Author Topic: Game's that Lost Money? (Read 7795 times)

Mike-OPN2000 · « **on:** February 18, 2003, 05:09:03 PM »

Does anyone know if Nintendo and Silikon Knights lost money on Eternal Darkness? I know that last I heard, it only sold about 500k copeis world wide before the price dropped.

RickPowers · « **Reply #1 on:** February 18, 2003, 05:44:14 PM »

Console games can sell very little and still make money. I'd be surprised to find out that Eternal Darkness lost the company money. It certainly didn't perform up to expectations, though, which is disappointing.

Sean · « **Reply #2 on:** February 18, 2003, 06:08:56 PM »

I remember a commedian, years ago, joking about how we're all so hung up on sales and box-office intake for movies, etc. by saying he knew it was bad when his cab driver was warning him against a movie he had said he wanted to see because it only made x-dollars over the weekend and couldn't be worth his time. And, as you know, x-dollars isn't good.

When you reflect on that, it's hard to imagine that movies have been around for over a hundred years and only relatively recently have we really paid a lot of attention the box office. This has extended to everything, pretty much. I'm not complaining, just talking.

Moonwatcher · « **Reply #3 on:** February 18, 2003, 06:28:07 PM »

Yeah it does seem to be a more recent development that we follow sales charts and box-office takes. What is sad is how a product's sales can often color people's opinions of it.

BlkPaladin · « **Reply #4 on:** February 19, 2003, 01:18:34 AM »

I haven't heard of really any title that hasn't at least pulled its weight.

egman · « **Reply #5 on:** February 19, 2003, 07:03:22 AM »

Interesting thought Sean. I think it's another example of how image obessed people have become these days, to point that they fear anything that is off the beaten path or doesn't seem to be accepted by the "crowd."

To tell you the truth, I think all of this has started in Hollywood when the blockbuster was born in the 70's with movies like Jaws. Ever since then studios have put their bank roll on the line hoping for film with mega returns, rather than hoping for modest return on several good films. In order to make this happen, they need to make it so that the film looks like the event of the century, and if you miss out on it you're a loser. This in turn distorts the publics view about what should be considered "good" or "bad."

Since the video game industry has been trying to emulate Hollywood for at at least almost a decade now, it was only matter of time before this mentality would emerge in the production and consumption of video games. The problem is further exasperated by that fact that Sony and Microsoft true aim is not video game production, even though video games is probably the fast growing entertainment field. Sony and Microsoft want to sell us multimedia set top boxes, and in order to expand the market to a point that this dream can be realized, they are using some of the same tatics that film and music have employed for the last couple of decades.

I'm sorry to say this, but the market probably changed forever when Sony executives decided that they needed to make a console.

MetalHead666 · « **Reply #6 on:** February 19, 2003, 07:10:28 AM »

Usually the break even point for a game is around 250,000 copies.

RickPowers · « **Reply #7 on:** February 19, 2003, 08:16:38 AM »

Sean brings up a very valid point. We seem to be "worrying" ourselves over a lot of information that a scant five or six years ago wasn't available to the general public. The Internet is doing us a great disservice in that regard, giving us access to data that is really none of our damned business.

There's also a great deal of misinformation or information that has lost it's context floating around too. What's worse, armed with this information, every Tom, Dick, and Harry on the Internet can become an Armchair CEO, deciding for themselves how companies can make more money. And 99% of the time, these people are wrong. But they write well, and make convincing arguments with spurious logic, and people less educated beleive them.

It's very sad, really.

I've been in the games industry a long time, and on several different sides. People think that because they worked at Electronics Boutique over the summer than they know how the games business "works". They don't know jack. They are seeing one, largely colored facet of a much greater dynamic. Take the comment above from Metalhead, for example:

Quote
Usually the break even point for a game is around 250,000 copies.

No, the average break-even point for a game is NOT 250,000 copies, and you pulled that information completely out of your ass. I've seen a game break-even at 75,000 copies, sometimes even less. There is NO average break-even point, because it depends largely on the contracts between developers and publishers, development costs, overhead, marketing, etc. There are HUNDREDS of variables.

This is a large part of the reason why we are so strict in the Forums. Everyone is entitled to an opinion. The problem is that many people voice those opinions as if they were fact, and even more base THEIR opinions on these "facts". Finally, there are a great deal of people that think they know EVERYTHING and just can't keep an open mind, so that when they are presented with ACTUAL facts, they can allow their opinions to be reformed. No, they'll stick to their guns come hell or high water, regardless of how foolish it makes them look. So we try to squelch anyone spreading false information or just plain badly formed opinions, because that stuff tends to spread like a virus.

Christberg · « **Reply #8 on:** February 19, 2003, 08:37:59 AM »

Quote
Originally posted by: Sean
I remember a commedian, years ago, joking about how we're all so hung up on sales and box-office intake for movies, etc. by saying he knew it was bad when his cab driver was warning him against a movie he had said he wanted to see because it only made x-dollars over the weekend and couldn't be worth his time. And, as you know, x-dollars isn't good.

When you reflect on that, it's hard to imagine that movies have been around for over a hundred years and only relatively recently have we really paid a lot of attention the box office. This has extended to everything, pretty much. I'm not complaining, just talking.

Yeah, I can completely agree with and appreciate this sentiment. Most of us internet geeks are washed over with ridiculous amounts of information that have no real bearing on our actual happiness with the things that we purchase. I mean, honestly, if how well something sold dictated how well I liked it, why would I ever have bought a Gamecube? I mean, it's so distantly behind the PS2 it couldn't possibly be worth owning right? Wrong.

Couldn't be farther from the truth. It's my favorite console this generation so far and it's only now with this new batch of RPGs that my PS2 is really, really starting to make me happy. Still, in the next couple months I'm still going to be buying more GC software than the other 2 in spite of there being way more stuff released.

I think it's important that we all take a step back and think about it for a while.

Resemvla_Syria · « **Reply #9 on:** February 19, 2003, 09:47:01 AM »

Quote
The problem is further exasperated by that fact that Sony and Microsoft true aim is not video game production, even though video games is probably the fast growing entertainment field. Sony and Microsoft want to sell us multimedia set top boxes,

That is not a fact, and certainly is not a right statement either. Believe me MS and Sony are very happy making money from software sales and royalties, the backbone of the video games industry, almost anybody would dare to say that if their interest was just to sell the system they wouldn't even be making one.

Just don't get carry away even by what MS and Sony says about the future, the multimedia system dream. Probably is what they want but this industry has defined itself into what it is today, games are just a proven system and without them you are nothing, concerning this industry.

MetalHead666 · « **Reply #10 on:** February 19, 2003, 11:38:57 AM »

That is interesting because I read that in an interview with a game developer, so Mr. Rick powers why dont you go tell that dev that he is stupid too.

*EDIT*

OK I found that bit of info, it was in an interview with and Xbox spokesperson, so I guess we can completely disregard that piece of info. Sorry Rick that is what I get for listening to a MS employee.

Fell free to tell that person they are stupid. (semus Blackley to be specific)

RickPowers · « **Reply #11 on:** February 19, 2003, 11:58:56 AM »

Actually, I know Seamus Blackley, and he's a really good guy. He's very passionate about the business, but sometimes, he says things that sound fine at the time, but can be taken out of context to look really bad. Everyone that takes a very strong stance runs that risk.

In this particular case, what types of game was he talking about? It also doesn't take into account a sequel or similar game built with the same engine (lowering development costs for that second game). There is no hard and fast average.

By the way, Seamus is no longer with Microsoft. He left with Kevin Bacchus to form CEG, a company that basically nurtures really good games and ideas, and then delivers the finished product to publishers.

egman · « **Reply #12 on:** February 19, 2003, 12:00:01 PM »

Resemvla_Syria-- I guess fact may be too strong word in this case, but IIRC MS has recently said that their next console would put more emphasis on its multimedia capabilites (I have to find the link). Neither MS or Sony has come straight out and said so, but enough hints have been dropped by both parties to show that video games are just a start. This is not to say that they don't see how lucrative it can be to have a top selling console but honestly I think this is where things are headed in the next couple of generations. Media convergence has been a big dream of the tech world and this is where that dream begins to become reality.

Mingesium · « **Reply #13 on:** February 19, 2003, 12:02:56 PM »

This is from Guinness World Records:

Quote
Most Expensive Computer Game Development - The Dreamcast computer game titled Shenmue cost over $20 million to develop. The project took seven years to complete, and was the brainchild of Japanese developer Yu Suzuki, head of Sega's game-development AM2 division.

I expect the norm to be $3 to $7 million to make a game. A lot of games can make that in a couple of month.

If a game does lose money, it is probable because of marketing. They spend all this money to market a game and the game flops.

Here is a question - Why are companies pulling GameCube support (Sega Sports)?
I thought that ports where easy money. The cost of porting a game wouldn't be much unless they are adding features like Splinter Cell. If they shipped a limited supply, I bet they could make a small profit.

MetalHead666 · « **Reply #14 on:** February 19, 2003, 12:02:56 PM »

It was in an old OXM, I believe it was talking about how most of the money is made on games not hardware, or something to that effect. I know he isnt with MS now, but he was at the time. Maybe he was just perpetrating MS lies

Anyhoo, he does seem like a good guy. But I was just going by what I had read, I wasnt trying to mis-inform anyone.

Infernal Monkey · « **Reply #15 on:** February 19, 2003, 12:11:21 PM »

Quote
Most Expensive Computer Game Development - The Dreamcast computer game titled Shenmue cost over $20 million to develop. The project took seven years to complete, and was the brainchild of Japanese developer Yu Suzuki, head of Sega's game-development AM2 division.

*Shakes head*
Poor Sega. They tried so damn hard with Shenmue, yet the game was basically a flop on Dreamcast. It was released when the hype-train was beginning for Sony's PlayStation 2.
Then they made the wonderful sequel, and thanks to Microsoft, it was never released in the US in it's original form. So it gets ported to the Xbox, which is a death wish if you're looking for sales in Japan. Not only that, but if sales of S2 are anything to go by, the majority of Xbox gamers just are not interested in Adventure games...

rodtod · « **Reply #16 on:** February 19, 2003, 01:13:29 PM »

250,000 copies at $60 each is $15 million.

To get only around $3 to $7 million you'd have to sell at least 120,000 copies. When you think about it, the really cruddy games out there don't cost more than that to develop, and probably don't sell more than a hundred thousand or so. So when you make a bad game, at least you get your money back

MetalHead666 · « **Reply #17 on:** February 19, 2003, 01:17:54 PM »

Games dont cost $60 though.

Mike-OPN2000 · « **Reply #18 on:** February 19, 2003, 04:22:51 PM »

Yea, but thats not profit. The 3-7 million it cost to make the game, has to be made back in profit. You have to figure out how much they actually make on each peice of software. Profit is the only thing that matters, you could sell a million copies, but if you profit margine is only 5%, you didnt accumulate much.

Dolphin64X · « **Reply #19 on:** February 19, 2003, 04:41:47 PM »

Really, this is the reason why we don't see Nintendo advertising more. I'm guessing they don't want to advertise past the point where it will stop creating profits and become costly-a simple cost/benefits comparison. For example, if Metroid Prime would make (just pulling numbers out here) $60 million in profit, and a $10 million ad budget would ad $20 million profit, they'd do it. But if a $20 million ad budget would only ad $25 million, they wouldn't. This is the difference, I believe, between Nintendo's ad campaigns and Sony and Microsoft's. They (Sony and Microsoft) will promote a game far beyond profitable levels, in order to sell more systems, and thus more games, and in the long run more money. Nintendo, in its maximize-current-profit strategy it's been in for decades, only looks at each item individually to determine profit gain. This is, I believe, why we see so much more advertising from the other two companies.

Keep in mind that the numbers mean nothing, and I'm just speculating.

theaveng · « **Reply #20 on:** February 20, 2003, 11:31:02 AM »

Quote
Originally posted by: Sean
When you reflect on that, it's hard to imagine that movies have been around for over a hundred years and only relatively recently have we really paid a lot of attention the box office. This has extended to everything, pretty much. I'm not complaining, just talking.

Not true. When the 1937 movie Snow White became the #1 movie in sales, it was a big deal. It was even granted 7 special Oscars for its achievement. When in 1939, Gone with the Wind became the #1 movie in sales, it was once again a big deal. Making lots of money has ALWAYS been important.
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BTW, isn't this topic a POLL and therefore should be closed?

Dolphin64X · « **Reply #21 on:** February 20, 2003, 12:05:40 PM »

Oh, stop your whining. As long as people are actually conversing, i.e. engaging in intelligent debate, this thread is fine.

ruby_onix · « **Reply #22 on:** February 20, 2003, 02:10:07 PM »

Quote
I haven't heard of really any title that hasn't at least pulled its weight.

ET for the Atari 2600?

News:

Author Topic: Game's that Lost Money? (Read 7795 times)