week 1: estimated sales

[Goffs]

Quote: Originally Posted by quietcool72

Well, at the very least we see that APF2K8 has more legs than 2k's arcade baseball game. I STILL don't understand why they made The Bigs. MLB2K7 was arcade baseball (at least out-of-the box with default sliders.)

agreed i just dont understand the logic with the Bigs...

[aholbert32]

Quote: Originally Posted by GTheorenHobbes

I don't think being the #2 selling game on the 360 is anything to be ashamed of. Naturally a lot of EA/madden fans are going to criticize the numbers but we could've expected that.

I'm not a Madden fan but I dont know how anybody could see this as anything but a dissapointment. Video games are just like CDs and Movies in that they usually sell most of their games in the first week. That number isnt going to be higher unless they drop the price soon. The best they can hope for is that the weekly sales will stay in the 30-40k range. 70 grand on both systems combined is much less than I'm sure 2k expected.

[Trevytrev11]

Quote: Originally Posted by mugginns

What you and most other armchair marketers don't know is what kind of financing they're looking at. Are they aiming to sell 200k copies of this game? Are they aiming to sell 1 million? It is always great to the cheap video gamers to have games be cheap. Is it really viable though? Are they going to make money back by selling this thing at 59? Probably. Are they making a product they can show to investors who want to help them buy the NFL license in whatever year its up? YES. YES.

Look, I'm not going get deep into what I do for a living, but I do work closely with the marketing group of a large retail chain. So while I may not know it all, I have a pretty deep concept of how that department works. I'm sure it differs in every industry, but the fundamentals are usually the same.

Obviously, we don't know what kind of costs went into this game and what kind of sales they need to turn a profit or even to minimize their losses. A lot of time the expectations of a product isn't to turn a profit, but to gain a customer base that will help you profit in the long run.

We also cannot ignore basic supply and demand. And I can't imagine that the demand for a game that lacks a lot of "stuff" that other games have is the same at $60 as it is for other similar products. I mean if your Coke and trying to sell a 6 pack of soda for the same price that Pepsi is selling their twelve pack, chance are you'r going to capture the sales of pure Coke lovers, but those that stand somewhere in the middle are going to get the most for their dollar.

SO they can sell 100,000 copies at $60 or sell 150,000 copies at $40. There will be slightly higher incremental costs with the extra 50,000 copies, but you just got your product in the hands of 50,000 extra people, who if they like your product, will have no problem forking out full price for the game the next year.

My guess, is that 2K is going to lose a ton of $$$ on this game. They already stated that some of these legends were paid six figures to be in this game. And while that is only probably a handful of players, that definately impacts the bottom line. Say they averaged $10K per signee. That is $2.4M they paid alone in licenses. Typically a game gets sold to a retailer and the retailer marks it up 10-15%. So take the low number here and 2K, at best, sold this game for $54 to the retailers. So at $54, 2K has to sell about 45,000 copies just to recoup what it paid for the licenses of the players. Plus salaries, shipping and packaging fee's, minimal marketing fee's (but it does cost $$ to put the posters up in stores and get airtime on TV). Even if Take2 covers all of the other SG&A stuff, this game still needs to sell a ton of copies to actually turn a profit.

So, why not short the price, get the game into the hands of as many people as possible and shoot for the moon the following year, when the game is still fresh in peoples minds...not 3 years down the road with a different name, different packaging and price tag that is $40 higher than the last instance.

It's funny, a lot of people remember 2K5 because of the $19.99 price tag. It's even mentioned in some of the reviews for 2K8.

[Radja]

Quote: Originally Posted by mugginns

What you and most other armchair marketers don't know is what kind of financing they're looking at. Are they aiming to sell 200k copies of this game? Are they aiming to sell 1 million? It is always great to the cheap video gamers to have games be cheap. Is it really viable though? Are they going to make money back by selling this thing at 59? Probably. Are they making a product they can show to investors who want to help them buy the NFL license in whatever year its up? YES. YES.

also, how much do they need to make a profit? no one really knows what 2k spent on development and advertising. so where is the magic number when they start making money? 100,00 copies, 200,000. or is it only 50,000 because they didn't have a large staff or much marketing. this may not be true in the video game industry, but depending on how you work it there are times you can make as much profit, or at least proportionally better profit, as a larger company with more overall sales but higher operating costs.

in a small business many think by growing it automatically means more money. however, there are points when you grow and take a significant pay cut due to start up costs for your infrastructure to support more employees and operating costs. your employees may temporarily make more money than you.

so comparing ea to 2k is not always so cut and dry. to quote the genius that is the mind of the nba, EA needs to make a lot of money because they spend a lot of money. 2k likely does not need to make near the cash ea does to keep their doors open right now.

[Radja]

Quote: Originally Posted by Trevytrev11

My guess, is that 2K is going to lose a ton of $$$ on this game. They already stated that some of these legends were paid six figures to be in this game. And while that is only probably a handful of players, that definately impacts the bottom line. Say they averaged $10K per signee. That is $2.4M they paid alone in licenses. Typically a game gets sold to a retailer and the retailer marks it up 10-15%. So take the low number here and 2K, at best, sold this game for $54 to the retailers. So at $54, 2K has to sell about 45,000 copies just to recoup what it paid for the licenses of the players. Plus salaries, shipping and packaging fee's, minimal marketing fee's (but it does cost $$ to put the posters up in stores and get airtime on TV). Even if Take2 covers all of the other SG&A stuff, this game still needs to sell a ton of copies to actually turn a profit.

good point. i totally forgot about the $$ spent on the legends. however, i believe that they are multi-year deals so they will be producing another game to help make up for that.

[Trevytrev11]

Quote: Originally Posted by aholbert32

I'm not a Madden fan but I dont know how anybody could see this as anything but a dissapointment. Video games are just like CDs and Movies in that they usually sell most of their games in the first week. That number isnt going to be higher unless they drop the price soon. The best they can hope for is that the weekly sales will stay in the 30-40k range. 70 grand on both systems combined is much less than I'm sure 2k expected.

Exaclty....unless a CD or Movie gets some unexpected press, the unit trend of these items is pretty much alway a line that starts high on the left and goes down as it moves to the right.

Company's don't spend money hyping/marketing old products. Look at movies. They preview and trailer the hell out of a movie up until the release date and then they pull back swiftly. Within a week or two of it's release, you never hear another thing about them. Look at Transformers. The commercial was on damn near every 15 minutes and now I don't think i've seen one in a few days.

Now in 3 or 4 months when it comes out on DVD, you'll see some hype again as they will try to move DVD units.

[Behindshadows]

Quote: Originally Posted by dQbell

They have to lower the price of this game. If this game is going to have legs on the shelves, they have to have some type of external pull. That would be a lesser price.

Lowering the price would be suicide....

And very stupid. Especially when there are so many crappy games on the 360, that remain $59.99.

This isn't a bad game, and we need to stop labeling the whole, it doesn't have the NFL bs.....who cares..its a great playing football game.

This game sold out everyone here in Dallas, and was restocked in 2 days...

Problem is 2k didn't ship many on day 1.

Most stores got around 42 to 48 copies of NCAA 08
And 14 copies of All Pro per store....

The sales would have been larger, if they would have shipped more product.

I heard customers ask for it, and people working for stores didn't know what it was. Gamestops and EB's were still pushing NCAA over it.

There are many reasons for it not selling as much, and the price isn't one of them. Get over that already. It doesn't need to be dropped.

Why does everyone always want 2ksports to lower their standards and prices.

Sony doesn't do it on their sports games, and neither should 2k.

EA isn't holding much other than the label. Regardless of anything the standard price for a 360/PS3 game is $60 and so APF should remain just that.

[aholbert32]

Quote: Originally Posted by Radja

good point. i totally forgot about the $$ spent on the legends. however, i believe that they are multi-year deals so they will be producing another game to help make up for that.

They werent multi year deals. The deals were only for this game and most werent even exclusive.