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Dead Space 2 cost $60 million to make, sold 4 million copies, underperformed

LordRaptor

Member
The thread you linked is also from 2014. Three years ago. The GDC graphic goes up to 2016, showing a huge rise between 2014 and 2016.

Yes, because releases per publisher is the important data point, but it needs contextualising by what those releases actually were.
Reselling titles as "HD remasters" adds to a 'per unit release' count, but I think it is very arguable to classify as "new games" or that there are only so many games that already exist that you can "upsell" to the same audience at a higher resolution.

Its like selling the family jewels - its money now, but you can only do it once.
e:
Although things like the EA Vault are an attempt to turn reselling old titles into an ongoing revenue stream and not a one off return.
 

Sulik2

Member
This is infuriating. Normal people look at a spend of $60 Million dollars on marketing only managing to garner 4 million in sales and go there is something broken with our marketing or maybe marketing just doesn't work very well on game sells.

Publishers look at it and go we can't make enough money to remake dev costs. Lets inflate marketing budgets even more, because throwing money at a problem always fixes it, and pack in microtransactions.

The biggest publishers in the world completely misunderstand their entire market. On top of not seeming to get that the PS2 era of every game selling 10 million copies is gone in the fragmented market we have now with a middle that never recovered financially from the last recession.

If that marketing spend had been 30 million dollars less Dead Space 2 would have likely been a nice financial success and I bet would have sold the exact same amount of copies.

Lol that's because you don't understand basic economics.

EA does not take all $60. Not even close.

Of the $60:
-$5 for packaging and shipping
-$8 for platform holder's fee
-$20 to 30 for the shop/retailer's cut (really, the shop gets the largest slice by a mile)
The publisher is left with about $17-25 per $60 game. Less if there's taxes in the price too.

How it works is shops buy a bulk order of copies for a set price. So Amazon might buy 10,000 copies for x amount, working out at paying the publisher $20 a copy, then Amazon charges you $60. A smaller shop may only buy 500 copies, but because their order is small, they pay more like $30 per copy, making less profit for the shop but more profit per game for the publisher, but shifting fewer copies so making less money overall too.

This is how business works. Bulk = cheaper. Retailer margins = massive.

Your numbers are waaaaay off for what retailers get as a cut. Most retailers only get $6 - $10 per retail game depending on negotiations. $8 was normal where I worked retail. A 50% margin is unheard of in retail if your name isn't Apple. The generally accepted number is publishers make $30 - $40 on a $60 game, pre tax of course.
 

fenners

Member
Yes, because releases per publisher is the important data point, but it needs contextualising by what those releases actually were.

Again, that's not what you originally said/suggested.

Publishers have been consolidating their own releases for the last decade. Making fewer bigger bets, essentially.

But there's more games than ever being released across the market.
 

LordRaptor

Member
Again, that's not what you originally said/suggested.

Publishers have been consolidating their own releases for the last decade. Making fewer bigger bets, essentially.

But there's more games than ever being released across the market.

Again, you need to define your terms:
Are you talking about "the market" in terms of web, mobile, Pc and consoles?
If so, then yes, you are correct.

Are you talking about "the market" being "Playstation and Xbox home consoles"?
If so, then no, there are fewer games being released on PS4 and X1 than there were on PS360, significantly fewer than PSWii60.

If you are talking retail only, that number gets even smaller.
 

fenners

Member
Again, you need to define your terms:
Are you talking about "the market" in terms of web, mobile, Pc and consoles?
If so, then yes, you are correct.

Are you talking about "the market" being "Playstation and Xbox home consoles"?
If so, then no, there are fewer games being released on PS4 and X1 than there were on PS360, significantly fewer than PSWii60.

If you are talking retail only, that number gets even smaller.

There are fewer games being released to retail. There are more games being released for the PS4/Xbox/PC than in previous generations. We're in an explosion of releases, they're just not coming from the major publishers.
 
how much marketing can you get with $60 million? does Dead Space 2 feel like it has that kind of push back then?

I think marketing is very important and I think anyone who said dev should cut on marketing is misguided. that said, if you're spending that kind of money, it better shows otherwise you's just throwing money away
 

Sulik2

Member
how much marketing can you get with $60 million? does Dead Space 2 feel like it has that kind of push back then?

I think marketing is very important and I think anyone who said dev should cut on marketing is misguided. that said, if you're spending that kind of money, it better shows otherwise you's just throwing money away

Marketing is important, but the last several years have shown a dramatic shift to streamers having far more impact on sales then mega marketing campaigns. See PubG and Five Nights at Freddies for the absolutely best examples of this affect. Marketing budgets should be a fraction of what they are now, focus on streamers and influencers and publishers would see far more return for their marketing dollars. TV advertising for games is literally like throwing money away.
 

Ducktail

Member
One of the best action-survival games of all time, seriously. Glad I bought it at 60 bucks :(

This is the kind of remaster I'd gladly take on the current gen.
 
Heavy Rain with a similar full dev time and probably team size cost $22M to produce without marketing and distribution (released 1 year earlier). Should give you a nice idea how expensive the Bay area is since QD isnt exactly in the cheapest part of the world either in Paris
 
Since Horizon hasn't even sold the gangbusters 4 million copies (and it is gangbusters) does that mean Horizon likely wasn't profitable?

Anyhow, not being profitable at 4 million is fucking ludicrous.

But Horizon sold 3.4 million copies in its first couple of months at full price, or close enough to it (accounting for retailer special offers and suchlike). If we assume Sony is getting $35 per copy sold, that's $120 million which is probably close to covering their total investment. Plus they'll see a boost in hardware sales by hundreds of thousands of units and they'll get 100% of the money from any sales made on PSN. So if they sold for example 80% physical, 20% digital, that's $96 million from retail sales and $41 million from digital sales.

3) Ninja Theory is based in the UK, which has a significantly lower standard of living than San Francisco

Uh, you sure about that? I know San Fran is a major city so rental fees and the like would be sky high there, but I don't expect general living costs are much different in the UK compared to the US.

If you look at this, assuming it is correct, groceries are much cheaper here in the UK but many other living costs like clothing, childcare, public transport and utilities are significantly more expensive.

60 million??? that's high for a movie, let alone a video game.

It's not high for a blockbuster movie, and similarly EA were trying to make a blockbuster video game.

The Witcher 3 cost $30m?

If true... how?

I'd read that TW3 was 60-something million euros, which by today's rate is around $70 million USD. I'll have to try to find a source.
- Never mind, it looks like that was the total budget including marketing. Seems like a tiny marketing budget considering the game was everywhere when it launched!

We really need a thread for all the different dev costs vs ROI for games. I would sub for sure. This stuff is just fascinating.

I find it interesting too, but it's a shame publishers guard this information so closely.

Wow, the difference from country to country is absurd then because that game is like the first thing I think when high budget comes to mind. I mean, 4 years of development, huge open world, a lot of dialogue and performance capture, huge amount of quality assets, etc etc.

Fucking crazy.

Cost of living for games development outside of USA, Canada, UK, France, Sweden and Germany is probably a lot lower. No doubt a couple of other countries I have forgotten too. But anyway, when you start getting to Eastern Europe the costs are much lower.
 

LordRaptor

Member
There are fewer games being released to retail. There are more games being released for the PS4/Xbox/PC than in previous generations. We're in an explosion of releases, they're just not coming from the major publishers.

No, that's not true, unless you start fudging categories and filters like only comparing PS3 to PS4, or excluding XBLIG indie games but counting self published indie games

e:
Marketing is important, but the last several years have shown a dramatic shift to streamers having far more impact on sales then mega marketing campaigns. See PubG and Five Nights at Freddies for the absolutely best examples of this affect. Marketing budgets should be a fraction of what they are now, focus on streamers and influencers and publishers would see far more return for their marketing dollars. TV advertising for games is literally like throwing money away.

For a company like EA, whose bread and butter consumer are of mainstream tastes, I honestly don't think "just show your games on twitch" is anything approaching a better approach to their marketing.
 

Fdkn

Member
The biggest publishers in the world completely misunderstand their entire market. On top of not seeming to get that the PS2 era of every game selling 10 million copies is gone in the fragmented market we have now with a middle that never recovered financially from the last recession.


That era never existed, lol
 

Kill3r7

Member
AAA gaming is just too risky. This why MS makes very little now and buy surefire franchises instead like Minecraft.

Agreed with the gist of your statement. Although, Ubisoft has shown that risky bets can pay off handsomely. Wildlands and For Honor were the two best selling games for the first half of the year according to the NPD. Wildlands was more than likely the number one worldwide prior to the slew of fall releases and PUBG.

FWIW, Minecraft is not AAA. That said, it is this generations Tetris and kids of all ages play the game. It is a cultural phenomenon and looks like it will continue to be for the foreseeable future.
 

Audioboxer

Member
https://kotaku.com/nearly-40-of-all-steam-games-were-released-in-2016-1789535450

I don't think either of us are going to change our minds at this point.

To be fair, the majority of that is probably digital homicide games ( ͡° ͜ʖ ͡°)

Okay, my bad, I didn;t see you'd included Pc in your statement.
Yes, the PC is a thriving market, and has more releases than ever, I have zero contention about that.

While the PC market, largely thanks to steam, does dwarf PSN/XBL, a lot of the better digital games from steam do come to console. Even Undertale, a game many thought wouldn't come to a controller, made its way over.
 

KonradLaw

Member
Marketing is important, but the last several years have shown a dramatic shift to streamers having far more impact on sales then mega marketing campaigns. See PubG and Five Nights at Freddies for the absolutely best examples of this affect. Marketing budgets should be a fraction of what they are now, focus on streamers and influencers and publishers would see far more return for their marketing dollars. TV advertising for games is literally like throwing money away.

While this might be true your examples are all PC-centric games. Big marketing campaigns are rarity in PC gaming and always have been. There's also smaller focus on retail and first-month sales. I'm not streamers and influencers would work anywhere near as well with console-centric titles, especially for traditional singleplayer cinematic games that Dead Space 2 was
 

Lime

Member
I am now a much bigger proponent of scaled back, smaller games.

This shit does not seem sustainable otherwise.

Scaling back production budgets goes against the entire economic logic of the major games industry - i.e. profit-maximization and return of investments aka capitalism. Any executive or decisionmaker scaling back budgets and thereby abandoning the quest for the GTA/COD/Destiny money will be fired.
 
Marketing is important, but the last several years have shown a dramatic shift to streamers having far more impact on sales then mega marketing campaigns. See PubG and Five Nights at Freddies for the absolutely best examples of this affect. Marketing budgets should be a fraction of what they are now, focus on streamers and influencers and publishers would see far more return for their marketing dollars. TV advertising for games is literally like throwing money away.

that depends on the game genre or if it's stream friendly or not. linear action horror game like Dead Space probably is not suited for marketing via streaming. in fact, it might actually hurt game sales if people can see the whole game via streaming.

games like Uncharted, The Last of Us and God of War won't rely on streaming. they need great eye catching trailers whether it's via CG trailer, live action trailer, combine that with great gameplay trailer, reviews and word of mouth is how it get the success they have.
 

UrbanRats

Member
I am now a much bigger proponent of scaled back, smaller games.

This shit does not seem sustainable otherwise.

This is clearly the solution for me, too.

I say this as someone who loves open world games, the GTAs, the Witcher 3s, etc etc.
Not every game needs to have that level of production value or scope.
Hell not every game even needs to have full voice acting, let alone be a graphical powerhouse or last 80 hours with bloated shit.

The sooner the industry accepts this, the better.
 
Scaling back production budgets goes against the entire economic logic of the major games industry - i.e. profit-maximization and return of investments aka capitalism. Any executive or decisionmaker scaling back budgets and thereby abandoning the quest for the GTA/COD/Destiny money will be fired.

You're probably right, but it's crazy to think these incredibly high-risk-high-reward $100M ventures are always a better idea than taking multiple cheaper risks that would be way more likely to actually generate a return on investment. Or, y'know, as mentioned, just don't base your whole studio bang in the center of one of the most expensive places to live on the planet.
 

Audioboxer

Member
Here come the corporate mouthpieces again.

I'm sure loot boxes in Dead Space 2, just like MTs in Dead Space 3, would have raked in $50~60m, easily.... Right?

It's almost as if, if you make certain types of games and then attempt to put something stupid in them, fans say no thanks and you end up cannibalising your own product. As I satirised earlier, some games aren't COD where it's significantly easier to fleece gamers from MT money. It doesn't matter what you do to some games, you can't force them to be COD.

Loot boxes in horror games, to do what? Resident Evil save ribbons? Saving your game dictated by RNG? Yes, I'm sure something crazy like that would have skyrocketed profits past the $120m expenditure. Maybe just Legendary skins for Jill Valentine instead? None of that beat the game in 3 hours to unlock the rocket launcher or alternative costumes. That's too kind on consumers.
 

ZdkDzk

Member
I'm not sure how these numbers actually work out. Even if they only made $20 per copy on average, they still would have made their money back and then some. Of course that doesn't factor in marketing, but how much does a game need to make relative to it's budget to be considered profitable?
 
I am now a much bigger proponent of scaled back, smaller games.

This shit does not seem sustainable otherwise.

Of course it's not sustainable, and I'm with you on the fiscal responsibility in terms of game development. Great games can be made on a pittance, relatively speaking.

Unfortunately greed always results in this sort of thing. It's the bane of the human condition, not just confined to the realm of gaming.

It is disappointing to me personally in this case because I loved the whole trilogy (ending of 3 aside). I have yet to play Extraction, however. But being realistic and looking at the yin/yang aspect of things, the games would have never existed without bloated, filthy greed permeating the industry in the first place.

So, I guess I love what I hate and hate what I love. ;)
 

Kill3r7

Member
I'm not sure how these numbers actually work out. Even if they only made $20 per copy on average, they still would have made their money back and then some. Of course that doesn't factor in marketing, but how much does a game need to make relative to it's budget to be considered profitable?

It varies greatly depending on genre, the size of the developer and the publisher’s ambition. Publicity traded companies will usually announce their sales targets/expectations during their earning calls. Making your money back is fine but you do not generate large profits and revenue from making your money back. The 3 big AAA publishers are not going out there to hit a single or double. They are trying to hit a home run, preferably a grand slam, more often than not.
 

Lime

Member
You're probably right, but it's crazy to think these incredibly high-risk-high-reward $100M ventures are always a better idea than taking multiple cheaper risks that would be way more likely to actually generate a return on investment. Or, y'know, as mentioned, just don't base your whole studio bang in the center of one of the most expensive places to live on the planet.

retailgenresalesl5sx2.png


Publishers are demanded by their shareholders and investors to become part of that 12 percent.
 

mckmas8808

Mckmaster uses MasterCard to buy Slave drives
$60m to make, another $60m to market? You get...what, $45 from each copy sold? 4m copies sold...$180m? And that's pushing what they might've gotten from each copy. If they got say, $30m, well. They broke even, which means that game wasn't worth making in EA's eyes.

Yikes. Jason's right.

And this is the sad thing to me. When breaking even is bad after you make a historic game, then your priorities are messed up.
 

rockyt

Member
Not sure why it's confusing how much the game cost and someone thought they get the whole 60 per game back.


Game cost 60 million to make in-house by developers plus other salaries

Marketing cost another (60 million)

Publishers get a cut (roughly 30pct)

Retailers get a cut (not sure on this)

Shipping cost money (not sure on this)

Manufacturing cost money (Not sure on this)

Not all games are sold at 60 dollars (factor in discount sales)

The game sold roughly over 2 million.
 
And this is the sad thing to me. When breaking even is bad after you make a historic game, then your priorities are messed up.

If, as a business, your business investment is doing worse than just sticking money in an index fund then yeah you're fucking up. Breaking even isn't good enough.
 

Kill3r7

Member
https://en.wikipedia.org/wiki/List_of_best-selling_PlayStation_2_video_games

I forgot how little games actually sold back then. That's when games were $50.

If Dead Space 2 had been released in that era, and sold 4 million copies, it would have been considered a monstrous success. One generation later and it's a disaster.

The market grew significantly during last gen with many titles selling ridiculously high numbers. Also, sales and price cuts became more prominent which helps pad the unit sales figures.
 
I remember picking up a brand new copy of Dead Space 2 for €10 in March 2011. Two months after it came out, it was reduced from €60 to €10.

This was at a time when price drops in Ireland/UK were quick and steep (they still can be, but they've slowed down these days), but even at that time I was surprised at just how quickly this particular game was written off. I mean, really...
 

mckmas8808

Mckmaster uses MasterCard to buy Slave drives
If, as a business, your business investment is doing worse than just sticking money in an index fund then yeah you're fucking up. Breaking even isn't good enough.

But does that "HAVE" to be the point with every single game all the time? Isn't their value in having a high quality product that also breaks even?
 

Principate

Saint Titanfall
But does that "HAVE" to be the point with every single game all the time? Isn't their value in having a high quality product that also breaks even?

These are business' not artists with patron's. The only reason they're even in the industry is to make money.
 

Kill3r7

Member
But does that "HAVE" to be the point with every single game all the time? Isn't their value in having a high quality product that also breaks even?

These are business' not artists with patron's. The only reason they're even in the industry is to make money.

Prestige only matters up to a point. The gaming industry does not have something akin to the Oscars. Pandering to the fan base matters but it is basically the movie industry in hyperdrive. Also, hard to argue short term returns given how profitable the last few years have been for the big boys.
 

mckmas8808

Mckmaster uses MasterCard to buy Slave drives
These are business' not artists with patron's. The only reason they're even in the industry is to make money.

Prestige only matters up to a point. The gaming industry does not have something akin to the Oscars. Pandering to the fan base matters but it is basically the movie industry in hyperdrive. Also, hard to argue short term returns given how profitable the last few years have been for the big boys.

Not for a business with shareholders, no.


And this is why I'm NEVER going to be a huge fan of EA at the end of the day. And that's why I love Sony's approach to allowing and funding "artist like" games that may not make millions in profits back.
 
Everything you ask for costs a lot of money.

FF9 almost certainly cost more to make than i am setsuna. FF's are among the most expensive games of their era. Square mentioned FF7 to have a budget of 45 million dollar.

I doubt the sequels where much cheaper.

You dont get High production values, variety and large game worlds (handcrafted) for cheap. Resolution and fps dont make a game more expensive.
I know FF9 cost more than Setsuna, but I think it wouldnt be as expensive as FF15, also FF7 is probably as expensive as it is because it's their first 3d games, there must have been a lot of experimentation on to get it right.

I dont have any data, but I doubt FF9 scale games with its level of asset nowadays would cost as much. No voice acting, limited facial animation,no motion capture, static background, no fancy lighting, no texture/bump map or whatever else that create realistic characters and environment.

The art asset to make large and varied location would still be expensive, but its gonna be way cheaper than full AAA Final Fantasy title.
 

Kill3r7

Member
And this is why I'm NEVER going to be a huge fan of EA at the end of the day. And that's why I love Sony's approach to allowing and funding "artist like" games that may not make millions in profits back.

FWIW, Sony, Nintendo and MS have more revenue streams but don’t underestimate EA and Activision. They generate significant amounts of profits.
 
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