Article : Only 30% of games even break even!

[Shifty Geezer]

According to Chris Deering, Edinburgh Interactive Festival and former SCEE guy, not even three in ten games recover their costs.

"My guess and analysis shows that less than 3 out of 10 games recover their development and marketing costs with boxed goods sales," said Deering.

That's pretty shocking. He doesn't specify the scope of these figures, annoyingly, but if the major publishers are experiencing those sorts of lacklustre results, it raises plenty of questions.

 

[assen]

Let them lazy developer bastards starve for not providing real 720p, uncompressed audio, PS3 version parity, Wii versions, and same-day localization in 25 European languages

 

[JPT]

Let them lazy developer bastards starve for not providing real 720p, uncompressed audio, PS3 version parity, Wii versions, and same-day localization in 25 European languages

Here here ;-)

 

[jandlecack]

That's cause only 30% of games are really good games.

Why support and buy the shitty ones?

 

[obonicus]

Was this any different last-gen? Does it apply to all gaming systems, or only the HD ones?

 

[I.S.T.]

That's the screwed up part of the game industry, IMO. A lot of perfectly good games don't make any money because of this.

 

[Cornsnake]

As always being original is reason why some great games have poor sales. And bad games that tie in with popular movies usually sell very well. So less originality is the way forward.

 

[Richard]

That's not much to go on from the article. I'd be interested in knowing what kind of guessing he is doing and what analysis he has done to reach that number. Is this console and PC games? Did he collate all the financial figures from all the publishers to come up with that 3/10 figure? Do publishers even diferentiate from retail and cloud sales? What is the minimum game budget he is including in his sample?

Like I said, the article doesn't say much except put forth some proph... sorry, predictions of what might happen when it's too far out anyone will remember this in case it turns out to be wrong.

 

[Shifty Geezer]

Here's the rub, then. Most of the games publishers are financing (does this include a bucket-load of small-scale PC boxed titles) are a waste of money. 70% of the game producing industry is dead weight. How that 30% is distributed, and how it's decided, determines the realities of most games producers. If games aren't selling because they're derivative titles, this is a message to the publishers to be more creative. If the successful titles are all derivative genre-clones, this is warning to the publishers to avoid innovation. If the financially successful titles are a mix, it goes to show publishers have no idea what will sell and what won't, and they'll just fund projects willy-nilly hoping this one will be a winner.

If every studio produces numerous titles per console, with a couple of low-sellers to a high seller, and that high seller is profitable enough to carry the financial flops, then I guess this truth about high failure is just the way things are and will remain. If studios are always successful, breaking even or being profitable, the average for other studios is even worse, and it sounds like half the industry could basically be sacked and the industry would be more profitable as a result .

Is this the case? Are most titles not worth the investment, losing the publishers money, and the developers should be chucked out on their ears? How much are the developers' efforts being wasted on stuff that won't sell because of publisher actions? How much does responsibility of financial failure rest with the publishers and how much with the developers?

 

[archangelmorph]

According to Chris Deering, Edinburgh Interactive Festival and former SCEE guy, not even three in ten games recover their costs.


That's pretty shocking. He doesn't specify the scope of these figures, annoyingly, but if the major publishers are experiencing those sorts of lacklustre results, it raises plenty of questions.

Sounds like bollocks to me..

 

[whome0]

Videogame business is finally like a movie business. Ask any Hollywood studio about the break-even movie productions and ratio could well be at 20/80 rule. We might as well apply it to a videogames.

 

[jandlecack]

I suggest you take a look at what could be considered to be highly rated games and correlate their sales. "Quality" and sales rarely have anything to do with one another; your argument is fallacious.

I disagree except we are talking about shitty games that sell well such as Cooking Mama and that sort of calibre.

When I look at good actual _games_ I see BioShock, MGS4, Mass Effect, Halo, Uncharted, Motorstorm all of which, I believe, have exceeded 1 million sales, some by far (MGS4 4 million, Halo 3 I think 7 million, BioShock around 3 million).

Don't quote me on exact figures but I think good games like those always produce profit, else we wouldn't keep seeing them.

 

[obonicus]

I disagree except we are talking about shitty games that sell well such as Cooking Mama and that sort of calibre.

When I look at good actual _games_ I see BioShock, MGS4, Mass Effect, Halo, Uncharted, Motorstorm all of which, I believe, have exceeded 1 million sales, some by far (MGS4 4 million, Halo 3 I think 7 million, BioShock around 3 million).

Don't quote me on exact figures but I think good games like those always produce profit, else we wouldn't keep seeing them.

On the other hand we have Beyond Good and Evil, Okami (or almost anything made by Clover) among others.

 

[Jack_Tripper]

This is an interesting find (if it's factual), I have to believe that a ton of budget games (think solitare, board game compliations) have to make up a huge portion of the 30%, and in the minority you'd find games like MG4, Halo, Madden, etc etc...

That being said, it's amazing to think that publishers would back 90% of the crap out there on the market...and I'm not even talking about "good vs bad" games... as I have to belive that some of the "crap" out there is profitable, while other more mainstream games would be the "biggest loosers." I imagine that games that fall well outside my taste spectrum - i.e. Barbie's Horse Adventures - are probabyly in the 30% of games that make a killing.

Wow...games really have evolved into movies

 

[jandlecack]

On the other hand we have Beyond Good and Evil, Okami (or almost anything made by Clover) among others.

That is true but I have to say BG&E didn't really resonate with anyone as much as Okami did.

Sure it was a good game but I guess you are correct that the games I listed aren't just good, they "stand out".

Except for Halo which is a generic FPS. Sorry.

 

[NERO]

That being said, it's amazing to think that publishers would back 90% of the crap out there on the market...and I'm not even talking about "good vs bad" games... as I have to belive that some of the "crap" out there is profitable, while other more mainstream games would be the "biggest loosers." I imagine that games that fall well outside my taste spectrum - i.e. Barbie's Horse Adventures - are probabyly in the 30% of games that make a killing.

Wow...games really have evolved into movies

I have trouble believing the 30% number as well although it should be acknowledged that it was a guess (albeit an educated one). Games that make up part of this hypothetical percentage would - in my opinion - be primarily movie and toy-related games such as the fantastically awful BHA. I can't remember how many times of seen copies of film-licensed games at the base the of consoles owned by friends and the children of friends. Even though we don't always see these crap kid show/movie-licensed games in the top 20 for sales I'd be willing to bet they consistently show up in slots 25 through forty and take two months to develop.

Profit in the gaming industry is built on the yelps of children and the pockets of parents.

 

[eastmen]

On the other hand we have Beyond Good and Evil, Okami (or almost anything made by Clover) among others.

Perhaps its not just being a great game , but actually appealing to the masses. Okami was a niche title and while I love great games , it had zero appeal to me, on the other hand Bioshock was an amazing story and concept yet it had mass appeal and was rewarded for that.

 

[dobwal]

Here's the rub, then. Most of the games publishers are financing (does this include a bucket-load of small-scale PC boxed titles) are a waste of money. 70% of the game producing industry is dead weight. How that 30% is distributed, and how it's decided, determines the realities of most games producers. If games aren't selling because they're derivative titles, this is a message to the publishers to be more creative. If the successful titles are all derivative genre-clones, this is warning to the publishers to avoid innovation. If the financially successful titles are a mix, it goes to show publishers have no idea what will sell and what won't, and they'll just fund projects willy-nilly hoping this one will be a winner.

If every studio produces numerous titles per console, with a couple of low-sellers to a high seller, and that high seller is profitable enough to carry the financial flops, then I guess this truth about high failure is just the way things are and will remain. If studios are always successful, breaking even or being profitable, the average for other studios is even worse, and it sounds like half the industry could basically be sacked and the industry would be more profitable as a result .

Is this the case? Are most titles not worth the investment, losing the publishers money, and the developers should be chucked out on their ears? How much are the developers' efforts being wasted on stuff that won't sell because of publisher actions? How much does responsibility of financial failure rest with the publishers and how much with the developers?

A necessary function of the market. Just about every ideal thats pitched to a publisher that given the OK sounds good on paper. Some are destined for success while most are destined for failure. Its no different in the music industry where small group of successful acts help finance a bunch of money losing acts but also they finance future stars who will end replacing those who make up the small group of profit generators.

Even if every game produced was great quality, the market can only support so many hits. Its not like the 360 would have an attach rate of 400 even if all games were rated at 9 or above at release.

 

[Carl B]

This whole aspect of the gaming business has been a known quantity for some time, and I know it was a favorite topic of Shootmymonkey and certain other devs in months/years past.

This is why you have an industry that heavily favors sequels based on those few new IPs that do turn into hits; they've broken through, and now it's time to milk them as a 'safe' play for years to come. This has been a hard cycle for dev houses overall, and if you pay attention week-to-week as the year progresses, you'll note that plenty of projects have been canceled and team head-counts trimmed.

In the context of the debate between Jandlecack and NavNuc, I would offer that the quality of a game in terms of new IP comes second to its hype. A game can be great, but if it doesn't have the traction in the public psyche/coverage, it's not going to catch on (generally). There's no black and white rule though; obviously small indy games come out of nowhere to become monsters and games that have both quality and hype can turn into disappointments. But in this industry for the big expensive projects, I think the perception momentum has become more important than ever.

 

[RobertR1]

Look at the financials of diff companies involved in gaming today. Take away Nintendo and it's not a pretty picture for the industry. Someone put the whole list together on neogaf and it was clear.