What is the impact of no PS3 price drop?

[Silent_Buddha]

I believe the 10 dollars per disc pressed is if MS/Sony published the game and thus handled pressing/duplication/etc...

For 3rd party titles that handle all that themselves, it's on a per title basis.

Regards,
SB

 

[ban25]

I believe the 10 dollars per disc pressed is if MS/Sony published the game and thus handled pressing/duplication/etc...

For 3rd party titles that handle all that themselves, it's on a per title basis.

Regards,
SB

Disc replication is handled through the console manufacturers.

 

[Shifty Geezer]

I believe the 10 dollars per disc pressed is if MS/Sony published the game and thus handled pressing/duplication/etc...

For 3rd party titles that handle all that themselves, it's on a per title basis.

Can you tell me where you got this info? My understanding of the fee system came from developers. And ban25 explains the reason, which is actually sensible. The system is a fee to the console company, then the publisher takings which is a bonus to MS/Sony/Nintendo published titles making them far more profitable. Retail have their cut. The amount the develop gets is a small slice, but that's the cost of going to a publisher to put up the money and take on the risk of investment. I doubt we'll know the real figures, but I'll be surprised if a developer gets as much as £5 on a full-price retail game. However, that's just me guessing! I've never heard anything about the deals between publishers, developers, and royalties.

 

[Silent_Buddha]

I wouldn't be surprised if it was that or less. Considering most times the publisher has already fronted money for developement. It's possible maybe royalties would go up after the publisher has recouped it's initial investment, but the more likely situation is that the title goes into the bargain segment around that time.

There's also a possibility that the developer gets no royalties until the investment from the publisher has been recouped (IE - after a certain number of titles have sold).

After all, unless the developer (like ID/Epic for example) fund their own developement, then the publisher is taking on most of the risk.

Oh and I don't remember where I got the info from. This was years ago during the XBOX years where I came across it.

Regards,
SB

 

[MrFloopy]

There's also a possibility that the developer gets no royalties until the investment from the publisher has been recouped (IE - after a certain number of titles have sold).

It can be worse than that. Standard deals usually start with around 10% of wholesale price going to the developer in royalties. But these are used to pay off any advances (i.e. development costs) paid to the developer before the developer receives any royalty.

So if development cost is $10 million and royalty rate is 10% of US$40 wholesale ($4.00) then you need to sell 2.5 million units to get any royalties.

Now that's the kind of deal a no name developer will attract. More experienced teams will get higher rates but usually no more than about 15%. Where they do get a break though is that they could negotiate a deal where they receive royalties once total net receipts on the game equal development costs.

If the game is self funded then royalties are at a higher rate and paid immediately.

Remember though that the publisher can spend up to 4 times the development costs on Marketing. Dev costs are usually mush less than the marketing cost, which is why a publisher may kill a game even after it's gone gold.

If you want to find out more try gamasutra, they have a lot of articles of these topics.