TRIBES sales figures

edit: never mind!

Every once in a while I have to dig this sort of thing out. Here's what it takes to make a PC game these days. We'll call our mythical game "Mystery House":

Developer ~$200,000 / Month for 24 months = $4,800,000
Engine ~$500,000
Physics Engine ~$200,000
Acting ~$150,000
Burden Costs ~$250,000 (my salary, my bosses, other people who work with me, etc...)
Misc ~$100,000

So before we do any marketing or PR, before we buy an ad, we're looking at $6,000,000 for Mystery House, and that's not even an expensive game any more. Add in Marketing and PR and you're up between eight and ten million. We'll say $9,000,000 for our total budget for this game. All of those costs are paid for by the publisher, but the first 4 items ($5,650,000) are actually an advance against the royalties of the developer, and they have to be paid back before the developer makes any money. An average royalty rate is probably 12% to 18%. We'll use a really good royalty rate of 25% because it makes the math easier.

Now let's look at how much money everybody makes from selling this game. You go to your local EB and buy a copy of Mystery House for $50. We (the publisher) sell Mystery House to EB for about $33. That About $5 of that is cost of goods, shipping, etc..., so we really get about $28 back. In Europe and the rest of the world We only get about $20 back, and that's 50% of our market, so let's average the two and say that we (the publisher) get $24 per copy sold (it's slightly less actually, but we'll stick with 24). So our gross revenue is 2.4 million per 100,000 copies sold. The developer gets 25% of that (which they have to use to pay back our advance of 5.65 million, so $600,000 per 100,000 copies sold.

The publisher is trying to get to 9 million plus. The Developer is trying to get to 5.65 million plus. To get to 9M we need to sell 375,000. That's just to break even. That doesn't pay for us to develop another game yet. The developer needs to sell 941,667 games just to pay back the advance (if they don't make it, they don't have to pay out of their pockets - all the risk is taken by the publisher). Once that happens they actually start to make money - not before.

So for whoever said 75,000 units on a game would make a publisher a lot of money, you're not quite right. For our Mystery House example, 500,000 units would make Sierra a nice profit, and 1.5 million units would make the developer a nice profit - around 3.3 million.

But...

All those sales numbers depend on the price not ever going down. Usually a game only stays at full price for a short time, then it goes down to $40, $30, $20, and eventually into the $10 bin. Once it starts coming down we start making less money, which makes all the above numbers even more difficult to reach.

So, if you want to make a small fortune in the games business the best way is to start with a large fortune.

game industry has many parallels in the film industry...one obvious one being that most films loose money

game industry has many parallels in the film industry...one obvious one being that most films loose money
Well, same as books too. I believe only 1 in 10 books actually makes a publisher money, but it covers for the other 9 that flopped.

Thrax, question. If the game sells well, where does the extra developer money go? Just in reserve for making the next game, or what?

I'd imagine that's up to the developer. They might do revenue sharing with the employees or the president might spend it on coke and hookers.

what about hookers MADE of coke?

what about hookers MADE of coke?
:lol: nice!

:browsmile

Thrax, question. If the game sells well, where does the extra developer money go? Just in reserve for making the next game, or what?Developer money goes to the developer (that 25%). The extra money for the publisher (VUGames) goes into a general fund from which all development money is allocated. It will then be used to make The Simpsons: Road Rage VII, and Aliens vs Predator XIV.

Scratch that career option...

Scratch that career option...All it takes is one 3 million seller and you're rolling in cash. But of the several hundred games made every year, only one or two (and sometimes none) sell that well.

But it's still making games and not working in a bank, so it's got that going for it :)

Yea, if it's this fun to PLAY games, making them must be awesome.

But after a while it must grow on you...And gamers demand so much these days...Maybe I should be a tester

hoho

So does the industry manage to pull a positive gain despite these incredibly inhibitive costs?