The "what is a successful game?"/"are exclusives worth it?" cost/benefit thread

[2real4tv]

I think the title should read "are new IP exclusives worth" it old exclusive IP's have done well.

And....GOWIII will sell >3m WW

 

[Crossbar]

He probably should have an idea what is considered a success and since he is doing a game with/for Sony, it might even be similar to what Sony's expectations are.

Yeah, he probably has a better better sense of reality than the posters who thinks a game selling 2.5 million is a failure or not selling to expectations. Those posters have lost some credibility in my eyes.

Keep in mind that article is from July last year, I wouldn´t be surprised if LBP has sold another half million since then after the PS3 slim was announced. I see LBP continuously charting the PS3 top ten list on the online shop I frequent, whatever that is worth.

 

[assen]

With that, I think it is reasonable to think that a title that has produced sequels (especially one that will be in its third iteration or beyond) would have been profitable enough to be considered a "success", regardless of costs.

It all depends on the scale; a sequel bringing half a million of profit on the tails of a sequel bringing a million of profit is hardly a success.

Also, for the purposes of your statement, a sequel is something that reuses significant portions of the effort for the previous installment, e.g. Killzone 2 and MGS4 and Final Fantasy XIII aren't exactly sequels.

 

[Crossbar]

You don't need to fund multi million dollar games all over the world to do that. Look at the lessons learned this gen. First and foremost the Wii, it's #1 because it totally differentiated itself from the other two with entirely new controls that went after an entirely different demographic. They even managed to do that using hardware that predates the cretaceous period. They of course still make their own games, but their costs aren't out of control as they are at some of Sony's studios.

You are a man of strong opnions and that is OK, but it sometimes make it hard to know when to take your statements seriously. If there were any truth to your statements above, we should have seen massive closures of Sonys internal studios worldwide since some time back and going forward, but we haven´t, not a single one if I remember correctly mainly some SCE administration scale down at the time when Sony filed some record losses. You bet that the bean-counters at Sony are just as powerful as the bean-counters at MS or EA who are no strangers to killing game developer studios now and again, (bless them).

If Sony didn´t see the internal and first part studios as good investments they wouldn´t keep them. Stringer has been very effective at closing or selling off manufacturing plants and restructuring Sonys overall business, that Sony has kept their game developer studios tells plenty of how important they think they are to their long term business. You may call Stringer a lot of things, but a fool he is not.

 

[Laa-Yosh]

Factor 5 has closed, and Ninja Theory was let go with no probability for a sequel to Heavenly Sword.
I also know that at least some guys have left SCEE to work on Brink at Splash Damage. Getting exact data on the number of devs at that studio isn't a trivial thing but maybe I'll try to dig up something during the weekend; to put it short layoffs aren't the only way to shrink down the size of a studio.

 

[Silent_Buddha]

Yeah, he probably has a better better sense of reality than the posters who thinks a game selling 2.5 million is a failure or not selling to expectations. Those posters have lost some credibility in my eyes.

Which is completely nonsensical if you don't know the budget for developing the game. Don't know how much was spent on advertising. Don't know how much the division spends on day to day operating costs. Don't know how much much of the MSRP goes to the publisher and how much is for distributors and retailers. Don't know how much is spent on shipping and handling. Etc.

It's quite easy for a game to sell over 2 million and probably still end up costing the parent company money due to not only cost directly associated with the game but also costs for day to day operations of said company.

Likewise, it's quite possible a game might sell 1 million or less units if developement costs is not only low, but there's been a blockbuster released by said company that can cover the day to day operating costs (which are NOT cheap for a large company).

A game with a dev cost of 1-5 million and little to no marketing budget probably doesn't need much to post a profit. Especially if said company also had something like MW2 on the side that has already paid for all day to day operating costs for the entire year.

A game with a dev cost of 20-40 million and a marketing budget in the 5-10 million range and with NO blockbusters among the other games published by the parent company would probably need to sell more than 2-4 million units in the first 3 months to even break even for the company. Since, there's not only high costs to recoup, there's also a higher gamble that must be taken in initial duplication in the hopes that it sells well. Additionally there's no other blockbusters sold by said publishers to cover day to day operating costs which will have to be bourne by all titles sold by the company rather than one title basically paying for it all and giving a free ride for the rest of the titles.

Problems come in if they can't sell many units in the first 3 months if they then have to discount the game in order to move significant numbers of units to try to recoup costs.

Regards,
SB

 

[onanie]

It all depends on the scale; a sequel bringing half a million of profit on the tails of a sequel bringing a million of profit is hardly a success.

Also, for the purposes of your statement, a sequel is something that reuses significant portions of the effort for the previous installment, e.g. Killzone 2 and MGS4 and Final Fantasy XIII aren't exactly sequels.

What I meant was, having a sequel is a surrogate marker for relative success in a title in the majority of circumstances. It is as good as we're going to get with how satisfied a publisher is with the success of a title, without having to make wild guesses about production costs.

 

[onanie]

Which is completely nonsensical if you don't know the budget for developing the game. Don't know how much was spent on advertising. Don't know how much the division spends on day to day operating costs. Don't know how much much of the MSRP goes to the publisher and how much is for distributors and retailers. Don't know how much is spent on shipping and handling. Etc.

Not sure if I've read you right. Why is is completely nonsensical to take the word of a developer over a regular poster on beyond3d?

edit: i have re-read your post and it makes sense now. Thanks.

 

[Silent_Buddha]

What I meant was, having a sequel is a surrogate marker for relative success in a title in the majority of circumstances. It is as good as we're going to get with how satisfied a publisher is with the success of a title, without having to make wild guesses about production costs.

Sequels can also be attempting to recoup the cost of making the original if they think the sequel will sell similarly to the first title that wasn't a success. But with reduced dev cost of basically reusing everything. If they have same sales, the sequel might be successful enough to break even overall and possibly gain a modest profit.

In this case, KZ3 would be a perfect example of this. If it sells in similar numbers to KZ2, but has half or even a quarter of the dev costs, suddenly the potential profit has just sky-rocketed. Despite the fact that the first title may have only broke even or ended up costing the publisher money.

Regards,
SB

 

[onanie]

Factor 5 has closed, and Ninja Theory was let go with no probability for a sequel to Heavenly Sword.
I also know that at least some guys have left SCEE to work on Brink at Splash Damage. Getting exact data on the number of devs at that studio isn't a trivial thing but maybe I'll try to dig up something during the weekend; to put it short layoffs aren't the only way to shrink down the size of a studio.

Doesn't sound like "massive closures" to me.

 

[onanie]

Sequels can also be attempting to recoup the cost of making the original if they think the sequel will sell similarly to the first title that wasn't a success. But with reduced dev cost of basically reusing everything. If they have same sales, the sequel might be successful enough to break even overall and possibly gain a modest profit.

In this case, KZ3 would be a perfect example of this. If it sells in similar numbers to KZ2, but has half or even a quarter of the dev costs, suddenly the potential profit has just sky-rocketed. Despite the fact that the first title may have only broke even or ended up costing the publisher money.

Regards,
SB

Indeed, I can't argue with that.

Nevertheless, the bar is set by the publisher itself, not by a random forum poster. Whether it was a profitable venture or otherwise, a title would have met the publisher's own performance criteria to warrant a sequel. The title would have been successful enough for the task it was set out to do, for it to raise a sequel.

edit: i just wanted to highlight additionally that while we have all been talking about "financial success", all those PS3 games that Laa-Yosh mentioned are inarguably creative successes that are almost universally acclaimed. In the spirit of gaming, really, shouldn't that be something?

 

[Crossbar]

Factor 5 has closed, and Ninja Theory was let go with no probability for a sequel to Heavenly Sword.
I also know that at least some guys have left SCEE to work on Brink at Splash Damage. Getting exact data on the number of devs at that studio isn't a trivial thing but maybe I'll try to dig up something during the weekend; to put it short layoffs aren't the only way to shrink down the size of a studio.

Don´t get your point. Factor 5 was not an internal studio of Sony. I think they were working on a Wii game at the time they closed their busines. Ninja Theory is neither an internal studio of Sony and they are honking on with some multiplat game as far as I know.

 

[Crossbar]

Which is completely nonsensical if you don't know the budget for developing the game. Don't know how much was spent on advertising. Don't know how much the division spends on day to day operating costs. Don't know how much much of the MSRP goes to the publisher and how much is for distributors and retailers. Don't know how much is spent on shipping and handling. Etc.

It's quite easy for a game to sell over 2 million and probably still end up costing the parent company money due to not only cost directly associated with the game but also costs for day to day operations of said company.

Likewise, it's quite possible a game might sell 1 million or less units if developement costs is not only low, but there's been a blockbuster released by said company that can cover the day to day operating costs (which are NOT cheap for a large company).

A game with a dev cost of 1-5 million and little to no marketing budget probably doesn't need much to post a profit. Especially if said company also had something like MW2 on the side that has already paid for all day to day operating costs for the entire year.

A game with a dev cost of 20-40 million and a marketing budget in the 5-10 million range and with NO blockbusters among the other games published by the parent company would probably need to sell more than 2-4 million units in the first 3 months to even break even for the company. Since, there's not only high costs to recoup, there's also a higher gamble that must be taken in initial duplication in the hopes that it sells well. Additionally there's no other blockbusters sold by said publishers to cover day to day operating costs which will have to be bourne by all titles sold by the company rather than one title basically paying for it all and giving a free ride for the rest of the titles.

Problems come in if they can't sell many units in the first 3 months if they then have to discount the game in order to move significant numbers of units to try to recoup costs.

Regards,
SB

Got it. So if you don´t know all the parameters that you list above it makes sense to assume that a game selling 2.5 million is a failure. Per se we should assume that all games selling 2.5 million are failures.

By the way, you missed payed DLC in your list of unknown parameters.

 

[deeFive]

i just want to add my 2p, i think that sony's gameplan will work for them long term as we seem to be moving from colsoles just being consoles to being set top boxes with "gaming channels" with sony now in the process of replacing nintendo in making the best/highest quality HD games and creating ip's that will be very helpful next get hype wise, as for "financial success" i think that the PS3 has not hit the £150 golden spot yet, where people will just get them to play a key titles and they havent had a big uni/dorm game i.e. halo 3 (which seems to huge arround the uk which ever campus i go to i can normaly find a halo lan running!).

But at the same times there are things that they have gotten worng, like the fact that allmost all off the key titles on ps3 seems to be solo only/online which makes word of mouth difficult when you have a mate/s over to play games they have to sit and watch you where as xbox games tend to have better local modes or co-op/co-op online but all of the people that i have sat and gamed with all say that KZ2 looks better that game x(including cod6) but want to play something else as they want to play as well.

Another thing is that while the ps3 is a amazing network console, with the best (imo) stanard media support, web broswer, UI (again imo) and controler (once more imo but i can only play FPS and driving games on 360, but i also like adventure and fighting games as well). PSN is still not where it need to be in order to fully complete with xblive, the thing that people notice when playing ps3 at my house is how complex some basic things are to do, chat being the first thing that they notice then Parties (so that they can call each other slag while playing cod or watching skyplayer).

but over all im happy with the way that its playing out, with GT now replacing Zelda in terms of hype and i have also notice that all of my geek peeps (or super hardcore gamers) have all gotten ps3's as well so if i were sony i would try to get some small hardcore games on psn as excluvises (i would like VF5r online firsty followed by a 4 player spilt screen co-op online sequal to warhawk!) and try to work down to the magic £150 price point as once they are there, so long as they get there before xbox next is announced they are very very strong psotiton the eat away at MS's lead very quickly!

 

[assen]

...with sony now in the process of replacing nintendo in making the best/highest quality HD games...

At what point in time was Nintendo making the best/highest quality HD games?

 

[deeFive]

during the nes/snes era and to a certan extent the n64 time period, or i at least remember it that way, when nintendo's in house teams have had hardware that was in the same leaague as its main rivals it has produced AAA visual titles (but we should continue this in another thread...)

 

[Laa-Yosh]

Got it. So if you don´t know all the parameters that you list above it makes sense to assume that a game selling 2.5 million is a failure.

Would you please stop twisting around what we say?

The argument is that most Sony exclusive titles have failed to meet sales expectations, to variable degrees. Don't try to put anything else behind it.

 

[Laa-Yosh]

Don´t get your point.

Both were working on PS3 exclusives that have so obviously failed to meet even Sony's expectations that there were immediate consequences. Neither were contracted for any other exclusive titles and F5 wasn't even able to get funding for a next HD title (but Ninja Theory did).

 

[Laa-Yosh]

Nevertheless, the bar is set by the publisher itself, not by a random forum poster. Whether it was a profitable venture or otherwise, a title would have met the publisher's own performance criteria to warrant a sequel.

All I've been talking about is general expectations and not just mine. In the months before the release of practically any PS3 exclusive, all the sales and games related threads even on this forum were full of how KZ2 / UC2 / MGS4 / whatever is going to be the next big thing, dominating sales charts and moving mountains of PS3s, and sometimes with how the current or upcoming big X360 title is going to be nothing.

Then the monthly NPD results were published and the highly expected PS3 titles were on the bottom end of the sales charts (with Nintendo and MS taking turns in dominating the top). So the people praising Sony's exclusives in advance have - in a nice display of cognitive dissonance - moved on to talk about the next upcoming PS3 exclusive. This has happened several times and the only exception was MGS4.
(Oh, and in some cases everyone was expecting some games to come up at the top of the monthly charts, like with KZ2...)

This is what I've made the apparently fatal mistake of calling attention to. Obviously, I should have expected the very same people to vehemently deny this phenomenon in retrospect.

 

[deeFive]

All I've been talking about is general expectations and not just mine. In the months before the release of practically any PS3 exclusive, all the sales and games related threads even on this forum were full of how KZ2 / UC2 / MGS4 / whatever is going to be the next big thing, dominating sales charts and moving mountains of PS3s, and sometimes with how the current or upcoming big X360 title is going to be nothing.

Then the monthly NPD results were published and the highly expected PS3 titles were on the bottom end of the sales charts (with Nintendo and MS taking turns in dominating the top). So the people praising Sony's exclusives in advance have - in a nice display of cognitive dissonance - moved on to talk about the next upcoming PS3 exclusive. This has happened several times and the only exception was MGS4.
(Oh, and in some cases everyone was expecting some games to come up at the top of the monthly charts, like with KZ2...)

This is what I've made the apparently fatal mistake of calling attention to. Obviously, I should have expected the very same people to vehemently deny this phenomenon in retrospect.

Part of this is that people still think that there will be a big PS3 comeback where the ps brand regains its place as the dominate brand, not going to happen imo i think it will end up 40/40/20 with nintendos cash grab comming back to bite them but fixed by Wii/DS hd.

and in terms of profit CoD and xbLive are the only out and out winners so far the other tiles dont realy match up (i dont think reach will do mw2 numbers and i think GT5 will out sell forza 2 &3 combined)