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Analyst: Tomb Raider cost $100 million, needs 5-10 million sales to succeed

N

Nibel

Member
Bow down if old

Veteran analyst Billy Pidgeon says $100m Tomb Raider needs 5 to 10 million sales to be successful

The single-player focus of Square Enix's IP stable has left the company in a difficult position, according to veteran video game analyst Billy Pidgeon.

In a note passed to GamesIndustry International, Pidgeon predicted that that the imminent departure of CEO and president Yoichi Wada will herald positive changes for the company. However, the coming year will be "very tough" for Square Enix, as it waits to see returns on its investments in new markets.

"On the positive side, the company has made investments in online, social and mobile games including free-to-play games," said Pidgeon, an independent analyst who previously worked at Inside Network, M2 Research and IDC. "Many of these, such as the browser based games, won't bring in significant income for a year or more.

[...]

"The AAA market is extremely competitive," he said. "Most of Square Enix's franchises are single player games, which are less popular than multiplayer. Square Enix has been a leader in that sector, but now faces stronger competition from multiple publishers, both large and small, including Bethesda, Capcom, Xseed, Atlus and Level 5.
Click to expand...

More here: Source (GameIndustry.biz)

#YearOfTheCEOs
 
D

Dennis

Banned
Title says 10 million sales but apparently half will do?

I mean, the difference is not exactly trivial.....
 
Y

Yagharek

Member
Stunning to think so much money is spent on such risky projects. I wonder what the breakdown of that budget is.

Surely outside of CoD there are very few games that can justify such ridiculous expenditure.

Dennis said:
Title says 10 million sales but apparently half will do?

I mean, the difference is not exactly trivial.....
Click to expand...

You don't get to be a veteran analyst by being specific.
 
S

StreetsAhead

Member
Absolutely appalling if true. The games industry cannot keep pursuing its current path. You can't keep spending those amount of money on games without trying to expand the market.
 
S

serplux

Member
Can publishers just make games without AAA budgets and be satisfied with 500,000 - 1 million sales? Is that not possible anymore?
 
S

shinra-bansho

Member
The actual quote rather than the sensationalist headline:

"Square Enix's franchises are well established and require ever-higher production budgets to match and surpass past performance. The latest Hitman and Tomb Raider sold in the three million unit range and got Metacritic ratings above 8. Those numbers would rate as successful for JRPGs that earn more from vendors as exclusives and have manageable budgets. But for games with development budgets approaching $100 million to be truly profitable, ratings have to be above 8.5 and sales need to be in the five to ten million unit range."

So he doesn't actually know the budget and is simply assuming. And GamesIndustry.biz has taken that to mean that both Hitman and Tomb Raider had $100M budgets?

Also rough estimation/calculation of a publisher's revenue from 5M, comes in at $150M+.
 
R

reptilescorpio

Member
$100 million seems like an insane figure.

Monado Blade said:
Do we know how many copies has been sold so far?
Click to expand...

GEQFqvy.png
Click to expand...
From here.
 
K

Kyari

Member
Guys, I think Tomb Raider cost a bunch of money and will take a lot of sales to be successful. Am I an analyst yet?

5-10 million is such a ridiculously huge range of sales figure requirements that his speculation is worthless. If it had been pushed the other way and he had said a game requires "0-5" million sales we would dismiss it in an instant. A 5 million sales gap is not a trivial enough amount to just GUESSTIMATE.
 
A

Aostia

El Capitan Todd
Dennis said:
Title says 10 million sales but apparently half will do?

I mean, the difference is not exactly trivial.....
Click to expand...

Well, honestly:
"But for games with development budgets approaching $100 million to be truly profitable, ratings have to be above 8.5 and sales need to be in the five to ten million unit range."

Doesn't sound so good, as analysis.
First of all, 8.5 scores? To understand if it's PROFITABLE? WTF!?
And secondly: what "professional" range is "between 5 to 10" millions? How detailed you are, analyst!

LOL

That said, it's clear that the AAA business model will be very risky in the actual/incoming generation of home console.
 
S

SparkTR

Member
serplux said:
Can publishers just make games without AAA budgets and be satisfied with 500,000 - 1 million sales? Is that not possible anymore?
Click to expand...

They only have a certain amount of funding to give out to developers, it's financially more secure to put all of that in few major projects than a bunch of smaller ones. Else they'd have to downsize while their competitors rake in the extra sales and overshadow them with 50 million dollar marketing campaigns.
 
A

amar212

Member
And we still remember how some were almost insulted about how development cost of Gran Turismo 5 - which lasted for almost 6 years and resulted with 3 games in total: GTPSP, GT5: Prologue and finally, GT5 - was 60 milllion $.

Smh.
 
R

reptilescorpio

Member
shinra-bansho said:
The actual quote rather than the sensationalist headline:

"Square Enix's franchises are well established and require ever-higher production budgets to match and surpass past performance. The latest Hitman and Tomb Raider sold in the three million unit range and got Metacritic ratings above 8. Those numbers would rate as successful for JRPGs that earn more from vendors as exclusives and have manageable budgets. But for games with development budgets approaching $100 million to be truly profitable, ratings have to be above 8.5 and sales need to be in the five to ten million unit range."

So he doesn't actually know the budget and is simply assuming. And GamesIndustry.biz has taken that to mean that both Hitman and Tomb Raider had $100M budgets?

Also rough estimation/calculation of a publisher's revenue from 5M, comes in at $150M+.
Click to expand...

That makes a lot more sense than what is in the OP.

Their FY is end of March so it should be pretty accurate, especially as that doesn't include DD.
 
R

radioheadrule83

Banned
The drinks are on Crystal Dynamics

I'll be curious to see where this ends up eventually. Its not inconceivable it reaches such targets. They could always do a GOTY edition / next-gen up-port or something.
 
Rhazer Fusion

Rhazer Fusion

Member
If this information is legitimate, this is one of the primary reasons why I am really concerned about next generation. 10 millions units for even a popular, highly-rated AAA title is very difficult in a lifetime. IF that is the direction the industry is heading in, everyone is obviously screwed and no will for good reason will want to take risks.
 
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