Economics of Video Games Make No Sense to Me

#1EX_HazanshuPosted 2/14/2013 3:54:54 PM
DmC going to sell about 500k units on all platforms. That's $15 million wholesale. The marketing budget had to have been at least $2 million. Publishing and royalties at least $7 million.

So $6 million for the developer. The game took 3 years to make. That's only $2 million a year for an entire developer. CEO, executives, artists, animators, programmers, shareholders, equipment, office space, voice talent, and dozens and dozens and dozens of other labor costs.

WTF??? How does this business even exist? Tax subsidies? It seems unless you make COD or Halo or something big-budget console games are a gigantic money loser.
#2RD_21Posted 2/14/2013 3:57:50 PM
Yeah and when they dare try to make money they are getting called money hungry, not talking only about the reboot of this game, but things like online pass and others.
#3StepswordsmanPosted 2/14/2013 3:58:21 PM
[This message was deleted at the request of the original poster]
#4SHMYazooPosted 2/14/2013 3:59:55 PM
These numbers are really reliable and a very good representation of what everyone is getting indeed.

"They must have spent around 2 million on ads and they probably will pay 6 million to the developers and..."
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#5testament067Posted 2/14/2013 4:03:07 PM
SHMYazoo posted...
These numbers are really reliable and a very good representation of what everyone is getting indeed.

"They must have spent around 2 million on ads and they probably will pay 6 million to the developers and..."

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#6RD_21Posted 2/14/2013 4:10:41 PM
SHMYazoo posted...
These numbers are really reliable and a very good representation of what everyone is getting indeed.

"They must have spent around 2 million on ads and they probably will pay 6 million to the developers and..."


Whether the numbers are reliable or not doesn't matter as the point still stand. When a game like Kingdoms of Amalur sell 3M copies and the company still has to close shops, something is wrong.
#7testament067Posted 2/14/2013 4:16:05 PM
RD_21 posted...
SHMYazoo posted...
These numbers are really reliable and a very good representation of what everyone is getting indeed.

"They must have spent around 2 million on ads and they probably will pay 6 million to the developers and..."


Whether the numbers are reliable or not doesn't matter as the point still stand. When a game like Kingdoms of Amalur sell 3M copies and the company still has to close shops, something is wrong.


What is the point exactly
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#8RD_21Posted 2/14/2013 4:23:47 PM(edited)
testament067 posted...
RD_21 posted...
SHMYazoo posted...
These numbers are really reliable and a very good representation of what everyone is getting indeed.

"They must have spent around 2 million on ads and they probably will pay 6 million to the developers and..."


Whether the numbers are reliable or not doesn't matter as the point still stand. When a game like Kingdoms of Amalur sell 3M copies and the company still has to close shops, something is wrong.


What is the point exactly


Read the OP again and it's clear, game making is an industry that cost lots of money and it's hard to do AAA games and remain in business if you don't have big numbers.

As I said I don't really care if his numbers ae mathemagics, I am only agreeing that it's a suffering industry lately.
#9testament067Posted 2/14/2013 4:25:45 PM
RD_21 posted...
testament067 posted...
RD_21 posted...
SHMYazoo posted...
These numbers are really reliable and a very good representation of what everyone is getting indeed.

"They must have spent around 2 million on ads and they probably will pay 6 million to the developers and..."


Whether the numbers are reliable or not doesn't matter as the point still stand. When a game like Kingdoms of Amalur sell 3M copies and the company still has to close shops, something is wrong.


What is the point exactly


Read the OP again and it's clear, game making is an industry that cost lots of money and it's hard to do AAA games and remain in business if you don't have big numbers.

As I said I don't really care if his numbers ae mathematics, I am only agreeing that it's a suffering industry lately.


Well first of all DMC has never been AAA.

Second, nobody, including TC can really tell us what's going on financially with these companies.
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#10geekneck99Posted 2/14/2013 4:32:05 PM(edited)
From: RD_21 | #006
When a game like Kingdoms of Amalur sell 3M copies and the company still has to close shops, something is wrong.

IIRC, 38 Studios had been developing an Amalur MMO before they bought Big Huge Games to make Reckoning, and the deal with Rhode Island seemed more and more like it was doomed from the start as details came out. So yeah, something was very wrong.

It's really sad too. The game and IP showed a lot of potential.
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