Namco: 500,000 PS3 games required for profit

Titles for Sony's next-gen console have to shift half a million copies before developers start to make money, says Takeo Takasu.

The software available for any console is crucial to its success. According to a report on the Bloomberg news service, developers may be thinking carefully about making games for the PlayStation 3 because of the number of sales required to put the projects in the black. Namco Bandai Holdings Inc. president Takeo Takasu has said in an interview that PS3 games must be a mass-market success. Games for the next-generation console cost an average of $8.6 million to create, according to Takasu, and need to sell 500,000 units before the developer can turn a profit.

At the moment, there are shortages in the number of PS3s in circulation, so these targets may be initially hard to reach, Bloomberg noted. Namco Bandai is Japan's second-biggest game developer, so the picture Takasu paints for smaller studios making non-mass-market games is less than bright.

The PS3 launched in Japan on November 11 and in the US on November 17 and will go on sale in Europe sometime in March 2007. Bloomberg also recently reported that the number of consoles available for the US launch was "even lower than expected."

Namco Bandai was founded when Japanese companies Namco and Bandai joined forces in 2005. The companies recently consolidated their partnership and talked of competing more aggressively in the European Union. Namco Bandai had two launch titles for the PS3 in Japan and the US--Ridge Racer 7 and Mobile Suit Gundam: Crossfire. The company also has four titles being released for the Nintendo Wii's Japanese launch on December 2.

286 Comments

  • tibore

    Posted Dec 4, 2006 2:49 am PT

    HAHAHA, and i have seen no ps3 game worth buying, doesnt help much.... take that PS3

    GO WII

  • Spartan070

    Posted Dec 3, 2006 6:05 pm PT

    I think we can seal the deal as far as MGS4 coming to 360, that game probably costed a lot more than $8.6 million to develop. They're going to want to sell as many copies as possible. If it releases simultaneously on both, it'll sell about a million copies in a few days.

  • fachtab

    Posted Dec 3, 2006 11:47 am PT

    ha! sony's goin' down!

  • GrimBee

    Posted Dec 2, 2006 1:20 pm PT

    "1) I don't believe they they spent more than 8 million dollars on MSG:Crossfire. That looks like it's still in alpha stage."

    -- They are talking about next gen titles which will use the ps3 hardware to its fullest...

    "2)Ridge Racer 7 is an update of RR6. 8M+ for this game? I don't buy into it."

    -- I don't either, however it's expected, as they need to front the money to sony for their online system, for the bluray pressing, and not forgetting packaging and marketing of the game. I would say an easy $2 million goes into packaging, pressing and marketing for a standard game in the USA.

    MGS4 probably has a massive budget (knowing harry Gregson WIlliams, you need a big budget...!) pressing a game on a new media format is going to be costly, packaging and marketing aswell... I expect $20 million and more for mgs4.
    The cost just goes up and up when you start meddling with translators for the european markets, also pressings of multilingual manuals and new packaging, also liscencing under a NEW name (sometimes games have a different name in japan, usa AND europe).

    For a next gen game, especially on a new format, its going to be costly. Making a movie is costly, you put in what you want to get out of it, basically,

    Take Borat for example, a budget of $18,000,000.. very tiny for a movie these days.
    What Sacha Baron Cohen did was blag the film by staying in character, causing a stir, creating word of mouth. That then spread his credibility, the character and it rose to such a high standard, now the film has ALREADY made well over $130,000,000... which is, as Borat would say "great success!".

    But basically, you will have a set budget now for creating a next gen game. The wii is quite safe, its not breaking any boundaries, its keeping things cost effective. Its based on gamecube hardware, its got a standard size disc format, and apparently they are also creating new ways for developers to have an easier time to map controls to the wii-remote.

    The Playstation 3 is setting a standard of its own, so its easy to say that games cost $8 million. When you think about the office space taken, the staff pay, the liscencing of the products (or cars for example), also liscencing of the music, marketing of the game (tv ads etc)... When you potentially can get $60 per unit sold, anyone would think $8 million is a sure fire deal!

    The thing is though, thats just for a bog standard conversion. Frankly, the 360 will sell more conversions, its easier to develop for, disc formats are already in place... so as a developer, standard type games will not be so much fo a bargain (hence the vast amount of conversions/ports for the 360 when it first came out).

    So conversions etc for the ps3 will be much more of a gamble, especially when the potential audience is much smaller.

    "3)Do they really expect to sell 500K copies of MSG:Crossfire? Probably in Japan alone. It's made by Japanese and it's a Mobile Suit Gundam game right? !"

    That game is absolutely terrible, once they start churning out the costs for european/worldwide release, that game will then become a commercial flop as the marketing, pressing and translation costs would be massive.

    At the end of the day, its all down to word of mouth, and having a console which truely delivers its message.
    If the ps3 can do this, and offer games to its target audience, it wont go far wrong. But basically don't expect many games to start being "innovative" because if the audience is smaller, then the developers will be taking a gamble every time...

  • Areola54

    Posted Dec 2, 2006 2:18 am PT

    thats what you get for making game just for PS3. it's there own fault.

  • Ryle_Boy

    Posted Dec 1, 2006 9:56 pm PT

    This is good news for all Wii and 360 fanboys, and may scare the little guys into developing for those two consoles.

    Woe to the Ps3.

  • fonzieahmed

    Posted Dec 1, 2006 5:55 pm PT

    trying to scare all the little developers eh?

  • drangel_jam

    Posted Dec 1, 2006 4:49 pm PT

    1) I don't believe they they spent more than 8 million dollars on MSG:Crossfire. That looks like it's still in alpha stage.
    2)Ridge Racer 7 is an update of RR6. 8M+ for this game? I don't buy into it.
    3)Do they really expect to sell 500K copies of MSG:Crossfire? Probably in Japan alone. It's made by Japanese and it's a Mobile Suit Gundam game right? !

    Cross platform anyone!? We might finally see the American console getting some considerable love from a considerable amount of Japanese developers.

    Ultemately, they can always stick with their Wii. I bet they are dying for getting a piece of their own Wii.

  • GameArtGuy

    Posted Dec 1, 2006 2:00 pm PT

    How many 360 game sales to turn profit.
    Using XNA? about 2 coppies

  • DiscGuru101

    Posted Dec 1, 2006 1:54 pm PT

    Heh. Not good.

  • metalclay128

    Posted Dec 1, 2006 1:32 pm PT

    ahahahaa, i've already said this but...i'll say it again: history repeats itself!

    woohooo!!!! in N64 all over again!!! horray for horrible business decisions, stubborn presidents, and developers moving from one system to another

  • DogOfDeath

    Posted Dec 1, 2006 11:45 am PT

    "and there games suck as hell (which is never)"

    You forget to realize...that the PS3's best launch game is getting some very low reviews around the gaming community. Might wanna check your numbers, but the PS3 games are all ready lacking.

  • ChitoKiryoku

    Posted Dec 1, 2006 11:07 am PT

    sony is not making money, which is what a gaming company is really for... the simple truth is they overpowered the ps3 and now it's hard to make a profit, especially considering the relatively small amount of consoles.

    the ps3 is awesome, but it's TOO awesome; they should have made it less impressive so producing games for it would be cheaper, and there could have been more ps3s out.

  • legend_maker

    Posted Dec 1, 2006 9:51 am PT

    man here we go about ps3 nt making money and blah blah blah.. until sony goes bankrupt (which will be never) and there games suck as hell (which is never) then these stupid people should start talking smack about ps3.. but since non of what i said is happening then nobody should be talking stupid like this...

  • ricsuave

    Posted Dec 1, 2006 9:37 am PT

    MAD_VD
    500,000 can sony make that many PS3's
    ==============================================================
    LOL! THIS is the post of the year.

  • SoralinkGS

    Posted Dec 1, 2006 8:54 am PT

    Well, I kinda figured it cost a ton to make those "pretty" graphics everyone wants. Still, the blow is bigger, because if a smaller title doesn't hit 500,000 units, that means we are more than likely never to hear of a sequel for it.(well, you probably wouldn't have now, but still, its even worse)

  • samhain_

    Posted Dec 1, 2006 8:43 am PT

    i have a 360, while im very happy with it, I long for games like final fantasy and good solid action or platforms, like rachet and clank and the weird game colosus for ps2. as an xbox owner I will never see the orginal japanese games that make the playstation what it is. unless of course sony keeps fuc#en up like this. 500,000 games for a profit on only $8mill spent? thats a huge amount of sales. Yes, there are alot of people out there that own or will own a particular console, but how many games have you passed up? Lets face gaming is an exspensive hobby, most people buy high profile titles like gears, final fantasy , halo, etc...... this is baddddd

  • Prince_jeffery

    Posted Dec 1, 2006 8:27 am PT

    Exclusives are gonna be itching to go to the next console, unless of course they are first-party.

  • wess2001ii

    Posted Dec 1, 2006 7:13 am PT

    If 8.6 Million bucks were to be spent on a SINGLE game, Developers must think twice before rushing into making any game...This is partially good, as it will force them to keep up with the good games only to enhance their sales

  • eayoshi

    Posted Dec 1, 2006 6:27 am PT

    Don't know about you guys, but I like Tekken, Soul Caliber, Urban Reign and XenoSaga. I would buy a 360 *today* if they came out with a new XenoSaga for it.

  • chrisdojo

    Posted Dec 1, 2006 5:57 am PT

    dang. no wonder developers are skeptical on signing up exclusive titles...

  • EikoAtoride

    Posted Dec 1, 2006 5:51 am PT

    ouch... sh**, no more of that sweet little gems...

  • granposho

    Posted Dec 1, 2006 5:27 am PT

    Damn, that's some serious amount of money needed. So, how many 360 games do you need to sale to gain profit?

  • KingofTrolls

    Posted Dec 1, 2006 5:03 am PT

    Namco-Bandai is one of the finest developers in the gaming industry. I always look forward to their games.

  • MAD_VD

    Posted Dec 1, 2006 4:16 am PT

    500,000 can sony make that many PS3's

  • coltACP

    Posted Dec 1, 2006 2:51 am PT

    I certainly HOPE Namco did NOT spend $8.6 million dollars on the Gundam wing game which doesn't even run well on the hardware...if they spent that much they need to seriously consider the competance of the company. Also out of all the consoles the PS3 is the LEAST mass market machine, how the hell do you have Mass market apeal for something marketed as a high tier computer system?Someone somewhere really didn't think this one through. One point tho-small devs can make downloadable games-that is the ONLY option developers have on PS3, but well that option is also available with the other machines too.

  • cjcr_alexandru

    Posted Dec 1, 2006 2:30 am PT

    What are the numbers for Xbox 360 and Wii? Those numbers will probably decide which console will win this time.

  • Sam_Lowery

    Posted Dec 1, 2006 1:24 am PT

    Hey Namco, you want a mass market success? Put Tekken on the 360 and get it online. You'll make so much money everyone will forget about that dreadfull gundam game.

  • pencilpusher69

    Posted Dec 1, 2006 12:11 am PT

    powerslave88
    "that isnt too much to catch up to now!! they got this in the bag"

    Many games never sell 500,000 copies, in fact, most don't ever go that high. So, in the bag? Hope that's sarcasm.

  • shibipocanibo

    Posted Nov 30, 2006 11:22 pm PT

    Yeah, that's a little crazy. Then again, that cost will be driven down fairly fast. But still....geesh. Remember Phantasy Star IV? That games cost almost $100 when it came out...in 1991. That's just craziness. You can practically buy a DS for $100.

  • StumpyTrash

    Posted Nov 30, 2006 11:16 pm PT

    500,000 copies to turn a profit??? No wonder games cost 60 bucks! It's a miracle they don't cost more!

  • anamnawshad

    Posted Nov 30, 2006 11:04 pm PT

    More bad news for PS-3........

  • ocdog45

    Posted Nov 30, 2006 10:39 pm PT

    HA HA - nelson munts....they have to sell these gaems which is much harder that shippin. this is gonna be tought. makes pubishers not wanna make games.

  • powerslave88

    Posted Nov 30, 2006 10:37 pm PT

    that isnt too much to catch up to now!! they got this in the bag

  • Wellfedmonkey

    Posted Nov 30, 2006 10:08 pm PT

    Wow! That totally sucks!

  • eayoshi

    Posted Nov 30, 2006 10:03 pm PT

    Bad business when your staunch 3rd party developers think twice about developing for your system.

    Half a mil to break even? Sony better think of a program to support small independent developers, and their online arcade had better rock, because developing for the 360 is looking more and more attractive by the day.

  • ardandil

    Posted Nov 30, 2006 9:51 pm PT

    what!!! now you say it...

  • xophaser

    Posted Nov 30, 2006 9:48 pm PT

    Namco Owen, make some good games for the PS3 first.

  • freediro

    Posted Nov 30, 2006 9:27 pm PT

    sony has been doing this for a while they aren't going to ruin this and will be alright! like all these articles you must give this whole thing time!

  • idealbasher

    Posted Nov 30, 2006 9:26 pm PT

    Alot of hate is growing for sony why i can tell you why but that will take all day BRUN SONY TO THE GROUND

  • thekey

    Posted Nov 30, 2006 9:21 pm PT

    Well I guess Namco is going to abondon ship, because until the end of next year I don't think any of the PS3 games will crack 500k by the end of next year.(Multi platform time!)

  • UltraWoody

    Posted Nov 30, 2006 9:16 pm PT

    If PS3 crashed and burned I would die a happy, respectable gamer.

  • WPack911

    Posted Nov 30, 2006 8:39 pm PT

    Thus this is why Sony shot themselves in the foot with the PS3, they forgot that only reason that PS1 and PS2 were the winner's of the last 2 Gen's was because of massive 3rd party support. They got cocky now thinking it was all the Sony name that put them on top, but it was not and as this Console war plays out they will realize that the hard way.

  • RaiKageRyu

    Posted Nov 30, 2006 8:23 pm PT

    Looks like only the big names will appear on the PS3...

  • neoand12

    Posted Nov 30, 2006 8:16 pm PT

    Agreed idealbasher

  • idealbasher

    Posted Nov 30, 2006 8:00 pm PT

    xxxbirdmanxxx
    i have a question for people that don't like ps3 and are looking at this article. if you truly dont like it then why are you even looking at this stuff? same goes for people who dont like the Wii and Xbox360, there is no point to looking at there articles if it doesnt even involve something you own or are giong to own in the future....for me i play what is fun and f&*# the rest ........ I will tell you because i liked sony before they where full of F&*^ @#$% and i hope they stop making game systems when they don't care about having good new games anymore its more of a format war then a console war for sony

  • legs1986

    Posted Nov 30, 2006 7:56 pm PT

    "pfft this claims Devlopers only get $17.20 per game sold ... that means SOny / retailers get $42.80 -- thats not true ... sony would get $10 - 12 , the retailer $25 and the devloper $23 - $25 .. which means its more like 380,000 copies of as game sold world wide ... note: this is for PS3 and 360 games ... "

    Retailers make like 3-10$ per new game.

  • slick_gio

    Posted Nov 30, 2006 7:54 pm PT

    "henry4th
    On the other hand, Killzone2 has a reported development budget of 21 million. That means it will need to sell more than 1.5 million copies to be profitable. And will it sell more than 1.5 million copies?

    So what it comes down to is this: smaller games and/or companies don't need to spend 8.6 million dollars to make the games (hence, doesn't need to sell 500,000 copies to make profit). And big games are already spending that amount of money and selling that well, so what's the problem?"

    The problem is henry4th that games that cost 8.6 million to make (the average) will NEED TO SELL 500,000 COPIES. Games like Killzone 2 (not even above average but excellent) will NEED TO SPEND 21 MILLION TO SELL A MILLION COPIES.

    See the problem? Even crappy games will need to spend big bucks. And because they are crappy they easily wont sell 500k. Just look at the PS3 with its installer base. Those games alone rarely pass the 500k mark even with 10 of millions of PS3 allready in peoples homes. There aren't even 500k PS3 out yet. According to the numbers you need to sell about as many PS2 as there currently are to even try to break 500k.

  • williamwu1985

    Posted Nov 30, 2006 7:42 pm PT

    some people just complain at start, everything is hard to make at first, later on, game will require less money. retailer get about 20, sony only get about 10, and devoloper get 20, that's things about ps2 game. i dont know about ps3 game, but this article is said too much.

  • choasgod

    Posted Nov 30, 2006 7:24 pm PT

    pfft this claims Devlopers only get $17.20 per game sold ... that means SOny / retailers get $42.80 -- thats not true ... sony would get $10 - 12 , the retailer $25 and the devloper $23 - $25 .. which means its more like 380,000 copies of as game sold world wide ... note: this is for PS3 and 360 games ...

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