Why would he not have access to costs? lol.

 He's paid by these companies to do an analsysis of their costs to potential pay-off type ratio thing....

Isn't he paid by a brokerage firm to analyze the companies? He analyzes the market using data from companies like NPD, I'd be surprised if third parties gave him access to their internal figures, as what he does is not supposed to be for their benefit.

Again i'd have to agree with Kowen on this one.

It is interesting that he responded to you though, comedian himself.

CG: Over the years, what sort of success rate have you enjoyed with your predictions regarding the games industry?

MP: The only “predictions” I make that matter are predicting the earnings of the companies I cover. In order to do so, I have to make reasonable guesses about sales, and software sales are driven by console sales. I “predict” a number of different things, but none except earnings matter, and I’m very good at predicting earnings. I have finished as a five star analyst in the Starmine rankings (top 15%, I think) all but one year this decade, and have finished first twice, so I’m doing just fine.

That's from an interview with him (http://www.criticalgamer.co.uk/2009/12/17/michael-pachter-interview/), where I think it's safe to assume the 'companies I cover' refers to various third parties. He's made previous estimates at developement costs, and as the leading video game 'analysist' it's safe to assume he knows his figures.

 I'm not trying to suggest Wii games don't cost less then HD or anything. Just that someone in the position of pachter undoubtedly has these figures avaliable to them, and no doubt knows alot more about how they add up then anyone on here.

Odd that you'd use a quote about earnings but fine, I'm sure he's good at estimating costs. That doesn't mean he has actual access to companies costs to demonstrate that the economies of scale for HD games are outweighing the reduced development cost of Wii games, but more importantly nothing that was mentioned in his post, which is where Procrastinato said he would complile the info from, said anything about costs.

The problem is that the market is fickle. If you get a AAA game that only sells 1 million on an HD console and then comes out with another AAA sequel you can be pretty sure that the sequel will sell well too. This is because the games create a fanbase that consists of a demographic that keep up to date on the gaming world and know to support the developers of their favorite games.

This isn't true for the Wii. The biggest 3rd party sellers are mostly carnival games and you can be pretty sure that the moms that buy those games don't care which company or developer they buy from. Even the critically acclaimed games though aren't for whatever reason building this fan base on the wii. Games that start off low but keep selling due to word of mouth are there but then their sequels come out and instead of starting out with a bang due to an established fan base you get that same extremely slow sales trend. Just look at NMH2's release this week as an example of that. Getting to a million on discounted and bargain bin sales doesn't cut it for these developers.

I was actually referring to the average per-unit revenue he stated, not cost-of-goods/cost-of-development.  I'd have to use "commonplace" averages for those numbers... like the $20M supposed average HD cost, and the "1/3rd of HD" (or whatnot) cost that people like the EA CEO have mentioned in the past.

I can't make an accurate analysis with data from interwebz averages and VGC, obviously.  But there is enough data around to make some good, educated guesses, and discuss the results.

No offense, Demotruk, but I believe there is a lot of "probable fact" to back up my statements.  I will try to put in the time, even though other folks (like TheSource), certainly have more skill (and I would think inclination) to do it.  I understand that my suppositions put the Wii-gamer-who-wants-core-games-on-the-Wii in a bad position, regarding future releases, at least from Western publishers.  I don't mean it as an attack on the Wii (which I adore for the Japanese games), but rather as a serious statement about the "probable" facts behind all the recent publisher outcry about the Wii and their return-on-investments not working out. 

The very fact that several big publishers made these statements lends a lot of credibility to the possibility that it might be the truth, doesn't it?  I know the idea of it sucks, from the Wii gamer perspective.  From the sales and market perspective, however, I think its pretty interesting how the Wii changed the game industry landscape... but mostly only for Nintendo, it seems.  That's more than a footnote in gaming industry history -- its a huge statement... thus its fascinating to me.

To embrace it (the Wii), the 3rd parties need to change some strategies, and that also fascinates me.  That's the future of a large portion of the industry -- although not all of it, or perhaps even a majority of it, I think its safe to say, at this point.

My original point in this thread was just to point out that Wii-third party games do sell well.

That isn't a small thing.

GC Total SW was ~ 208.5m  Nintendo was ~70m of this total

N64 Total SW was ~225m  Depending on how you count third party-partnerships Nintendo was 124m-130m of this total

Basically, what you had for GC/N64 third party markets was the following:

N64: a 20m/year addressable market for third parties over the five years the system sold.

GC: a 27m/year addressable market for third parties over the five years the system sold.

For those two systems, between 1996 and 2006, only 33 third party games topped 1m units worldwide.

For Wii, in less than a third of that time, 50 third party games have topped 1m units worldwide.

Personally, I think the issue is developers haven't made motion-enhanced traditional games that are a) more accessible, and b) more fun. Usually, the publishers nail one or the other when using motion for traditional games. Mario Kart benefited enormously, as did the first Sonic game on Wii from nailing both a and b. Party games, music games and fitness games have benefited the most because they nailed a and b. But to me there is alot of unexplored potential yet in certain fairly big genres/subgenres:

Enhanced/Created on Wii in theory

- Competitive Boxing (Punch Out in some ways isn't really a boxing game, its more about evasion than punching)

- Dancing (Your Shape will do 2-4m)

- Platformers (on NES/SNES/N64 platformers were huge. The ability to "draw" platforms should offer tons of innovation...not much has come yet)

- Mixed Martial Arts/Taibo (Women would buy this - house wives like the fitness genre, girls love DDR - this is a combination)

- Sword Play

- "Real Racing" - If some publisher had the balls, and I have no idea if Wii would recognize this, you could hook up two Wii balance boards to your Wii (have your friend bring his over!), and race to a finish dodging obstacles on the screen by standing on your tippy toes or whatever.

Should be Attempted

- Fighting/Racing/Action RPGs should all work too. Soul Calibur, Street Fighter, Killer Instinct, Mortal Kombat that kind of stuff always did well on the NES, SNES, N64, GC...and most people play Smash using traditional controls. Nintendo fans have always bought fighting games - that audience is there for mainline entries. So there should be a big fighting game base on Wii. Racing games did well on NES and N64, and ok on SNES and GC. Over the top stuff like Crazy Taxi would work. Zelda and Monster Hunter 3 should there is an addressable audience for this type of game.

Avoid:

- Games without local multiplayer or amazing single player. Online is secondary. Wii is magnificient for local multiplayer, probably the best videogame system ever for it, and certainly since the N64 when it had the four player, racing and wrestling games that everyone loved.

- Needless motion control/traditional control. Do your research - figure out which game works best for the genre.

- Games targetted for only one region. You need universal content that is culturally agnostic.

- Content associated with fun only because of its violence or 'dark themes'. Women and kids won't know about it, men who own a Wii won't want it because they aren't interested or can be better served on PS3/X360.

The market for games not enhanced in terms of motion and accessibility is definitely limited relative to the base of the Wii, which is the main reason publishers have trouble with it.

$37 average per Wii game is the likely probable cause of a lot of the third party issues surrounding the platform.

$37 becomes $29.60 once you take out the retailer cut. Though I believe the retailer cut would be larger for titles which linger on the shelves like Wii games tend to, front loaded games tend to have a lower margin for retailers.

$29.60 becomes $23-24.60 once you take out Nintendos cut.

$23-24.60 becomes $20-21.60 once you take out cost of manufacturing.

$20-21.60 becomes $19-20.60 once the distributor takes his cut.

It doesn't really stop there either. You have to consider any licence costs for any familiar characters. You have to consider marketing, development and 'market development' costs to keep your game on the shelf to actually sell and to muscle aside those other titles for top billing. Furthermore its more expensive to keep a game on the market which is selling slowly on a week by week basis, legs are no substitute for frontloaded releases but better than nothing.

Go get em TheSource !