LOL What???
All the 3 titles covered MORE than porting cost = profit.
Its quite clear that Oblivion PS3, which costed 2 million to port (if these 20 coders where given 100k salaries), netted quite a nice profit from the 1+ million sales. Lets say you get 20$ per title you sell, thats still 18 million profit and ROI is 900%.
Similarly, Bioshock and Lost planet ports also netted profits.
This is anecdotal, I simply don't believe it only costs 2 million to port Oblivion. You only factor in how much it costs to hire coders, you don't factor in the cost of 1)royalties and 2) operations.
Uhm. Again, your lack of finance understanding is shining through. you dont have to give up ownership of your properties. EVER HEARD OF DEBT FINANCING??
That's the problem with industry now and brings my point full circle. I don't want to get into how utterly stupid it is to finance debt. How many more crisis' there needs to be? What is clear to is that you've never ran a business in your life.
This is anecdotal, I simply don't believe it only costs 2 million to port Oblivion. You only factor in how much it costs to hire coders, you don't factor in the cost of 1)royalties and 2) operations.
This seems the fundamental point of contention here, despite barely being touched upon within this thread. What exactly do you think the costs of porting a title are? We've cited examples where we've known the porting to consist of half a dozen guys, which isn't going to cost a great deal. Licensing is a factor eating into profitablity of each unit, but that's a cost burden for just producing the title, and will be incurred regardless of whether you print 5 million discs over two platforms or 5 million on a single platform. Operations are going to exist for the single-platform title, and the few guys in a room round the back working on the PS3 port (poor suckers!) is not going to add anything noticeble to those costs. Advertising will be the same for two platforms as one. Studio upkeep will be the same. You'll need to buy some more SDKs of the other platform, which'll come to some thousands of dollars.
Basically, everyone else in this thread is of the opnion that porting is cheap, basically halving the per-platform cost of a title, and the increased revenues above breakpoint counts for more profitability than releasing the same title on one platform only. You need to present a good case that porting is expensive and the profits on the ported game are mitigated by the costs, rather than just saying you don't think it's cheap.
eg. Why shouldn't Oblivion cost 2 million to port? What costs were involved? 5 engineers in the studio with 5 PS3 SDKs, using all the existing assets created for the game regardless of which platform it's on, costs how much?
This is anecdotal, I simply don't believe it only costs 2 million to port Oblivion. You only factor in how much it costs to hire coders, you don't factor in the cost of 1)royalties and 2) operations.
Royalities are a fixed % of copies created. Already factored in with me assuming you earn 20$ and not say 30$ per title sold. (and no there is no multiplier effect for royalities. You pay royalities PER COPY to that platform. If i make a PS3 and X360 game and create 4 million copies split evenly, i pay microsoft X royalities for 2 million copies, and pay Sony X royalities for 2 million copies. I dont pay for markets where the copies are not created.
Operations already exist, but i have implicitly already implemented them by assuming that the costs for having the coders are 100k a year per person. The average coder gets paid a lot less than that.
I don't want to get into how utterly stupid it is to finance debt.
financing with debt is stupid? Its quite clear that you have never read even the most basic finance book. Debt finance is great. Simple example:
100% equity firm vs 50% equity firm.
Both face same project that require 50 million investment. return on project is 100million.
Equity firm: -50 + 100 = 50 ROI for equity holders = 100%.
Leveraged firm: -50 + 100 = 50. Financed by 50% debt, so equity holders invest 25 million, rest is financed by debt. At the end of the project, you pay back debt, rest is for equity holders. (CF wise it would look like: -25(equity invest) + 100-25(debt repayment))
ROI for equity holders = 50/25= 200% And you end up with same money in cash.
Now you we could add interest,tax deduct etc to this example, but it would only complicate calculations without adding anything to the argument.
Debt can be bad if you have to much of it (financial distress costs, prop of default etc), which is why most firms dont tend to have a very high leverage.
Its quite obvious you have no idea why the financial crisis came along,without going into the discussion, lets just say its not because companies have debt. Companies have had debt for several hundreds of years. It does not cause crisis. Of course, a company could have lended to much, and go bankcrupt. Bank looses some money. This by itself doesn't create a crisis, not even for the bank itself, it has already incorporated default risk and has diversified accordingly.
The current financial crisis is in no way related to to much debt in companies. Bank losses have not stemmed from firms not being able to pay, they came from to many people believing that US housing prices could only go up and securitization of products directly related to us housing prices.
(current financial crisis is a combination of bad regulation, incredibly stupid laws regarding default on mortage, incredibly stupid governmental projects (NINJA mortages) and securitization, nothing to do with companies taking up to much debt).
You need debt for financing projects, otherwise nobody except people with capital (rich people) would ever be able to create something. How would you buy a house? Youd have to save up for 20 years living in your parents house until you could buy one.
Debt finance is great for a number of reasons:
DEBT FINANCING IS CHEAPER THAN EQUITY. Not only that, interest is tax deductable! And expected ROI for equity holders increases with leverage.
What is clear to is that you've never ran a business in your life
This seems the fundamental point of contention here, despite barely being touched upon within this thread. What exactly do you think the costs of porting a title are? We've cited examples where we've known the porting to consist of half a dozen guys, which isn't going to cost a great deal. Licensing is a factor eating into profitablity of each unit, but that's a cost burden for just producing the title, and will be incurred regardless of whether you print 5 million discs over two platforms or 5 million on a single platform. Operations are going to exist for the single-platform title, and the few guys in a room round the back working on the PS3 port (poor suckers!) is not going to add anything noticeble to those costs. Advertising will be the same for two platforms as one. Studio upkeep will be the same. You'll need to buy some more SDKs of the other platform, which'll come to some thousands of dollars.
Basically, everyone else in this thread is of the opnion that porting is cheap, basically halving the per-platform cost of a title, and the increased revenues above breakpoint counts for more profitability than releasing the same title on one platform only. You need to present a good case that porting is expensive and the profits on the ported game are mitigated by the costs, rather than just saying you don't think it's cheap.
eg. Why shouldn't Oblivion cost 2 million to port? What costs were involved? 5 engineers in the studio with 5 PS3 SDKs, using all the existing assets created for the game regardless of which platform it's on, costs how much?
The problem is the assumption that it's only a little cost here, a little cost there, ends up looking like 10 million of little costs everywhere. Which is a reason why Valve has been dead setup against Ps3 development for years, until recently.
Again, these costs have cumulative effect. Some may put operations in a different windfall category, they may put production in different profit/loss portfolio, they may do the same to royalties. I doubt it's as simply, OMG we need to port everything now = MORE MONEY. It doesn't work that way. With 6-10 million your investment is better had elsewhere to yield greater return. Apparently some people are of the opinion it works. Me? Not so much.
The problem is the assumption that it's only a little cost here, a little cost there, ends up looking like 10 million of little costs everywhere. Which is a reason why Valve has been dead setup against Ps3 development for years, until recently.
That's not really an answer. We've explained hypothetical scenarios where the costs are low, based on real-world understanding of what it takes to make and port a title. Please present a hypothetical scenario of your own listing the costs involved in porting Oblivion such that there was no profit to be found in a million PS3 sales generating $60 million revenue, of which some $20 million went to the publisher.
That's not really an answer. We've explained hypothetical scenarios where the costs are low, based on real-world understanding of what it takes to make and port a title. Please present a hypothetical scenario of your own listing the costs involved in porting Oblivion such that there was no profit to be found in a million PS3 sales generating $60 million revenue, of which some $20 million went to the publisher.
How many times am I going to have to repeat myself?
I already presented a "hypothetical" scenario in a real-world understanding where the costs of porting a title like Oblivion or Half Life2: Orange Box or Left 4 Dead to the Ps3 would be better spent elsewhere ( implied as much ). For Valve, such as releasing Left 4 Dead 2 a year later after the original release, instead of dogging about with a Ps3 version. That's just one example. You people are simply refusing to understand simple economics and mathematics that doesn't already go with your preconceptions and group think scenarios.
How's about you stop repeating yourself then and try a different response?
I already presented a "hypothetical" scenario in a real-world understanding where the costs of porting a title like Oblivion or Half Life2: Orange Box or Left 4 Dead to the Ps3 would be better spent elsewhere ( implied as much ).
But you've given NO numbers to ilustrate your ideas. You have said, "I simply don't believe it only costs 2 million to port Oblivion. You only factor in how much it costs to hire coders, you don't factor in the cost of 1)royalties and 2) operations," but you have not anywhere given a dollar amount to the cost to port Oblivion to PS3. You did say, "with 6-10 million your investment is better had elsewhere to yield greater return," suggesting a cost to port well in excess of $5 million, but you haven't really presented us with a cost breakdown that we can dispute, or which can be used to prove us wrong.
So this time, instead of repeating yourself with your argument that us thicko idiots are failing to comprehend, how's about you prove us wrong in simple monosyllabic words we can understand by stating, "it would cost somewhere in the region of $xxx to port a game like Oblivion to PS3 because you have to pay for a, b, c, and given sales of n, your returns will be poor compared to spending xxx on a new title." Then we can all say, "duh, yes, silly us! We failed to appreciate all those extra costs. Now we see!" and you will have gloating rights without the need to grumble incessently.
How's about you stop repeating yourself then and try a different response?
But you've given NO numbers to ilustrate your ideas. You have said, "I simply don't believe it only costs 2 million to port Oblivion. You only factor in how much it costs to hire coders, you don't factor in the cost of 1)royalties and 2) operations," but you have not anywhere given a dollar amount to the cost to port Oblivion to PS3. You did say, "with 6-10 million your investment is better had elsewhere to yield greater return," suggesting a cost to port well in excess of $5 million, but you haven't really presented us with a cost breakdown that we can dispute, or which can be used to prove us wrong.
So this time, instead of repeating yourself with your argument that us thicko idiots are failing to comprehend, how's about you prove us wrong in simple monosyllabic words we can understand by stating, "it would cost somewhere in the region of $xxx to port a game like Oblivion to PS3 because you have to pay for a, b, c, and given sales of n, your returns will be poor compared to spending xxx on a new title." Then we can all say, "duh, yes, silly us! We failed to appreciate all those extra costs. Now we see!" and you will have gloating rights without the need to grumble incessently.
Since you can't forcibly make me form same conclusions as you why not do the patronizing bit?
And since none of us have the exact numbers of what it costs to port a title like Oblivion or Left 4 Dead to the Ps3, we can only use anecdotal evidence based on experience.
Your assumption is that there's only one associated cost to porting. From my experience, this is false. I already gave you a breakdown and a ballpark figure of what the details and all their associated costs may look like. I don't exactly know what Valve's situation is but I understand it; it's my belief those resources [costs of porting] could be better spent yielding higher revenues elsewhere. I have constantly supported my theory with numbers and scenarios for the last 4 pages. So I am done doing the dance. The burden of proof is therefore on you. You need to prove that the cost of porting for example, Left 4 Dead, to the Ps3 is better served to Valve's profitability then doing Left 4 Dead 2 a year later.
Now, the situation is completely different if you are developing for multi-target from the get-go, when your budget isn't fixed and capital gains for multi-targets are understood. I even used EA, who supports multi-target development. I even cited them REDUCING platform support to increase earnings for short term profitability.
What more else do you want? You just want to me to believe what you believe since you can't forcibly tear down the merits.
How many times am I going to have to repeat myself?
I already presented a "hypothetical" scenario in a real-world understanding where the costs of porting a title like Oblivion or Half Life2: Orange Box or Left 4 Dead to the Ps3 would be better spent elsewhere ( implied as much ). For Valve, such as releasing Left 4 Dead 2 a year later after the original release, instead of dogging about with a Ps3 version. That's just one example. You people are simply refusing to understand simple economics and mathematics that doesn't already go with your preconceptions and group think scenarios.
If you saying that under certain circumstances, exclusivity without financial incentives from console manufacturers makes sense, then I agree with you. There are instances and scenarios where exclusivity would trumph multiplatform in terms of being more profitable. But if you saying in general that multiplat is often bad, I would say, "You are dead wrong".
Pulling out hypothetical and rare scenarios of where exclusivity makes sense doesn't change the fact that in general, multiplatform development is cheaper in terms of development versus potential profit. About the only time multiplat doesn't make sense when not financially enticed by MS, Sony or Nintendo to do so is if you lack the resources or you cannot port in a time frame that will allow for simultaneous launch of both skus. Historically, skus on the back end of staggered launches do nowhere near as well as skus launched together.
MS financed the development of Gears so exclusivity makes sense. There is a reason why most third party titles are multiplat and most exclusive titles are financed in some form or fashioned by console manufacturers. Its more profitable to do so.
L4D is not a common scenario to be used generally as proof why multiplat is too expensive. L4D was not developed by Valve but by Turtle Rock who Valve bought for the IP and subquently dissolved after the release of L4D. Furthermore, Valve acts as its own publishers for alot of its titles but may lack the resources to do a full launch of a title on multiple platforms. Development costs are cheap compared to cost of sales on any title with healthy sales volume. COD:MW2 development cost were reported in the media was $40 million but its launch costs were reported to be $160 million (not including dev costs). Valve didn't act as a pub for the Orange box's PS3 sku, EA did. L4D being an unknown in terms of profit potential may have discourage Valve from taking on additional costs of using EA. EA or any publishers are not going to give the most favorable terms if you are not giving them either ownership or partial ownership of either the IP or the source code especially for a IP with no history.
Shifty, I can't talk with numbers, because the only numbers I know are for the studio I work for, and I can't publish them.
While I generally agree that for bigger projects multiplatform is the saner choice - see above my comment for half-price art - there ARE situations where it doesn't make sense to go multiplat.
We are
- a small studio
- under VERY tight deadlines
- under very restricted budgets
- relatively small titles, selling in the hundreds of thousands, if we're lucky, not millions
- with no PS3 experience
- located in Sofia, Bulgaria, where we can't expect to hire anyone with PS3 experience
- with a game/engine that's particularly ill suited for Cell's SPUs
- with relatively modest art budgets, meaning relatively high portion of software and testing in the mix
So for our current titles, scale, scope, publishers, it doesn't make sense for us financially to go to PS3.
It's not just "cost", it's also "opportunity cost" - if we tie up several of our best programmers into PS3 development, how many titles will we fail to make? Can a single PS3 SKU compensate for that?
We're working on all of the above factors - except relocating the studio, of course - so we can go multiplatform at some point - but we're not yet there.
If you saying that under certain circumstances, exclusivity without financial incentives from console manufacturers makes sense, then I agree with you. There are instances and scenarios where exclusivity would trumph multiplatform in terms of being more profitable. But if you saying in general that multiplat is often bad, I would say, "You are dead wrong".
Pulling out hypothetical and rare scenarios of where exclusivity makes sense doesn't change the fact that in general, multiplatform development is cheaper in terms of development versus potential profit. About the only time multiplat doesn't make sense when not financially enticed by MS, Sony or Nintendo to do so is if you lack the resources or you cannot port in a time frame that will allow for simultaneous launch of both skus. Historically, skus on the back end of staggered launches do nowhere near as well as skus launched together.
MS financed the development of Gears so exclusivity makes sense. There is a reason why most third party titles are multiplat and most exclusive titles are financed in some form or fashioned by console manufacturers. Its more profitable to do so.
L4D is not a common scenario to be used generally as proof why multiplat is too expensive. L4D was not developed by Valve but by Turtle Rock who Valve bought for the IP and subquently dissolved after the release of L4D. Furthermore, Valve acts as its own publishers for alot of its titles but may lack the resources to do a full launch of a title on multiple platforms. Development costs are cheap compared to cost of sales on any title with healthy sales volume. COD:MW2 development cost were reported in the media was $40 million but its launch costs were reported to be $160 million (not including dev costs). Valve didn't act as a pub for the Orange box's PS3 sku, EA did. L4D being an unknown in terms of profit potential may have discourage Valve from taking on additional costs of using EA. EA or any publishers are not going to give the most favorable terms if you are not giving them either ownership or partial ownership of either the IP or the source code especially for a IP with no history.
I would say in general multi-platform isn't as profitable as people make it out to be and exclusivity is more profitable then people make it out to be.
So I don't see where we disagree. I am not saying MW2 would've been more profitable if it was exclusive but I don't think Valve [as a company] would've been as profitable if they wasted capital pissing about trying to get Left 4 Dead on the Ps3.
That's not patronizing. That's me being polite and restrained. And this is me being a moderator : stop implying everyone's stupid and arrogant or you'll be given time off to practise being civil.
And since none of us have the exact numbers of what it costs to port a title like Oblivion or Left 4 Dead to the Ps3, we can only use anecdotal evidence based on experience.
Anecdotal evidence is not accurate, but all we need is a ballpark figure. If the cost of porting is of the order of a million bucks, porting makes sense for most titles. If it's more like 10 million bucks, it doesn't. All we need is a figure that every can agree represents an approximation of porting costs.
Your assumption is that there's only one associated cost to porting.
No it isn't, but I do believe there greatest cost by far is the cost of developers.
From my experience, this is false. I already gave you a breakdown and a ballpark figure of what the details and all their associated costs may look like.
Again, these costs have cumulative effect. Some may put operations in a different windfall category, they may put production in different profit/loss portfolio, they may do the same to royalties. I doubt it's as simply, OMG we need to port everything now = MORE MONEY. It doesn't work that way. With 6-10 million your investment is better had elsewhere to yield greater return. Apparently some people are of the opinion it works. Me? Not so much.
Shifty, I can't talk with numbers, because the only numbers I know are for the studio I work for, and I can't publish them.
While I generally agree that for bigger projects multiplatform is the saner choice - see above my comment for half-price art - there ARE situations where it doesn't make sense to go multiplat.
Oh sure, and it's nice to here from a petite developer. Size counts for a lot. The Edge blog from Hello Games about Joe Danger shows a titchy studio having to choose between platforms despite wanting to create for them all. Also when I was arguing exclusivity from the other side some years back, I suggested other reasons like being a bigger fish in a smaller pond rather than a medium fish in a larger one, and even artistic vision. It's kinda funny though have often in debates like that, the expression of an opinion is often taken is absolute and exclusive! Arguing that multiplatform is a Good Thing does not equate to every dev needing to pursue multiplatform development. As in true in all things, regardless of what the norms may be, everything must be evaluated on a case-by-case basis if you want the ideal results. This argument is more about the typical endeavours from larger and established studios in response to the Insomniac chatter, although your contributions help fill out the bigger picture.
I know we are pretty far along in the discussion. But I have a question? Is it even up to individual developers whether their game will be multiplatform. Doesn't ultimately the publishers decides as its up to them how much funding you will recieve? A lot of porting isn't even done by the original dev team but by outside developers or am I wrong?
I mean has anyone really heard of a developer telling EA or any other big pub, "Hey we want to go exclusive on this one."
From my experience, this is false. I already gave you a breakdown and a ballpark figure of what the details and all their associated costs may look like.
Where is the breakdown of costs as requested, which you said you had already provided? How much would you attribute to operations, and why is that so much more more to run the entire studio with an extra room of a half dozen engineers? How does production affect costs beyond the costs already associated with producing an exclusive game? How come royalties on producing a 2nd platform rendition of a title can be so stifling to profits when a single platform can be profitable?
Modhat: My current opinion is that you are here to make trouble and not engage in sensible debate. I've got to go to work now, but if when I come back I haven't seen a proper, polite response engaging in the debate based on the polite requests of contributors to see how are justifying your predictions, I shall forceably remove you.
I really don't see how there can even be a discussion about this. It's maths.
Assuming that:
Cost of developing the game on PS3 = x
Cost of port to 360 = y
Total revenue = z
IF x + y < z then the port makes sense. Profit.
Now, elaborating what was said on this thread, by all accounts it looks like porting a game costs a fraction of the total cost of development of the original game, a bit like this:
x = $20M
y = $2M
We'll ignore the revenue that comes from the PS3 version becasue that's a constant in this example.
Now, assuming that z is expected to increase more than $2M (they would only need to sell 40,000 copies of the 360 version at $50 per game to break even), then porting always makes sense.
With sales forecasts of about 500k for the 360 port, the port alone would make $25M which not only cover the cost of the port, but also of the original game. Again, it's like printing money.
Now, if the publisher then goes on a spending spree and spends $30M to market just the 360 version of the game, then they seriously need to fire their marketing director.
Of course this is all based on sales forecasts - no one knows how many copies will be sold of the port until they have actually ported it and released it. But looking at the above, 40k copies covers the costs of the port, which i set at a very generous $2M. And these days anything less than 100k copies is considered a total failure...
