KZ2 and game budgeting in general *spin-off

Discussion in 'Console Industry' started by Laa-Yosh, Apr 18, 2009.

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  1. Cornsnake

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    Maybe, but the OP was questioning wether or not Sony would make any profit on KZ2. So the answer to that should including the marketing cost.

    Edit: beaten. :)
     
  2. patsu

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    If so, you won't be able to argue whether the development cost is higher or lower than expected since no one specified what percentage of the total budget was for development. :twisted:

    For sure the break even point has to cover marketing. Like I said, the first party development is an area Sony needs to have tighter control over, but at this point, there are probably other areas to cut without affecting their potential upside. It is still unclear whether KZ2 will lose money since KZ1 being a not-so-great game managed to sell 2.5 mil over its lifetime.

    The PS3 market is much smaller, but the price is higher by $10 and the game is better by many's account. At this point, they already passed 1 million in a month+ and unlike previous gen, they have DLCs to play with. [size=-2]Throw in a good party system please ![/size]
     
  3. StefanS

    StefanS meandering Velosoph
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    Actually according to this link I posted earlier it was 2 million british pound. Still a slight difference. So let me restate my point from before: "I'd say that the global marketing budget is well in excess of 20 million dollars2".
     
  4. patsu

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    I thought the article mentioned 20+ million Euro (rather than US$) for marketing ?
    [size=-2]In short, it is in excess of US$20 mil[/size]
     
  5. zed

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    I had a look at the above video this time + read the text again. some contradictions between the various info's posted.

    he (managing director) saiz 4years x150 ppl = 600 man years, 52,000x600 = ~32million on salary thus we're looking at at least 50million plus marketting (~20million, 2 million in UK)
    20million is what the xbox360 game lost planet spent on marketing btw

    killzone1 made 150million (gross)
    Ild say killzone2 needs ~1.5million sales to break even
     
  6. JPT

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    A bit to the side of the current topic, but still same ballpark, i hope.

    Everybody keeps talking about sales numbers and how bad certain titles are doing compare to others etc. But I did not pay attention to last generation, what was a good selling title on PS2 and Xbox? I mean PS2 with its 100M sold units, what was considered a success, ie GoW for PS2 and GTA series? Also what about XBox success title, ie Halo2 etc?
     
  7. Shifty Geezer

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    Of course I can't. I just think the whole discussion on long-term tech benefits is...not discusable. One can as readily say 'there's a tech development bonus with long-term substantial financial benefit across the whole Sony gaming group' as 'any tech benefit is irrevelant in size to the ongoing costs of producing and selling a game' yet neither side can present anything more substantial than a gut feeling. As such, it can't really be presented as a benefit to the cost of developing KZ2, and the value of the investment needs to be decided solely on what we can measure - costs and takings.

    There's quite a difference between 'should Sony have spent this much to make this game' and 'should Sony have spent that much to market this game' ;) The arguments against financing KZ2 need to take that into account.

    As for Killzone selling 2.5 million (boy, VGChartz are really out on that one!!!) that was to a userbase of 90 million. So 1:36 PS2 owners bought KZ. Clearly KZ2 has to sel far better relatively speaking. Unless all those 2.5 million KZ buyers are also willing to pony up £300 or equivalent for a PS3 to play KZ2, it can't be expected to hit the same sale rate. It's done remarkably well considering!
     
  8. Shifty Geezer

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    A few million. The most important igure is actually if the game recovers costs. IMO a lot of people focus on unrealistic best-case targets, not recognizing anomalies are going to exist at the top and bottom end of the scale. Lose the statistical noise of a few freak titles, and a couple of million is the norm for a good selling title.
     
  9. patsu

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    It's case by case. In other words, if you are GG, you stand to gain the most because you can reuse a lot for KZ3 (if approved). The KZ2 interviews highlighted that they took a franchise world approach (i.e., multiple titles for the same world). For other sharing benefits, it's gravy on top.

    KZ1 sold 2.5 mil units and made US$150 mil (gross).

    If people are just shooting for breakeven, then the target is (much) lower. If zed is correct, 1.5 mil doesn't look too far away given that they have already exceeded 1 mil in less than 2 months. If they lower the price, they will sell even more (jstevenson mentioned that for Insomniac titles, most units get pushed through when a game is labelled as greatest hits). On top of that add DLC revenue.

    At this point, I don't see why people "panicked". It's disappointing, but not back breaking.
     
  10. scificube

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    There is absolutely NO metric by which you can fiscally quantify the value of R&D.

    If so I challenge anyone to tell what the return to date has been on velcro.

    or Boost...

    or DirectX...

    or Airbags...

    or whatever else you care to name. The search for the unquantifiable will always return results from the ether of subjective interpretation.

    I also reiterate my concern that somehow an internet blogger is more credible that GG themselves about the length of development of Killzone 2. If what they say is to be disregarded then it must be after they have been discredited.

    I await proof to that end.

    I would also like proof as to why when Sony says that God of War 3 budgeted at 40 million dollars will be their most expensive first party title to develop to date that this is false and KZ2 cost Sony more than this amount to develop.

    As of now its just of tug of war over whose assumptions you believe more. These assumptions must be imbued some measure of validity before we go off basing more off of them.
     
    #110 scificube, Apr 19, 2009
    Last edited by a moderator: Apr 19, 2009
  11. StefanS

    StefanS meandering Velosoph
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    Extrapolating from a game from the PS2 era that undoubtedly had a far smaller budget at that time, is not very sensible IMHO.

    I pretty sure regardless of whether KZ2 is profitable, GG will produce either a sequel or a game based on their engine, thus amortizing dev costs of KZ2. However, I do believe, however, that the question raised by others how much of KZ2 techniques, R&D, code base for other games by other 1st, 2nd, 3rd parties is a valid one.
     
  12. patsu

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    The KZ2 dev budget is said to be $20+ mil Euro (That's lower than GoW3's US$40 mil for development purposes). I am assuming the GoW3 budget does not include marketing.

    As for returns for tech sharing, I think it's futile to try to argue either way. Different parties may benefit from the effort and it will show up in their results (rather than in GG's finance). If there's a difference, we will only see it when we look at the entire picture over a longer horizon.
     
  13. joker454

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    People are creative with numbers. The GOW3 numbers may be salaries only, and not include marketing, etc. In that case then yes, it is more expensive than KZ2 salaries, at least more than my 25mil KZ2 salary guesstimate, and the 32mil zed mentioned.


    If Sony doesn't approve KZ3 then I will start to question their sanity. They are pot committed on that tech line. They have stayed in the poker hand through $300 of bets, they better call the last $50.


    Naughty Dog seems to do very well there, although they have years of experience.
     
  14. patsu

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    We know the total spending, we know the current unit sales, which will continue/decline/spike throughout PS3 lifetime. The profit can be derived relatively easily because there is only one party involved (Sony), excluding the retailer. There seems to be viable options in play (DLC, lower price, sequel). I still don't see what the big deal is.

    I think people raised a lot of questions, especially regarding KZ2's profitability and the viability of first party strategy. After this back of the envelope exercise, I think those concerns are overblown -- for KZ2 (Lair is a separate question ^_^).

    As for tech sharing, we will have to observe over a longer period of time. I am sure the integrated AI + animation techniques will appear in other games (because it was a known problem the AI guys tried to solve earlier but failed). The deferred rendering approach may gain more maturity, especially with KZ3 and other parallel efforts. However, there is no uniform way to recognize this sort of things.

    Even looking at existing cases like nAo HDR, how do you measure its impact ? It might be easier to measure the impact of the vehicles (e.g., XNA, Edge and PhyreEngine), but those are a lot of things together.
     
  15. Laa-Yosh

    Laa-Yosh I can has custom title?
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    Even if KZ1 sold 2.5 million, I seriously doubt that every piece was sold for $60 - did it not become a platinum title with a lower price within 1-2 years after its release? And obviously Sony did not get all that money... and Guerilla wasn't even first party back then. So I don't see how it's relevant to KZ2... :)
     
  16. Laa-Yosh

    Laa-Yosh I can has custom title?
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    1-2 million was pretty common on PS2 thanks to the large user base. Considering that both development time and team size were a lot smaller, this meant that most of these titles were quite profitable. High budget games like the Gran Turismo and FF series have usually sold above 5 million copies so they were profitable too.

    Only a few games went past 10 million, like GTA, and Xbox haven't really had anything but the two Halo games close to that number (both Halos are around 8-9 million AFAIK).

    Today's market is radically different with the 50% market share of the Wii and very small 3rd party sales on that platform. So most publishers have to survive with a market about half the size of the PS2 with budgets 2 to 5 times as big... hence the rapid consolidation of the industry into mega-studios like EA, Ubi or receive funding from Sony or MS, with a few independent houses like Epic, id and such scattered around...
    And there's an emerging market for XBLA, PSN and iPhone games where dev costs are still contained. We'll see how big they're eventually become.
     
  17. obonicus

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    It wouldn't have sold for $60 in the first place.
     
  18. obonicus

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    Well, that's exactly what scificube is saying: why are we going 'people are creative with numbers', but no one's holding any other data to the same level of scrutiny, including yours? If we're going to say that they're not being truthful we should have a good reason for it, not 'it doesn't agree with my point'.
     
  19. Butta

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    Wasn't every site reporting first week sales (which only included 3 days) for Killzone 2 to be 750,000? I remember reading this everywhere. Am I supposed to believe that a month and a half after that they are only at 1 million... somebody got their numbers wrong somewhere and given the amount of sites reporting on the 750,000 number, could over a million be somewhere around 1.4 million? Seems weird.
     
  20. patsu

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    The KZ1 number is only meant as a reference. It has no bearing on how well/badly KZ2 sell (unless some were badly burned by KZ1 :))

    Isn't it better now since KZ2 sell at a higher price, and is already over 1 million unit sold within 2 months, plus now Sony gets all the money and the engine for KZ3 has been amortized ? The big difference is the small PS3 market size (i.e., proportionally more players bought the game, but with less potential for growth) and introduction of DLC this gen. All we can do is to watch Sony and GG roll out their next moves.

    The big disappointment is Sony can't go in for the kill like MGS4, but the game's not dead. It would be interesting to see if KZ2 outperform KZ1 revenue-wise at the end of PS3 lifecycle.
     
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