Games and Profit

Can developers and publishers make a decent profit if they sell games around the $20-$30 margin? And Im talking about high profile games.

I seriously doubt it, they would need A LOT more sales to gain a profit, if it's even possible.

Can developers and publishers make a decent profit if they sell games around the $20-$30 margin? And Im talking about high profile games.

vkun

They can if they don't have to pay Sony and Microsoft, if they don't have to pay for packaging and distribution. Basically if they sell the games on steam like services. That's why you see those low prices in steam.

With digital distribution: yes. Game developers make the most money from each game sold when people buy their games through services like Steam.

For retail: depends on the game. Because of the many licensing fees console manufacturers instill on developers, they don't make much money from each game sold. However, if a game doesn't cost too much to make, a developer can make a decent profit from a $20-$30 game.

[QUOTE="vkun"]

Can developers and publishers make a decent profit if they sell games around the $20-$30 margin? And Im talking about high profile games.

edidili

They can if they don't have to pay Sony and Microsoft, if they don't have to pay for packaging and distribution. Basically if they sell the games on steam like services. That's why you see those low prices in steam.

:roll: yes that must be it...steam with its bare bottom prices must mean valve and other developers make almost pure profit. come back when you actually know where the money goe's too into games, how much goes into packaging, how much goes back into the development costs. Even under digital distribution a high profile 50 million dollar development title still has to sell upwards and over 1 million units at 20-30 dollars. Please dont make out that digital distribution guanrantee's such instant profit capabilities.

And Licenseing fee's do not represent the majority of game cost they actually represent less then Packaging.

P.S: by the way Valve charges developers fee's based upon size of studio and success of the game, often the amount is 60/40 Developer/Valve. so its not like Valve says hey host your games on our service for free!!!

http://steamreview.org/posts/finances/
any relevent sources at located there.

Eurogamer recently did a article on where the money you spend on a game goes... here's an extract.

"There are no simple answers. Different publishers arrange different deals with different shops for different games. Some, such as Grand Theft Auto IV, are made in-house by publisher-owned studios. Others, such as the Slightly Mad Studios-created Shift 2: Unleashed, are developed by independents. And some, like Rare's Kinect Sports, are produced by console manufacturers. But Eurogamer has compiled a rough guide based on information provided by various publishers and developers that can be applied to the sale of most boxed console games in the UK.

If you bought a game in the run-up to Christmas and it cost £39.99 to buy, approximately £7 (17.5 per cent) went on VAT (that figure increased to 20 per cent as of 4th January), while £10.50 (27 per cent) went to the shop and £12 (30 per cent) to the publisher.

The rest goes on what's called cost of goods: the nuts and bolts of videogame publishing. 65 pence (two per cent) goes on distribution, £1.75 (four to five per cent) on marketing, and an £8 (20 per cent) licence fee goes to the platform holder (Microsoft, Nintendo or Sony). All these costs are paid for by the game's publisher. If a third-party is behind the game, approximately £3 goes to the developer, or 25 per cent of the publisher's revenue after deductibles, although developers are often paid in a series of advances as they meet milestones."

http://www.eurogamer.net/articles/2011-01-10-where-does-my-money-go-article