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Do you know publishers only make 1 dollar per game?

How come Uncharted and Assassin's Creed cost 60 dollars, while Super Mario Galaxy cost 50 dollars on the Wii? The first answer jumps to mind is "lower development" cost, but what does that mean? Do you know when Konami publishes a game like MGS, they only make 1 dollar per game? Here is a breakdown of who's taking a bite out of your pocket pie this Christmas.

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kss3356d ago

wow really! thats not good, i mean most games sell less than a million copies thats a million dollar profit for the publishers. that sucks...

ruibing3356d ago

If publishers only make $1 per game, isn't that just their return on their investment made to the developers?

fenderputty3356d ago (Edited 3356d ago )

nevermind

JsonHenry3356d ago

Note that the Publisher is NOT the developer. Publishers (or the publishing part of the parent company) do not have the same type of overhead that a development studio has.

And don't feel sorry for them either - if they were not making money then they would not be in business. And the "bottom line" remarks (if I am reading it correctly) are profit. Meeting operating cost is something altogether different than profit.

JsonHenry3356d ago

One thing to note - I don't EVER want to hear PS3 fanboys saying that Microsoft pays for its exclusive titles. Because the PS3 does the same thing by not charging fees for using the Blu-Ray DVD drive in the PS3 if the game is exclusive to Sony's platform. EVERY company gives incentives to try to obtain exclusivity. Not just Microsoft.

Gamespot-equals-EGM3356d ago (Edited 3356d ago )

You guys are going to hate me for saying this but game developers need to outsource more of their work.

THERE'S NOT ENOUGH ***GOOD*** PROGRAMMERS AND ARTISTS IN ***DEVELOPED*** NATIONS to affordably develop games. Art design and programming takes up 45% of the budget (according to this article)- a lot of that work can be outsourced.

I know games development is a creative process and bridging the cultural barrier is tough when working with Indian/Chinese/Filipino/Vietna mese programmers but I think the game industry needs to find a way to get it done. The solution is there, game developers and game publishers need to find a way to make it work.

Gina-get-u3356d ago (Edited 3356d ago )

The article fails to point out that many of those "slices" tend to shrink or grow depending on the number of games sold. For example, whether you sell 1 million or 10 million units, the development, corporate, hardware development costs will remain fixed. The slices that would tend to stay the same are those costs that increase in lock step with unit sales, such as the console owner fee and the manufacturing/packaging costs. So as the number of units sold increases, the profit per unit should increase also. A multi-million seller like Halo 3 or COD4 can probably generate $8-10.00 in profit per unit, while a dud like Lair may not even cover its development costs.

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Daver3356d ago

cool i always wanted to know that

DrWan3356d ago

Publishers and "developers" are two different things. Obviously if you have an existing engine to work on, your cost will be cheaper, if you read into the article. Alot of these "costs" are just estimates and may vary, the more efficient a developer is, the more money it makes.

I guess example would be Resistance fall of man which uses a engine that was new and cost to develop but Ratchet build upon that engine, and later Resistance 2 will also contribute. I think things will even out that way

Gina-get-u3356d ago (Edited 3356d ago )

I question the accuracy of these figures. If these are correct, it makes more economic sense for a developer to make console-exclusives instead of going multi-plat. For example, if MGS4 went multiplat, Konami would make 1$ per unit on both the 360 and PS3 versions. But if Sony waives the console fee to entice Konami to keep it PS3 exclusive, then Konami can make $7.00 per unit, and would have to sell just one-seventh the number of units to make the same amount of money. Even if Sony just waived $2.00, that would effectively triple what Konami makes per unit sold. In addition, Konami could avoid the risk of additional investment necessary to port the title to the 360. Of course, this kind of sweet deal would only be available for titles that would move hardware sales, and would be more common at the beginning of the cycle when the console numbers are low and need building up. But the fact that exclusives seem to be going out of style lately tells me that something is not quite right with the pie.

Also, how much of these expenses are capitalized costs? I don't expect Ubisoft to spend the same amount of development dollars on the sequel to Assassin's Creed, because they can re-use the graphics engine with just minor tweaking, and the same engine will no doubt also be used on the next Prince of Persia and Splinter Cell. (They should probably spend a bit more to improve the AI next time.)

Capt CHAOS3356d ago

If a publisher sells a total of 50 million games a year, that's still 50 million profit, i.e. Money in the pocket. However, I think that figure is still pants - i.e. I doubt it.

Gamespot-equals-EGM3356d ago

Dude, you make it sound like its easy to sell 50 million games a year. Only a handful of companies can do that (EA, Nintendo, etc). Most developers and publishers don't come close to selling 50 million games per year IMO.

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