The Witcher - 1M Sold - the Secret to PC Success
 

Edge Online talks to CD Projekt co-founder Michal Kicinski about their success with The Witcher with a relatively unknown IP and only on the PC. Not pandering to the mainstream is one of the answers:
More information.

Hopefully, other companies will learn from this.

I don't know if anyone pointed this out (seems pretty likely), but they also bundled this game with like one out of every three video cards sold in the past year. I remember that from when I overpaid for my 4850. So if those count as sales, then that's one of their "secrets" right there.

I quite strongly believe that one of the "secrets" is that it wanted to stand alone in the crowd, the game wanted to be kind of different.

And of course the novels, which I think can't be underestimated.

Bravo! Hopefully they'll keep growing and be the Bioware of Europe.

Somewhere recently someone posted that they thought the game lost money. Not according to this - $11 million invested, sold a million copies for around $45 average - I'd say that's a nice profit even with publisher and retail cuts.

Stardock did mention this as to why they manage to make games without copyprotections - and don't loose money.

You shouldn't count the amounts of PCs out there, you should realize your market and then make a realistic budget to reach that market.

Good to see that CD project has some sound business minds, and do not consist with self bloated game designers wanting to design the perfect game! :)

Chris Robert already did that with Wing Commander III!

Well, there's also the cost of advertising, the cost of the Witcher license… but I believe they just about broke even.

the secret is this - it's a great game!

There's a concept!

Few things that Id say might make witcher a great seller:

(1) Polish fans
(2) Lots of content (google says 48 - 120 hours?)
(3) Cheap price (EE edition)
(4) Moddability & patches.
(5) Hype & adds & community (peer pressure)
(6) Quality of game / reviews / etc
(7) Sex
(8) Decent story (its not totally rubbish)

Been great alone does not sell i.e System Shock2 is a good example.

It's a good point, but it won't change anything.

Most companies are not out to break even or limit their profit by delivering the best product, instead of the most accessible - they're out to maximise profit.

That's why they want to appeal to everyone.

It's hardly a secret that profit in itself is the primary motivator for most people, especially in the US - where capitalism is the way of life.

Oh, CDP does want to make profit--but they intended the first game to "pay for itself," introduce the IP, that kind of thing. They expect to make the real money on sequels or possibly expansion packs.

Nothing wrong with wanting to make money, in any case, as long as the product they push out justifies it.

At least *some* profits are needed - just to pay the developers themselves so that they can have a meal every day and able to pay the rent of their appartments. For example.

Remember that the $11 million was spent when the $ was worth only two thirds of what it's worth now. If the figure was calculated now, the cost would be perhaps $7-8 million. So it's hard to speculate about any kind of profit - especially since I guess this is a part of a larger project which is to become profitable in the long run while it's being financed by CDP's distributive branch.

Yes, but they clearly didn't try to maximise their profit - which makes them a rarity.

Oh, and as to whether there's nothing wrong with wanting to make money, I think you pointed out the defining factor in that last bit of your sentence.

Assuming an average price of 30$ (the original version sells for ca. 20$ now) I would assume both Paradox and CD Project made a tidy profit, even assuming the publishers cost for manufacturing distribution and advertising were not included in the $11M figure. More importantly it will likely give them some leverage with the publishers for their upcoming project - of course the downside is that with more money invested the pressure to become more mainstream may also increase. We will see.

Not sure about that, it is easier to make a relatively good product if you narrow your focus, as the competition is less fierce. The optimization problem is not quite as straightforward as "broader appeal" == "higher profit". Going for a wider audience also increase the risk of bad reviews as you might give people something they didnt expect. In some ways it is harder to make something broad and accessible.

There's not much about making a game that's easy.

I don't look at it in terms of broad appeal = bad, limited appeal = good.

Also, I'm not talking about games of poor quality here. A game like, say, Doom 3 isn't bad at all. It's a top-notch quality product.

But if you want to appeal to the mass market, you'll face a different kind of challenge. To succeed, you'll first have to ensure that production values are very high, and then you have to market your game aggressively.

To appeal to a limited audience, you'll have the kind of challenge that's more about actual game design and what I would personally relate to purer art. The more subjective the angle of approach is, the closer you get to actual art. But that's not necessarily "better". A game that's tailored to my tastes is better for me, but it's not objectively better - especially not to a business looking to maximise profit.

That said, I DO think it's a lot easier to appeal wide than to stand-out with a narrow audience. You're not looking to simply sell, you're looking to have a lasting respect based on the word-of-mouth of enthusiasts.

Agree that the challenge is different rather than easier per se. What I think you ignore in your posts is the lower amount of competition in niche markets that I was trying to get to with "making a relatively good product". That is of course provided one picks a niche that isnt too crowded…

And of course I was looking at it from a profit angle, I've long argued that game development mainly should be compared to the movie industry and other mature entertainment industries, not to art. The devs need to put food on the table like everybody else:) But I am not sure that going for a broad appeal is always the way to max out profit if everybody else already is doing that. Returns can very well be better if you corner an underexploited niche market, even if the ceiling for potential sales is lower.

I'm not sure how I'm ignoring the competition aspect. I'm simply not seeing its relevance to this discussion. I'm not awarding points for doing hard things, I'm simply observing the differences between the various approaches to game creation.

However, if you target a niche market and you price your game as a non-budget title, you damn well better deliver if you want a big return. That's the whole point of this The Witcher success story, because they DID deliver and there was nothing easy about that.

You don't get a big return by turning out mediocre titles to niche markets - you simply stay afloat. That's why it's easier to get rich by appealing wide, than getting rich by standing out in the niche markets.

But I'd agree that staying afloat with a limited audience is about as hard as appealing wide. The difference is in the size of the investment. You pay more to get more, so to speak. The investment also includes the marketing budget, of course, and titles that appeal wide typically sell because of how they were marketed and the hype they generate with the money they put into it. Niche games sell because people actually want to play them - not because they think they want to play them. Black and white articulation, granted, but that's the gist of my point.

I have no problem with comparing the gaming industry to the movie industry, and indeed I've made direct comparisons between the two very often. I also think that art is a factor in all these industries - and there's no sense in excluding it because we're talking about a business.

But putting food on the table is a very weak reason for maximising profit, just as I see endless acquisition of material goods that you don't need to be rather senseless. It's an obsession with this idea that "more is always better" that I personally can't relate to. To me, there's only so much you need as a human being - and only so much luxury that will make a notable difference. When you look at the profit generated by a blockbuster movie, we're moving into a land of madness. We live in a world where resources are so unevenly divided and so many people are suffering because they don't have access to them, that I can't celebrate the acquisition of wealth as a worthwhile goal in itself.

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)