The business of game development *spawn

[Rolf N]

We'll ignore the revenue that comes from the PS3 version becasue that's a constant in this example.

I believe this is the crux of what Ghostz tried to say: the revenue of the first platform will not be constant, it will drop because the title loses the allure of being an exclusive, and perhaps some other (minor?) disadvantages.

Not that I personally believe in this being a big enough categorical problem to eat away all the extra money to be made with multiple target platforms, but I can see how this is a position in an argument someone might want to take, for specific cases at least.

 

[London Geezer]

I believe this is the crux of what Ghostz tried to say: the revenue of the first platform will not be constant, it will drop because the title loses the allure of being an exclusive, and perhaps some other (minor?) disadvantages.

Not that I personally believe in this being a big enough categorical problem to eat away all the extra money to be made with multiple target platforms, but I can see how this is a position in an argument someone might want to take, for specific cases at least.

Releasing the 360 version would increase demand as you open your product to a bigger market. Fact.

I don't know why demand for the PS3 version would decrease with the release of the 360 version, except for the case that people with both consoles might get the 360 version instead of the PS3 version. In this case total demand is unchanged and my example still stands. You just switch consoles, you still get your revenue from the customer.

I don't see why people with only a PS3 would not buy the game just because it's being ported to the 360. If someone wants to play the game, he will buy it. If he doesn't want to play it, he won't buy it. Half the time i don't even know if a game is multiplatform. As a PS3 guy i care about what is released on PS3, and if a game happens to be on 360 too, it matters nothing to me.

But maybe my understanding of fanboyism is limited. The notion that someone would not buy a game at all, even if he actually wants to play, just because it's being released on other platforms, is absurd.

 

[Rolf N]

Releasing the 360 version would increase demand as you open your product to a bigger market. Fact.

I don't know why demand for the PS3 version would decrease with the release of the 360 version, except for the case that people with both consoles might get the 360 version instead of the PS3 version. In this case total demand is unchanged and my example still stands. You just switch consoles, you still get your revenue from the customer.

I don't see why people with only a PS3 would not buy the game just because it's being ported to the 360. If someone wants to play the game, he will buy it. If he doesn't want to play it, he won't buy it. Half the time i don't even know if a game is multiplatform. As a PS3 guy i care about what is released on PS3, and if a game happens to be on 360 too, it matters nothing to me.

But maybe my understanding of fanboyism is limited. The notion that someone would not buy a game at all, even if he actually wants to play, just because it's being released on other platforms, is absurd.

I don't think that's a widespread reaction either. But certain channels will try harder to spread the word about a game when it is exclusive, there will be more scrutiny and published media and opinions. If there's more of a fuzz about a game you will also be more likely to hear about it, to have seen trailers, screenshots and impressions, and could end up more likely to go for it. None of that is actively spiteful of multiplatform games from the purchaser's perspective.

 

[London Geezer]

I don't think that's a widespread reaction either. But certain channels will try harder to spread the word about a game when it is exclusive, there will be more scrutiny and published media and opinions. If there's more of a fuzz about a game you will also be more likely to hear about it, to have seen trailers, screenshots and impressions, and could end up more likely to go for it. None of that is actively spiteful of multiplatform games from the purchaser's perspective.

Hey!

Well we can do an example with demand, if now we're talking about demand and not revenue/profits.

Demand on PS3 = x
Demand on 360 = y

x + y will always, mathematically, be greater than x.

People who buy the 360 version instead of the PS3 version are a neutral element on the equation, as total demand is unchanged.

What Ghost is saying (from what i understand) is that the power of fanboyism is such that x + y becomes smaller than x. That somehow demand for the 360 version is negative.

For that to happen, it must mean that some of the demand for PS3 was very much "undecided". That some of the guys who were interested in the PS3 game didn't end up buying it. Out of all the reasons that would happen, i would count "the game is not good enough" as the biggest reason. Then money issues. But seriously, going multiplatform would be so far down the list that it must be immaterial.

My opinion, of course, but i think i'm right.

 

[Gerry]

But maybe my understanding of fanboyism is limited. The notion that someone would not buy a game at all, even if he actually wants to play, just because it's being released on other platforms, is absurd.

I think you underestimate just how f***ing stupid people can be.

This doesn't detract from the main point of course in that most of the time going multiplatform is a good idea and will make you more money, although there certainly will be exceptions. I doubt a lot whether Insomniac would be one of those exceptions.

 

[obonicus]

I regret having created this thread.

 

[DuckThor Evil]

What Ghost is saying (from what i understand) is that the power of fanboyism is such that x + y becomes smaller than x. That somehow demand for the 360 version is negative.

For that to happen, it must mean that some of the demand for PS3 was very much "undecided". That some of the guys who were interested in the PS3 game didn't end up buying it. Out of all the reasons that would happen, i would count "the game is not good enough" as the biggest reason. Then money issues. But seriously, going multiplatform would be so far down the list that it must be immaterial.

My opinion, of course, but i think i'm right.

There are many things that will persuade people to make the purchase and quality alone is not often enough. Without having made any research on the subject, I would argue that platform exclusives will get better review scores, atleast with platform specific media, but probably in multiplatform orientated media as well. Exclusivity brings "glamour" to the title as well and it will draw the attention of buyers more easily. Sometimes the decision to make a purchase can really hang on a thread and that's when all these little things come into play. Biggest multiplatform games are imo immune to this, but smaller marginal games aren't. Smaller multiplatform games can more easily get buried especially in a busy launch window.

People who buy the 360 version instead of the PS3 version are a neutral element on the equation, as total demand is unchanged.

Neutral in that equation, but not neutral in the equation where costs are also counted, in that equation platform switchers won't bring any extra revenue, but the costs are still there. I think it's pretty much given that going multiplatform will reduce the demand for both versions when looked in isolation, except if it's first an exclusive and then ported, but in these cases the demand for the later version get's reduced, often by a lot.

Still going multiplatform will in most cases create much more total demand, but I wouldn't be surpised if the total demand in that situation is more like 0,75x+0,75y instead of just x+y.

 

[London Geezer]

Still going multiplatform will in most cases create much more total demand, but I wouldn't be surpised if the total demand in that situation is more like 0,75x+0,75y instead of just x+y.

Personally, i think that exclusives (let's use GOW3 for this example, i have it in my hands) have more 'glamour' because Sony's marketing campaign is geared around that. It's an exclusive, it's only on PS3, it's one of the most anticipated games on PS3, it's a fantastic game. Glamour.

Millions of PS3 games will buy the game. Why will they buy a game? Only marketing research will tell us that, but we can make some assumptions. Out of all the 'decision breakers', i just don't see how 'being exclusive' would make someone buy the game. We buy the game because it's a good game, because it has fantastic graphics, some will buy it for the story, some because they don't know what to do with their money. Some will just be at the shop, see the cool cover and go "oooh scary, blood, what's this?? let's try!". Some will only buy it to see how the new funky AA works. LOADS will buy it as a present for someone else.

Now, why will people who own a PS3 not buy the game?
Too much gore. Too similar to old GOW games. Don't like action games. Don't care for the story. It's the third in the series and they don't want to go through two games before this one. Kratos looks like he's on steroids and they don't like that. Kratos's head is too small relative to the body (you know who you are ). The camera angles, this and that, there are hundreds of reasons, and i would think that 5 reasons will take up the vast majority of the total non-sales of the game.

Now let's say the game goes multi-platform (in a parallel dimension where Sony makes games for MS). I just do not believe that 'going multiplatform' is a good reason, compared to all the reasons i could think of above, and all the reasons i couldn't think of, for people not-buying the game. Definitely not enough to reduce the demand by 25%, like in your example (though i know it was just an example, a number thrown out there).

No one on this forum has researched this, and to be honest i have no idea how anyone could possibly tell us whether, historically, demand for a title was reduced when it turned out to be multiplatform.

Out of all the people who wanted to buy Final Fantasy 13, did anyone not buy it because it went multi? No, people did not buy it because they think it's rubbish based on reviews. Or for a host of other different reasons.

Same for 'smaller' games. People don't let those games pass because they're multiplatform, they do so because most of those 'smaller' games are shovelware, not interesting enough, or because they're just not worth people's time.

EDIT: Not-buying a game because it went multi is basically boicotting it. There might be the odd uber-fanboy who does that, but the percentage will be so small it's negligible to even account for it.

Again, that's just me.

 

[Laa-Yosh]

Kratos's head is too small relative to the body (you know who you are ).

Who said there's anything wrong with that? I've just noted that it's not realistic, that's all...

 

[London Geezer]

Who said there's anything wrong with that? I've just noted that it's not realistic, that's all...

Was joking, silly

 

[DuckThor Evil]

Same for 'smaller' games. People don't let those games pass because they're multiplatform, they do so because most of those 'smaller' games are shovelware, not interesting enough, or because they're just not worth people's time.

EDIT: Not-buying a game because it went multi is basically boicotting it. There might be the odd uber-fanboy who does that, but the percentage will be so small it's negligible to even account for it.

Again, that's just me.

I didn't mean that people won't buy it just because it went multi, but instead that when a game is multiplatform from the beginning, it causes multiple ripple effects and when all those are put together the demand of that game is less per platform. It's not a concious decision from majority of the buyers, but more like a macro effect. Less hype, less exposure, quite likely technically not as advanced as focused exclusive would be + the fanboys etc. Exclusives do get a boost in "stats"

Also for a smaller publisher/developer it might be less risky to go for only single platform, if they get help in financing the game or do co-marketing with the platform holder etc. Creating a multiplatform game is also more complicated than just snapping your fingers and watching the coders suddenly appear to the office. You need people with experience on multiple differing platforms and for some smaller devs that might be a hard task to pull of. Time is often a factor too.

 

[Cheezdoodles]

No. Expectations are based on future growth of the overall value of a company. Profit while an indicator of health, by itself is just as worthless an indicator as revenue. Market value is simply not an symptom of just profit growth.

Market value is discounted net value of all future cashflows. That certainly relates to profits. Revenue not so much.

If ROLF INC made 10 million profit every year for the last ten years but overall revenue grew from 1 billion to 20 billion over those 10 years, the share price of ROLF INC would have increased. It would be hard to go from spending 900 million a year to 19.9 billion a year with no company growth and/or no continual reinvestment.

Point is valid.But depends completely on company and industry. For a developer ? No. Most costs are operational, wages and generating art and marketing (by far the most). Margins can still be very low (aspecially if your game is not the best. Like in the movie industry there is a skewed distrubution, where top films stand for 80-90% of all new sales).

Another industry:
Finance firms can do this no problem over shorter timespans with near zero investments. Banks can with $10-100 million investments, easily do 10 billion revenues. The bank could still be a piece of shit bank and negotiate bad rates for themselves or have bad rates due to low volume, depending on a lot of factors this can make margins very very tight.

Sorry if this doesn't makes sense, im selfmedicated and i dont even know if i have allready replied to this.

 

[London Geezer]

Sorry if this doesn't makes sense, im selfmedicated and i dont even know if i have allready replied to this.

Two days of clubbing and finished GOW3 twice in between clubs. I know how you feel.

 

[dobwal]

Market value is discounted net value of all future cashflows. That certainly relates to profits. Revenue not so much.

Im talking market capitalization and not present net value. Revenue is important because its a sign of business activity and thereby "top of the line" growth affects share prices. Growing profits are important but if that profit growth happens without revenue growth its just a sign that a company is becoming more efficient in its current operations.

Profit is ultimately the most significant factor when judging a company, a company that can't make money is not going to find many avenues for growth. However, while profit provides the opportunity of growth, revenue is a sign of growth. I don't know of many investors that overlook or ignore the "top line" of a company.

 

[TrungGap]

Some interesting tidbit about number of sales to break even...

http://www.joystiq.com/2010/04/05/ninja-theory-co-founder-explains-studios-move-to-multiplatform/

"Heavenly Sword came out pretty early on the PS3," Ninja Theory co-founder Tameem Antoniades explained to CVG, "and we sold, I think, a million and a half copies, and that's still not enough as an independent studio to break even. The publisher potentially breaks even at that point, but the developers don't.

 

[Laa-Yosh]

Hevanly Sword was on the one hand a quite expensive project with hollywood talent (Andy Serkis, Anna Torv etc) and expensive contractors for mocap, music etc. which increased developer costs; but on the other hand it was published by Sony, so there was no license fee per copy to pay. These actually skew the balance towards break even for the publisher IMHO.

 

[dobwal]

Some interesting tidbit about number of sales to break even...

http://www.joystiq.com/2010/04/05/ninja-theory-co-founder-explains-studios-move-to-multiplatform/

I would have thought that Sony funded the whole development process and NT would have started to see profits once HS recouped its launched costs.

Maybe, NT fronted some of the development costs themselves with the hope that bigger slice of pie would provide a handsome return but the pie turned out really small. But 1.5 million in units shipped gives no hint to amount of revenue actually generated by HS.

 

[Laa-Yosh]

Publishing contracts are actually quite more complicated then that, at least as far as I know.

 

[corduroygt]

1.5M * ~$30 profit per game would make ~$45M, and if the publisher broke even, that means Heavenly Sword was just as expensive to make as GOW3? It could very well be, given how hard it was to develop for PS3 in 2007.

 

[Laa-Yosh]

Completing all the artwork for the game took a huge number of devs, too. At some time almost everyone at that Sony UK studio had been called to assist in order to finish the game on time.