Re: Xbox 720
Its going to be hard to see very many new IPs from outside the major publishers due to the cost just to get a game on the market. People seem to think that the games sell for $60 and all that money goes back to the publisher / developer, but thats far from the case.
Most companies can only expect to make anywhere from 15%-30% on that $60 dollar purchase. It all depends on how the contracts are written up, but for the sake of math and giving a company the benefit of the doubt, we will say 40%.
So out of that $60, the developer and publisher split that 40%, which gives us around $24 revenue per game sold. The average cost of taking a game from concept to your door is around $30m. So now you take that $30 and divide that by $24 which gives us about 1.25million.
This means that a company would have to sell 1.25m copies of a title JUST to break even, thats without even 1 cent of profit. Keep in mind that these games take 2-4 years to make as well. Imagine working on something for 4 years and risking not only making no profit, but taking a big loss as well.
Full featured console titles have become too expensive for the majority of game studios to risk producing and quite a few studios have gone to mobile gaming due to the lack of expense and very generous revenue stream it brings.
This is why you see so many rehashed titles now. You dont have to reinvent the wheel at every turn...just simply slap a new map pack on a game thats already made and just make it a sequel. Even with CoDs popularity, it took awhile to become profitable when it first released and now that it has a cult following, they will just tweak and refine for awhile. Right now they are going to milk CoD for all its worth, but they are going to stagger them out slower. The entire industry watched the Guitar Hero / Rock Band craze get shot down very rapidly almost overnight, so many are watching to see what happens with the FPS craze.
Its going to be hard to see very many new IPs from outside the major publishers due to the cost just to get a game on the market. People seem to think that the games sell for $60 and all that money goes back to the publisher / developer, but thats far from the case.
Most companies can only expect to make anywhere from 15%-30% on that $60 dollar purchase. It all depends on how the contracts are written up, but for the sake of math and giving a company the benefit of the doubt, we will say 40%.
So out of that $60, the developer and publisher split that 40%, which gives us around $24 revenue per game sold. The average cost of taking a game from concept to your door is around $30m. So now you take that $30 and divide that by $24 which gives us about 1.25million.
This means that a company would have to sell 1.25m copies of a title JUST to break even, thats without even 1 cent of profit. Keep in mind that these games take 2-4 years to make as well. Imagine working on something for 4 years and risking not only making no profit, but taking a big loss as well.
Full featured console titles have become too expensive for the majority of game studios to risk producing and quite a few studios have gone to mobile gaming due to the lack of expense and very generous revenue stream it brings.
This is why you see so many rehashed titles now. You dont have to reinvent the wheel at every turn...just simply slap a new map pack on a game thats already made and just make it a sequel. Even with CoDs popularity, it took awhile to become profitable when it first released and now that it has a cult following, they will just tweak and refine for awhile. Right now they are going to milk CoD for all its worth, but they are going to stagger them out slower. The entire industry watched the Guitar Hero / Rock Band craze get shot down very rapidly almost overnight, so many are watching to see what happens with the FPS craze.
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