detect in a MS quarterly report because their overall revenue even in the Entertainment division is so huge.

You'd have to study a report from a publisher with gaming software revenue only, or at least from a publisher who presents each business segment clearly separate and with transparent revenue figures. Like Ubisoft (Assassin's Creed), Take-Two (GTA4), Konami (MGS4), Capcom (RE5) and possibly Activision (CoD5).

 



outlawauron on 08 August 2009
Xoj said:
square enix doesn't do special editions the game when it hits its english version it's complete. no DLC no nothing.
they do international version with the english voices for japan, and a few new sidequests.

They did one with FFXII.



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Zezlar on 08 August 2009

We will see, SE will definitely not break the bank over this anyways. FF13 will be a multiple million seller no doubt. Most FF games sell 5M+. They got the riches from FFXI+FFXIV next year, and all that damn money they just made from DQIX. Not counting all the other games they will be selling.