jammy2211 said:
Grimes said:
darthdevidem01 said:
so some people say S-E gets 50% of the cut from retailers, some are saying they get 90%
some are saying 80 million is too much for development, some say 30 - 40 million is the right amount
some are saying only 10 million is too less for advertising, some are saying the advertising can cost upto 60 - 70 million in Japan alone
some are saying its obviously made a profit in its first week, if it didn't something is seriously, while others say its nowhere near a profit
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I am not going to change the OP with new figures or calculations as everyone is saying different things & we haven't come to a clear conclusion |
Retailers can't survive on a 10% margin for games. So whoever told you 90% is making up numbers.
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In the USA a game $60 will be sold to retailers for $48 (Source is from Invisible Walls + some googling will bring it up). Can be lower then $48 if the company buy alot of copies or in exchange for 'priority' shelf space. So that's a 20% margin right there, although Japan could no doubt be different.
It's iffy how discounting games work, but I assume if a retail orders 100000 copies of a game and it bombs, they've got some protection so they don't have to sell all those $48 games at $20.
The used game market is where they make their money. |
The US has the worst retailer margin in the gaming industry. The quoted US margin is correct- 80% is the norm here. However, there are clear signs that it can not be this high outside the US, with new games dropping in price far too quickly. Monster Hunter Tri had the standalone price slashed by as much as half toward the end of its first week of being released. On a brand new title, Capcom would not have authorized a huge discounting giving up almost all the full price sales, lest they be doomed to needing to sell multi-millions to break even. A retailer would sooner return a game to the distributor than sell it at a huge loss. It may have been sold at a very slight loss to negate the paperwork costs of returning it, but they are not going to take a large hit per unit.
In Europe, seeing games in preorder with sharp discounts, especially popular games, is not unusual. And, like the MHTri case in Japan, games drop in price far too quickly for developers and publishers to make money on full-price sales. This is, unless, "full price" has a better margin for the retailer. This better margin may also explain the higher prices that are paid in both areas versus the US retails.
However, in the US, notice that for the most part, games are almost always near MSRP. Amazon seems to average about 5% off, giving the best average prices barring special deals. And the "deals" in the US will almost always fall under 1 of 2 categories- the retailer is taking a loss to try to drive store traffic on the hopes that you will buy something else. Widespread deals usually fall into this category. (Note that the best deal at TRU, the B2G1 offers, are at best 33% off. And not everyone will max/min their savings, reducing their loss. A $60/60/30 deal actually is break even.) The other one is when you see "select games" on sale. This is usually a deal worked out with the distributor to offer a lower wholesale in exchange for something else. Something else may, of course, vary wildly, from not returning the games, to guaranteeing a minimum number of non-returnable sales, to maybe even the distributor initiating the deal to clear out their warehouse! Occasionally, though rarely, you will see a combination of the 2- negotiating with as many distributors as possible for a large sale. The distributors that don't participate may see that retailer holding back some stock of their games, to reduce losses from full-priced wholesales.
Yes, there are a lot of unknown numbers. I actually try to keep track of as many numbers as I can, since there's a bit of a businessperson in me who likes crunching these things. Likewise, advertising gets expensive quick! Unfortunately, I only have a few US numbers for this. Super Bowl commercial rates are publically shared, but other blockbuster shows can still command almost $1m for a 30-second timeslot. Whereas in the middle of the night, rates are much cheaper. I've heard (but not been able to confirm) that ad blocks on Cartoon Network around midnight are in the realm of $50-100k, and lesser-watched things even later at night on other channels can go as cheap as $10-20k. But I don't see FF13 having $50-70m worth of advertising done. I'd believe $30-40m, and suspect about $20m, but as I wasn't in Japan, I can't say for certain that I've seen all the advertising done.
