How many semi-to large budget market flops can studios survive next gen.?

Li Mu Bai

Regular
Underperforming software, & missing the studios projected sales targets. (I'm looking squarely at Capcom & Namco/Bandai) Given the pre-requisite hardware requirements, (especially w/ the 360 & Live inclusion for instance) R&D allocations, programming complexity, team size, etc. I realize that there are a number of variables to consider here obviously but ERP, Faf, amongst other knowledgeable devs, (other specific names are currently eluding me so my apologies) what will be the minimum sales to garner company profitability? 400-500k? 500-700k? And the big budget titles like Fable, MGS4, Killzone 3, Gears of War, GoW, Halo 3, FF, RE5, GTA, Gran Turismo, Splinter Cell, etc.? A million-2 million+? I'm curious as to your estimates, $10 million seems like the entry point to the 1st generation of mid-range on the 360 afaik, I would assume that the PS3 would be no different in this cost aspect. I no longer see 150-300k+ in sales being considered as a monetary nor a market success. (or simply breaking even for that matter) Games simply cannot be designed that cost-effective any longer. (Nippon Ichi, Atlus, etc.) But what of the aforementioned huge budget titles? They could easily approach & surpass $50 million dollars in cost.

Seeing as some current high-budget generation titles have reached or surpassed the $30 million dollar mark, I would expect this number to at least double on some of the higher profile games. And 25-$30 million to be the new large budget cost point. How many titles of this magnitude, even at the mid level range, could a studio release & absorb before submerging? I can foresee this upcoming gen. bankrupting developers whose software underperforms, esp. the smaller houses. More company mergers & developers being bought outright as well. I say upcoming because the remaining 2 industry leaders have not yet released their next-generation consoles. I also disregard titles like Kameo & PD0, & any other games that were primarily designed for the XBX, & received the fairly quick port up to the 360. (as cost attributed to these titles don't accurately reflect development from the ground up on the current 360's very different architecture)

Due to this, I expect a stifling of creativity & an increase in mascot, movie, & even comic branded & based software. (even moreso than this generation, if you can possibly imagine) Or at the very least, a large influx of similarly themed designed games occupying the same genre. Third person military combat action based, (Gears of War for ex.) tactical or semi-tactical fpsers, (Clancy & Clancy-esque, Halo, Killzone, etc.) or software involving your character facing a seemingly insurmountable screenfull of enemies, & of course your GTA-esque free roaming clones, nigh-photorealistic racers, & sports based titles. I'm certainly not saying that any of these games will not be quality mind you, but the thread of similarity is already becoming visible, even at this early stage. I sincerely hope that I am wrong however.

edit: Revolution thoughts forthcoming
 
Li Mu Bai said:
Seeing as some current high-budget generation titles have reached or surpassed the $30 million dollar mark,
Eh? What games. Shenmue followed by Ryu Ga Gotoku are probably the most expensive games hitting ~$20M.

I don't think any studio can be certain to survive if they continually release flops, but then, that depends on how many smaller budget license-based shitty games they pump out to keep their bottom-line healthy. I think the issue is pretty overblown, large studios should be able to continue to manage budgets by distributing costs amongst many projects and smaller studios are not going to be releasing $25M+ titles anyway.

EA is aiming to keep within a 50% budget increase, smaller developers will probably get away with even less. Marketing costs should be constant and newer revenue streams are being opened up with XBLA, PS:C (presumably)....the PS2 is a platform that isn't going anywhere anytime soon.

The studios with the biggest budgets will probably mostly be first/second-party anyway, the only one I know is Naughty Dog ($25-30M USD (2x increase)). I think $50M+ USD budgets (ex. marketing) are a long, long way off. Even then though, 2M sales should at least be a breakeven.
 
EA is talking about a 300% budget increase (you can se it in the B3D news or something).

BTW I sugest you to read this blog, and this article in particular (althought this is in Nintendo defense they talk a lot about this issue a lot so it is a good read).
 
london-boy said:
Simple: increase the price of the games. It's already happening.

And lost gamers, because that is what will hapen that may work in the launch here it is the real hardcore that buy games, but not in the big market here mmost of people only buy about seven games per year (even according to a poll in anandatech), but if you read the article you can see this problems better exposed.
 
Lost gamers? Do you realize that we were all paying 60-80 bucks a game consistently during the NES 80's era.

I know I payed 80 bucks for Super Mario Bros 3.


I think games can easily be price at 60-70 bucks.

I dont know where this 49 dollar nonsense came from. Or segas $20 sports games.
 
skilzygw said:
Lost gamers? Do you realize that we were all paying 60-80 bucks a game consistently during the NES 80's era.

And how many consoles/games/gamers used to be at that time, and why there are classic games and games at 20$, meybe it is because that the current market dont need those how buy that games.

True mainstream in games will only be possible when prices go down to the CDs/DVDs prices.
 
Well if you believe what some people say there were more gamers at that time then there is now. I'm including COIN-OP and all games in this.

You would think there were more female gamers playing at that time, expecially with the PACMAN & MS. PACMAN craze. These were games women were generally better than men at.

And to the original topic. Atari couldn't survive 2. Pacman & ET for the 2600
 
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Nicked said:
Eh? What games. Shenmue followed by Ryu Ga Gotoku are probably the most expensive games hitting ~$20M.

Final Fantasy IX or X has passed that number a long time ago. I recall more like $30-40M...
 
if they invest in educating some people in 3rd world countrys, making long term contracts, then should get by with paying 1000-4000 us dollars a year.

---> developing costs cut by 5-30 times.
 
pc999 said:
EA is talking about a 300% budget increase (you can se it in the B3D news or something).
Didn't EA say in Edge or some other magazine that they were sticking to a 50% increase and achieving titles like FNR3 with it?

pc999 said:
BTW I sugest you to read this blog, and this article in particular (althought this is in Nintendo defense they talk a lot about this issue a lot so it is a good read).
I must say that took a very dire view of the current market and associated parties.

This market contraction hasn't happened yet, I guess gamers just aren't "burnt-out" yet.

Laa-yosh said:
Final Fantasy IX or X has passed that number a long time ago. I recall more like $30-40M...
W/o marketing? Shenmue holds the world record at any rate.
 
Without marketing, and I've read the info here on B3D, so the member who posted it might read this and provide the source as well...
 
I got the info here, dont know if they said anything more in mags.

I think that visionis more suited to mid XB360/PS3 life, at least I think it will happen to me.
 
Quick search result:

http://www.beyond3d.com/forum/showthread.php?p=53986&highlight=final+fantasy+budget#post53986

Even though Final Fantasy XI's development cost Square "only" 12 million USD (compared to 30 million USD for each PS installment of the series, and between 30 and 40 million USD for FFX)

A typical AAA potential game now costs £1m to £2m and takes around 18 months to complete although some games have as much as 3 year development periods budgeted and total development costs can go a high as £15m (Square's Final Fantasy VII cost $26m and Sega's Shenmue has a $20m budget).

And this one from archie4oz who actually worked as a developer on FF:
In case you're more curious about FF specifics...

FFVII : 26 million
FFVIII : 30 million
FFIX : 38 million
FFX : 40 million
FFXI : 12 million

That smokes Shenmue as far as I see it. But their sales do just as well ;)
 
Laa-Yosh said:
Quick search result:
Going by that, Shenmue still holds the #1, but not with the $20M budget that Guinness is declaring (of course Publishers would have to submit the cost to have it ranked).

Serenity Painted Death said:
they at least make all that back
Even if you doubled the costs inc. marketing...they would probably still breakeven in Japan alone...it did cost 8800/10800 yen (10800 yen being the LE), S-E getting the lions share of that. The amount of money they made WW was probably crazy.
 
Nicked said:
Going by that, Shenmue still holds the #1, but not with the $20M budget that Guinness is declaring (of course Publishers would have to submit the cost to have it ranked).

So did it cost more than $40 million then? You've said something else before, like ~$20M...
 
Laa-Yosh said:
So did it cost more than $40 million then? You've said something else before, like ~$20M...

Shenmue is supposed to be one of the most expensive games in history (in terms of development costs in), probably explains why sega went down hill soon after.

I can't imagine a PS1 game costing 30 million.
 
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