Exclusive games never lose money right?

#1sabrestormPosted 12/20/2013 1:19:50 PM
lets say a company decides to make a game and either sony or ms approaches them and says we will pay you XX amount of money to make it exclusive. the company says they will lose sales by not being multiplat.

ms or sony says the game will probably sell 5 million copies on multiplat but 2 million as exclusive so we will pay you a fee equal to the 3 million projected sales you would lose from not being multiplat just to say its our exclusive game.

So the game company gets paid for 5 million sales even if it sells only 2 million as a bonus for making the game exclusive. so an exclusive game will never lose money if the fee matches projected sales.

Is that how it works?

I know if I owned a game company and was asked to make X game exclusive I would demand a big enough fee to cover sales I would lose by not being multiplat. I assume that's how it works?
#22ndAtomiskPosted 12/20/2013 1:39:29 PM
I'm fairly certain that's not how it works.
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#3SorbetowulfPosted 12/20/2013 1:46:16 PM
That's sort of how it works, but not really.

The console manufacturer will likely not pay money equal to the difference in sales likely lost. For starters, sales projections are conjecture, and in the case of a new franchise, which most console exclusive deals revolve around, may be completely inaccurate.

Usually what will happen is the manufacturer will approach with things like incentives, rather than attempting to reimburse lost sales. Things like paying for the advertising (remember that, in most cases, an exclusive title that is anticipated will become a so-called "system seller.") In this case, it behooves the publisher and manufacturer both to advertise heavily.

They will also offer things like manufacturer run servers, to cut down on publisher and developer overhead to run and manage servers, eliminating long-term costs.

And things like merchandising, moves to bigger offices. Intangibles, stock options, 401k's, trust and tuition funds, etc.

There's not a lot of disclosure about what goes into exclusivity contracts, but they wouldn't be merely a straight "we'll lose X units, so you owe us X dollars" scenario.
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#4krystylaPosted 12/20/2013 1:48:48 PM
Sorbetowulf posted...
That's sort of how it works, but not really.

The console manufacturer will likely not pay money equal to the difference in sales likely lost. For starters, sales projections are conjecture, and in the case of a new franchise, which most console exclusive deals revolve around, may be completely inaccurate.

Usually what will happen is the manufacturer will approach with things like incentives, rather than attempting to reimburse lost sales. Things like paying for the advertising (remember that, in most cases, an exclusive title that is anticipated will become a so-called "system seller.") In this case, it behooves the publisher and manufacturer both to advertise heavily.

They will also offer things like manufacturer run servers, to cut down on publisher and developer overhead to run and manage servers, eliminating long-term costs.

And things like merchandising, moves to bigger offices. Intangibles, stock options, 401k's, trust and tuition funds, etc.

There's not a lot of disclosure about what goes into exclusivity contracts, but they wouldn't be merely a straight "we'll lose X units, so you owe us X dollars" scenario.


Also an incentive, money upfront and considerably less risk
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#5SorbetowulfPosted 12/20/2013 2:11:02 PM
INCENTIVES

(Cut to, inside of office, Microsoft and EA execs present)...

MS exec: So, we have to monetary figure, we'll advertise, and you can use our servers.

EA exec: Hmm. Yes. It's a rather sweet deal, but I'm afraid it's not enough to whet our... considerable... appetites...

MS exec: We figured as much. You know... did I mention the safari trip Bill went on last month. He had an amazing time. A trip to the remote Genik mountains. You know of them?

EA: Uh, no. I can't say that I do.

MS: A wonderful place. The most succulent fruits to sate the most ravening hunger. And... the women.

EA: The women?

MS: Mmhm. The nubile ladies of the Markath tribe. Bodies sculpted from the very hands of God, skin as fair as the most brilliant quartz. Hair, lush and full. And the wiggles that will thrice kill a man before he may refract. JOHNSON! Fetch the sirens!

(enter hula skirt ladies, dancing to tribal music and pantomiming lascivious gestures)

EA: SOLD! SOLD! SOLD! YOU CAN HAVE EXCLUSIVES!

(cut to Sony office).

Sony Exec: Dammit. There goes that one. Guess you can stop now, Betsy. Maybe next time.

(Unicycle riding elephant juggling bottles of Dos Equis while wearing a Chive On shirt bleats dejectedly).
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#6krystylaPosted 12/20/2013 2:14:15 PM
Sorbetowulf posted...
INCENTIVES

(Cut to, inside of office, Microsoft and EA execs present)...

MS exec: So, we have to monetary figure, we'll advertise, and you can use our servers.

EA exec: Hmm. Yes. It's a rather sweet deal, but I'm afraid it's not enough to whet our... considerable... appetites...

MS exec: We figured as much. You know... did I mention the safari trip Bill went on last month. He had an amazing time. A trip to the remote Genik mountains. You know of them?

EA: Uh, no. I can't say that I do.

MS: A wonderful place. The most succulent fruits to sate the most ravening hunger. And... the women.

EA: The women?

MS: Mmhm. The nubile ladies of the Markath tribe. Bodies sculpted from the very hands of God, skin as fair as the most brilliant quartz. Hair, lush and full. And the wiggles that will thrice kill a man before he may refract. JOHNSON! Fetch the sirens!

(enter hula skirt ladies, dancing to tribal music and pantomiming lascivious gestures)

EA: SOLD! SOLD! SOLD! YOU CAN HAVE EXCLUSIVES!

(cut to Sony office).

Sony Exec: Dammit. There goes that one. Guess you can stop now, Betsy. Maybe next time.

(Unicycle riding elephant juggling bottles of Dos Equis while wearing a Chive On shirt bleats dejectedly).


You can make fun of MS as much as you want but before insulting Bill Gates I'd like you to donate half your wealth about 43 billion in gates case
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FC: 4227 - 1514- 7752 IGN:Mara
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#7NinjaGuerraPosted 12/20/2013 2:18:43 PM
krystyla posted...
Sorbetowulf posted...
INCENTIVES

(Cut to, inside of office, Microsoft and EA execs present)...

MS exec: So, we have to monetary figure, we'll advertise, and you can use our servers.

EA exec: Hmm. Yes. It's a rather sweet deal, but I'm afraid it's not enough to whet our... considerable... appetites...

MS exec: We figured as much. You know... did I mention the safari trip Bill went on last month. He had an amazing time. A trip to the remote Genik mountains. You know of them?

EA: Uh, no. I can't say that I do.

MS: A wonderful place. The most succulent fruits to sate the most ravening hunger. And... the women.

EA: The women?

MS: Mmhm. The nubile ladies of the Markath tribe. Bodies sculpted from the very hands of God, skin as fair as the most brilliant quartz. Hair, lush and full. And the wiggles that will thrice kill a man before he may refract. JOHNSON! Fetch the sirens!

(enter hula skirt ladies, dancing to tribal music and pantomiming lascivious gestures)

EA: SOLD! SOLD! SOLD! YOU CAN HAVE EXCLUSIVES!

(cut to Sony office).

Sony Exec: Dammit. There goes that one. Guess you can stop now, Betsy. Maybe next time.

(Unicycle riding elephant juggling bottles of Dos Equis while wearing a Chive On shirt bleats dejectedly).


You can make fun of MS as much as you want but before insulting Bill Gates I'd like you to donate half your wealth about 43 billion in gates case


wooooooooooooooooooooooooooooooooooooooooooooooooooooosh
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#8shawnmckPosted 12/20/2013 2:21:16 PM
Saying that exclusives never lose money is about as accurate as saying exclusives never make money.
It all depends on the game.
There have been exclusives that have made tons of money, and there have also been exclusives that have bombed and lost money.
It just depends on the game and the system.
#9TerraUniversePosted 12/20/2013 2:24:47 PM
Most games don't sell that much.

It's more about making a game as cheaply as possible, and making sure you can make back more than you spent on the project. If a game was made for $1 million and got a profit of $2 million, than that is successful. If a game was made for $15 million and got a profit for $10,00,000, then they lost, even though they sold a lot more than the smaller $2 million game. Still, this doesn't usually happen. Most games don't sell that much, so they don't spend that much on it.

Games don't have to sell that much to be profitable. In the case of exclusivity they don't have a chart telling of how much they could make as a multiplatform. In most cases, Sony and Microsoft will finance most of the game itself or pay for the license, and the developers actually feel more free to experiment. They don't have to be a success anymore.

Even being a best seller is not a guaranteed for success. I think Journey which was a PS3 exclusive game was hugely popular, but it still lost money. Some people argue that if it had been multiplatform, perhaps it would have sold better, but I don't know that that's true. If it were multiplatform, it's possible people wouldn't have noticed the game as much.
#10krystylaPosted 12/20/2013 2:28:46 PM
TerraUniverse posted...
Most games don't sell that much.

It's more about making a game as cheaply as possible, and making sure you can make back more than you spent on the project. If a game was made for $1 million and got a profit of $2 million, than that is successful. If a game was made for $15 million and got a profit for $10,00,000, then they lost, even though they sold a lot more than the smaller $2 million game. Still, this doesn't usually happen. Most games don't sell that much, so they don't spend that much on it.

Games don't have to sell that much to be profitable. In the case of exclusivity they don't have a chart telling of how much they could make as a multiplatform. In most cases, Sony and Microsoft will finance most of the game itself or pay for the license, and the developers actually feel more free to experiment. They don't have to be a success anymore.

Even being a best seller is not a guaranteed for success. I think Journey which was a PS3 exclusive game was hugely popular, but it still lost money. Some people argue that if it had been multiplatform, perhaps it would have sold better, but I don't know that that's true. If it were multiplatform, it's possible people wouldn't have noticed the game as much.


Well that's square enix
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