D
DArtagnan
Guest
What's this - sky is falling again already?
I'll start building my shelter right now!
I'll start building my shelter right now!
The costs of the game which include development, marketing and distribution.
I disagree, there has been many quality adventures and strategies that are PC exclusive in recent years, and that market is growing(paradox strategies for instance have incised sale each year,same thing goes Relic,Ironcald games and lot other strategy developers),and now new wave of PC exclusive RPGs coming, some of those game are innovative.Are they pushing hardware limits,no(well maybe Company of heroes 2 and Sui generis and star citizen but it's hard to tell before they actually come out ),but they don't really need to except for good graphic which is always nice but not really essential.
What concerns me is that PC today live on four constellations, the loss of any of these have severe impact on the platform:
* Intel CPU's (under threat)
* Windows OS (under threat)
* Nvidia / ATI (no great need to upgrade anymore)
* Steam (depends on the hardware)
In particular the first two are my most major concerns and one of the great reasons for the windows mess is the change of focus into restricting the user and reducing user-choices and instead control the platform and it's content. From it's DRM-schemes to XBox they are basically going apple, attempting to control a market which openness, adaptability and diversity was it's greatest survivability. By becoming an AAA-product rather than a platform it lost it's appeal and vision.
It may therefore be ironic, that the XB1 is a nail to the coffin, not for PC, not for XB1 but for Microsoft.
Without the platform, most things discussed in here is moot. They all rely on PC as an open tool. But it's continued centralization into Microsoft and Intel and an increasingly top-down attitude, is basically the computer edition of the Soviet Union.
You really have no clue, just a mindless "PC gaming R dead" straw man, eh? I am sorry, but you are clearly a troll and not worth the time if I have to explain basic game economics.
There are a few strongholds left for the moment as mentioned earlier.
Paradox by the way dabs into the console and tablet (or similar) markets.
At the moment, RPG and innovative seem exclusive.
Way too early to proclaim PC gaming dead but AAA PC gaming is going to take a huge hit. We will be bombarded with a slew of console exclusives and I believe we can only hope that some of those will merely be timed exclusives instead of all-out exclusive.
Publishers dont get the billion dollar gross. They get 80% of that because retailers get a cut too. But basically yeah they need the billion dollar gross to break even.
So 800 million gross is not enough to break even?
For the companies that do put next-generation titles out early, making a profit is tough. Namco Bandai president Takeo Takasu said his company needs to sell at least 500,000 copies of each PlayStation 3 game it creates to make a profit. Analysts predict that some other publishers will need to clear 1 million units to get in the black—and start making about $1 per game sold.
Meaning : Those who actually DO the game get the LEAST amount of money from it ?
They tried that in my hometown last year and everything they sold was bought. Lines of people waiting to buy were hundreds of meters long. Prices were 5-10 times cheaper than normally here. Some of the pricesI bet that this will lead - one day in the future - into a more "localized" form of business : Farmers no longer selling to those who give them only so little amounts of money - but to the consumer directly. By passing the distribution channels and marketing completely.
And they will not be covered by a billion dollar gross?
Yeah, but it isn't like they are enslaved. If they wanted to do a game all by themselves for PC and sell it on their own website, they could. They don't because $9 x 2,000,000 copies is way more than $30 x 15,000 copies.Meaning : Those who actually DO the game get the LEAST amount of money from it ?
Depending on what their definition of minimum acceptable return on investment is, then from a cashflow analysis view - not necessarily. When considering spending on a project against other ways in which those resources could have been invested, a minimum acceptable return on investment is considered as a way of comparing the project's profitability against what might substitute effectively for the alternative of "doing nothing" instead. While effectively arbitrary, using the lipper large-cap core mutual fund average as the minimum acceptable return is a decent benchmark. That is to say, if it would have been more profitable to simply dump all that money into a broad selection of mutual funds instead of engaging in an enterprise then the enterprise looks to be a worse way of investing those resources.
At a developer cut of $25 per full priced game and, extending that ratio through to games sold at a discount, a $1 billion grossing game would net the publish about $362 million. Considering COD:MW2 had a launch budget estimated to be about $200 million including marketing and other costs (development only made up $40-50 million of that), a gross of about $1 billion would likely correspond to an extremely profitable game and well exceeding the company's minimum acceptable return on investment.
Now this is where things get interesting and the choice of a reasonable minimum acceptable return on investment really matters. Over the past two years through this month, the lipper large-cap core mutual fund average (effectively representing what a broadly diversified and relatively conservative investment across many large-cap mutual funds would look like) would be about 17.5% while some more specific averages over that period are closer to 25%.
A game with a total launch budget of 200 million grossing 1 billion is pretty safely worthwhile under most considerations with an mROI within that range. If, however, a game with a budget closer to $300 million spent over the last two years were to be released today then whether or not a large AAA firm like EA would see it as having been a worthwhile investment depends strongly on what the consider the minimum acceptable return for that period and on which side of $300 million it ended up costing them. If a company had looked at the sales history of a franchise like Call of Duty, they might have been convinced going in that $350 million was not a risky investment. In the present environment and in comparison to the performance of other markets in the past two years, these large AAA budgets (the vast majority of which consists of marketing and non-development costs) seem far riskier.
These sorts of cashflow analysis considerations would be done by large privately held companies whose owners hold them as investments as well as publicly traded companies. Publicly traded companies would also have to consider profit projections and so a big budget title would also need to at least come very close to come close to meeting expectations to not be seen as a misstep in a certain light. In the cases where a title was the latest entry in a long series of highly profitable successes, that franchise history would inform expectations and could well produce projected profits well above what a broader mROI might look like.
Yeah, but it isn't like they are enslaved. If they wanted to do a game all by themselves for PC and sell it on their own website, they could. They don't because $9 x 2,000,000 copies is way more than $30 x 15,000 copies.