I just want to point out that it might be a nice profit; I don't think that CD Project made that much money from it. They needed money to pay Bioware for the use of the Aurora engine, Atari to publish the game and probably a lot more. Sales are usually measured against future royalties. Atari would then give CD Project 11 US million dollars. 1 Million US dollars times 40 US dollars is 40 million dollars.

CD Project does not get these 40 million US dollars. They might get 10% or 20% in royalties. If they get 20% in royalties this means they get 8 million US dollars. There still is now 3 million US dollars in debt to Atari since the game cost 11 million US dollars to develop. If we then take into account that the dollar's value on the currency market has gone down to 2/3 of what it were, when The Witcher first was announced, then yes, the cost could well be around 8 million US dollars.

This means they just barely broke even.

However, they have established a base, people who support them and probably will be buying CD Projects games for a very long time. And this, to me, is the key, to succes… along with being one of kind, a purple cow, something

outstanding

While I agree CDP didn't even get close to the 40M$, your argumentation has a serious flaw. For all we know Atari did not pay the development. There is nothing they have to recoup. They can demand a slice of the pie because they do publishing, some marketing and the distribution. I doubt it's bigger than the rsik they took, which is their investment relative to CDP's 11M$. Otherwise CDP would have chosen a distribution option which would have secured them everything minus a small fee for moving the boxes.

Atari only came on board late (Feb 7 2007) in the piece so it was almost certainly self funded primarily, and Atari would likely not be getting as much as a standard publisher deal though more than a pure distributor deal.

CDP also published the Polish version themselves and would have made a tidy amount from each sale there (IIRC Ausir said it was selling for the equivalent of 50USD), the only sales likely to have been 'low value' were the CIS ones.

SS2 sold fine. From Ken Levine it sold around 200-220k in its first six months, and from Desslock it sold 75k in its second year, in NA alone and not even counting all the sales there. Since the standard measure of profitability at the time was shipping 100k units, and SS2 was cheap to make (estimate 2 million USD; small team, no licencing costs, barely over a year dev time) it would have returned millions. Sadly most of that would have gone to EA, who at the time were busy nailing shut the coffins of every project and studio with so much as a semblance of originality.

If the dev costs were small I guess its possible that som profit was made (20-25€ * 200k ~ 4-5mil) but for big company like EA it was still propably a failure - they expected far more than average sales from a game of established series that got high scores and awards. A new title called half-life that was simpler in its elements was released year earlier and it sold 8 million - ss2 didnt even brake 10th of that.

Grim Fandango sold only ~100k 1998 and it spelled the end of adventure games for lucasarts. At the time of system shock2 simpler 2d/3d action games like diablo/quake shooters sold millions. In the turn of 2000 consoles had 100s of games that sold from one to up to 11 million units. Compared to this som ss2 that sold 200k in 1999 is "small fish" to say the least.

The high scores and awards that the game got propably only made it worse since it had only average sales. For EA it propably looked like a dead end. If an established series (with fans) gets superb scores/awards and cant sell more than an average game (200k) then the fault is propably in the series/genre itself. In larger scale people didnt buy system shock kind of rpg/fps hybridgames - they invested their moneys on starfoxes, diablos, rts clones and 3d shooters instead.

My 2d is that while 1m sales is nothing to be scoffed at, the costs are VERY high and I don't think 1m would be enough to make much profit, if anything. However, this was not funded so much on credit with publishers etc, but was largely self funded, so they have really minimised their loses while establishing a new gaming IP that itself will have a significant monetry worth.

Future titles will make the profit, and they have even more negotiating power (even though they had more or less complete freedom before anyway).

I guess what I don't understand is why everyone's tacking on these "additional charges" to the $11 million figure given by CD Projekt. It said 11 million spent to develop the game. Wouldn't that include the cost of the engine and licensing? How exactly does it not? Okay marketing I can understand likely isn't factored into that 11 mil, but it seems like everything else would be to me. Otherwise that's like saying "I spent $5.00 for a combo meal" and someone asking, "yeah, but how much did the fries cost?"

It's a sad world we live in when a game developer invests 11 million + advertising (which surely can't be more than the game development itself), then have their product sell $45 million in volume and they still can't make a profit. - I just don't buy that scenario.

How much do they make from each copy sold in a shop? And what was the average selling price? I find it very hard to believe that each of those 1m copies went for the full $45. If the average selling price was nearer $30 then they'd have to be taking home nearly 50% of the box price at shops. Maybe devs get better deals than I expected, but that seems like quite a large slice.

let's not forget that even if they broke even (which I highly doubt, they certainly made a lot of money), they now have:
1- The know-how
2- The modified engine
3- Art
4- Word of mouth
Having 1) 2) makes it so they can create completely new games in a fraction of time with a fraction of the cost. Having also 3) makes it so they can add expansions or sequels to this same game in a fraction of time with a fraction of the cost. Having 4) makes it so they can spend just a fraction in marketing for sequels.

I just hope EA doesn't come and offers them $100M for their company, that'd be the end of it all.

Somewhat OT, but I guess this is generally relevant to a lot of the discussion of The Witcher's sales figures I've seen.

As always it depends how you measure things. Being a failure relative to Halflife/ Quake/ Diablo is, well, very much a relative failure, and much like being less successful than Titanic/ Star Wars/ LotR in movies, is one shared by 99.5% of games not called Halflife/ Quake/ Diablo. Comparisons to the very top end in anything are always unfair, by that measure pretty much all EA's titles are failures except The Sims and Madden, and such comparisons can 'prove' all sorts of odd things (Mass Effect was a failure! It sold far less than Diablo, a 12 year old game! Bioshock was a failure! It sold far less than Halflife, a 10 year old game!). SS2 almost certainly made more on a Return On Investment basis than, say, the acknowledged 'blockbuster' Bioshock, because Bioshock cost 10-15x more ($20-30+MUSD and 4x the amount of time) to make and market than SS2 but 'only' sold around 7x as much.

Not that ROI is a particularly fair measure either, as you can use that to 'prove' that the most successful non casual non-WOW game of the recent past is Sins of a Solar Empire ($1MUSD cost, 500k sales ~900% Return On Investment), but suffice it to say that in most industries recouping around 6 million dollars from a 2 million dollar investment would be considered pretty good, and it's certainly not the failure SS2 is usually painted as. Even today and despite all the consolidation in the industry over the last few years most games still lose money.

In a recent interview, Michał Kiciński of CDP stated that they *almost* broke even. However, the losses are so small they are insignificant, and that in the following months they expect to make a profit from further licensing. He also said that the most important thing to them was to avoid losses, as this was their first game; the amount of the extra profit didn't matter as much.

(Interview available here, but it's all in Polish)