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Takasu Says PS3 Game Titles Must Sell 500,000 to make a profit

Vieo

Member
Namco Bandai's Takasu Says PS3 Game Titles Must Sell 500,000

By Masaki Kondo

Nov. 30 (Bloomberg) -- Namco Bandai Holdings Inc., Japan's second-biggest maker of video-game software, must sell at least half a million copies of a game for Sony Corp.'s PlayStation 3 console to make money on the title, said President Takeo Takasu.

Graphics for the high-definition games cost about 1 billion yen ($8.6 million) to create, more than double that for Nintendo Co.'s Wii titles, Takasu said in a Tokyo interview Nov. 28.

``We have to sell at least 500,000 copies per title worldwide to make a profit on PlayStation 3 games,'' said Takasu. He said titles for the new Sony console are ``selling well.''

Shortages of the PlayStation 3 may also make it more difficult for software makers to sell enough games. Tokyo-based Sony halved shipment targets for the console this year and delayed the European release amid a dearth for some parts. The company may have missed its goal of shipping 400,000 consoles in the U.S. earlier this month, according to analysts including Jeetil Patel at Deutsche Bank Securities in San Francisco.

``Game makers may hesitate to make games for a console if its shipment is being delayed,'' said Yuuki Sakurai, who helps manage $6.02 billion at Fukoku Mutual Life Insurance Co. in Tokyo. ``Some game makers may wait until a console becomes popular because of increasing production costs.''

Tokyo-based Namco Bandai expects games for the consoles introduced this month by Sony and Nintendo and a year ago by Microsoft Corp. to account for 10 percent of software sales, or 3.15 million units, this fiscal year ending March 31, Takasu said. The company sold about 26,000 titles for Microsoft's Xbox 360 last year, when it was introduced.

Namco Bandai developed two titles, the ``Ridge Racer'' car racing series and the latest ``Gundam'' shooting game, for Sony's PlayStation 3's Japan debut on Nov. 11, and will introduce four titles for Nintendo's Wii this weekend. The Wii offers a motion- sensor controller without high-definition graphics.

Shares of Namco Bandai fell 0.3 percent to 1,734 yen as of 1 p.m. on the Tokyo Stock Exchange.


Is that a lot? How many did PS2 games have to do to make a profit?
 

Surreal

Member
Maybe Namco Bandai just fails at PS3 development (wouldn't be that far fetched), have other devs been complaining like this?
 
That's a very simplistic answer, there are too many factors to take into consideration (length of development, number of employees, advertising costs). Plus, it's their choice if they want to spend that much money to begin with, there's always Live Arcade and PSN for more affordable budgets.
 

icecream

Public Health Threat
The company sold about 26,000 titles for Microsoft's Xbox 360 last year, when it was introduced.

Huh? Ridge Racer 6 + Love Football sold more than that... didn't it?

Not to mention Culdcept Saga's on its high right now.
 

Zaptruder

Banned
Wario64 said:
Looks like we won't get a Ridge Racer 8 then.

You kiddin me? Ridge Racer 7 is the epitome of distributed development costs.

Recycle assets + small enhancements + a little new content = new game.

I expect some games to take this route, milking the hell out of their fanbase.
 

Striek

Member
If the games only cost $8.6 million, they must've paid out the ass for advertising costs to not hit profit at 300k.
 
500,000 isn't so bad for the japanese companies that create worldwide oriented games (such as Konami and Capcom). But I'd imagine the game companies in Japan that only focus on Japanese released titles would have troubles considering the market over there is staggering when it comes to traditional games.
 
The break-even point is going to depend heavily on the budget for each game, so I don't really see how it's possible to attach a hard and fast "profit" number of copies sold.
 

theBishop

Banned
A lot of this horror story stuff is based on the current situation and doesn't take into account the future.

Just like Sony took a huge loss last year due to R&D on the PS3, early next-gen games are going to take a bullet so that future games can be more rapidly developed. As programmers get their next-gen tools up and running and middleware/sdk's improve, and as content creation tools improve, all these costs come down. The first Resistance game took 2+ years to create. But i bet the next one is out in late 2007 or early 2008 simply by the fact that Insomniac already has their technology working.

I read an article today saying Sony needs to sell 30 games per unit to make back the loss on PS3 hardware. Again, that may be the case today, but the cost of assembly will come down every month from now to the end of the system's life.

Everyone just needs to COOOL OUT. Next-gen isn't going to implode.
 

ethelred

Member
theBishop said:
A lot of this horror story stuff is based on the current situation and doesn't take into account the future.

Just like Sony took a huge loss last year due to R&D on the PS3, early next-gen games are going to take a bullet so that future games can be more rapidly developed. As programmers get their next-gen tools up and running and middleware/sdk's improve, and as content creation tools improve, all these costs come down. The first Resistance game took 2+ years to create. But i bet the next one is out in late 2007 or early 2008 simply by the fact that Insomniac already has their technology working.

I read an article today saying Sony needs to sell 30 games per unit to make back the loss on PS3 hardware. Again, that may be the case today, but the cost of assembly will come down every month from now to the end of the system's life.

Everyone just needs to COOOL OUT. Next-gen isn't going to implode.

Yeah, you probably know more about this than the President of the second largest game publisher in Japan. He just needs to COOOOOL OUT and the profits will come.
 
``We have to sell at least 500,000 copies per title worldwide to make a profit on PlayStation 3 games,'' said Takasu. He said titles for the new Sony console are ``selling well.''

Ridge Racer 7 (PS3) 1st Week sales - 21,654
Gundam (PS3) 1st Week sales - 21,309

And now they are at th ebottom of the top 30

WHY am I trusting Takasu?
 
Log4Girlz said:
Wtf are you talking about, there's no way. Now I've read that ds games on average cost that much to develop.

TUFTYButton.jpg
 

Jonnyram

Member
Dunno where you got this translation from, but it misses out the best part of the interview:
http://www.bloomberg.com/apps/news?pid=90003017&sid=aTULG0hM6sgI&refer=jp_japan

Takasu admits that taking a game, like Ridge Racer 6, from one next-gen platform, and repurposing it (i.e. Ridge Racer 7) on another next-gen platform, is the future of the industry. So look out for Trusty Bell 2, Love Football 2 and Culdcept Saga 2 on PS3, while Ace Combat 7, Tekken 7, Taiko no Tatsujin 9, Tales of Sequelitis etc. will all end up on 360 eventually.

Edit: the "selling well" quote was true though. A lot of "WTF!"s on 2ch regarding that bit.
 

Branduil

Member
Jonnyram said:
Dunno where you got this translation from, but it misses out the best part of the interview:
http://www.bloomberg.com/apps/news?pid=90003017&sid=aTULG0hM6sgI&refer=jp_japan

Takasu admits that taking a game, like Ridge Racer 6, from one next-gen platform, and repurposing it (i.e. Ridge Racer 7) on another next-gen platform, is the future of the industry. So look out for Trusty Bell 2, Love Football 2 and Culdcept Saga 2 on PS3, while Ace Combat 7, Tekken 7, Taiko no Tatsujin 9, Tales of Sequelitis etc. will all end up on 360 eventually.

Edit: the "selling well" quote was true though. A lot of "WTF!"s on 2ch regarding that bit.

Well, a huge amount of games being on both the 360 and PS3 isn't anything new. That's why the conventional wisdom says you will buy a PS3 or a 360, not both. Besides the fact that together you'd be spending a grand on systems alone.
 
So 30 million dollars they make if they sell 500,000 copies worldwide.


If it takes almost 9 million on graphics alone... how much is sound?
- Then how much is level design?
- Online/Wireless/Network programming?
- AI/Physics Engines? or
- Buying the license for another engine?
- Packaging?
- Shipping in one region alone?
- Advertising? (At least another 5 million if we're talking about worldwide)
- Localization?
- Production/Manufacturing?
- Shipping units worldwide and advertising them as well?
- Royalties and cuts that store brands get for selling the titles?

The whole thing reaks of oddness
 

linsivvi

Member
Kobun Heat said:
That works out to about $17 per game sold. What about that sounds off?

Because many people on GAF fail at economic and always think that if you sell a game at $50, you pocket that $50 in its entirety, no matter how many times people correct them.
 
LanceStern said:
So 30 million dollars they make if they sell 500,000 copies worldwide.


If it takes almost 9 million on graphics alone... how much is sound?
- Then how much is level design?
- Online/Wireless/Network programming?
- AI/Physics Engines? or
- Buying the license for another engine?
- Packaging?
- Shipping in one region alone?
- Advertising? (At least another 5 million if we're talking about worldwide)
- Localization?
- Production/Manufacturing?
- Shipping units worldwide and advertising them as well?
- Royalties and cuts that store brands get for selling the titles?

The whole thing reaks of oddness

Yea, it should be more like 2 million units worldwide per game.
 

Wario64

works for Gamestop (lol)
Zaptruder said:
You kiddin me? Ridge Racer 7 is the epitome of distributed development costs.

Recycle assets + small enhancements + a little new content = new game.

I expect some games to take this route, milking the hell out of their fanbase.

Ridge Racer 6 didn't sell too well either, so I dont see why that makes it ok
 
I never said > 300k = Profit

fodl

Oh and Admiral, considering the crappy amount of time Namco puts in most of it's titles nowadays, I'd lower that to maybe 500k. Perhas he could be right.

Capcom... now THAT'S a company that demands >1.5 million sales. And even then they get disappointed.
 

castle007

Banned
LanceStern said:
I never said > 300k = Profit

fodl

Oh and Admiral, considering the crappy amount of time Namco puts in most of it's titles nowadays, I'd lower that to maybe 500k. Perhas he could be right.

Capcom... now THAT'S a company that demands >1.5 million sales. And even then they get disappointed.

Someone needs a hug??

slideshow01.jpg
 

bluemax

Banned
I wish I had my class notes for the games production class I took. IIRC the estimates for last gen games were that it had to sell between 200k and 500k to become profitable depending upon budget. I could be remembering bad though, but 500k to be profitable doesn't sound wrong from my recollections of that class.
 

Jiggy

Member
I was definitely beaten to it, and with far more witty/subtle/funny inferences, but yeah, hey, at least with a figure like this we have a legitimate, non-arbitary basis to designate a certain sales number as bomba or non.
 
linsivvi said:
Because many people on GAF fail at economic and always think that if you sell a game at $50, you pocket that $50 in its entirety, no matter how many times people correct them.
yup so true!
itd be nice for all the companies involved in getting the game to the store, and then selling it to consumers did it all for free, but it just aint so. people gotta get outa gamer fairy land.
 

vireland

Member
LanceStern said:
So 30 million dollars they make if they sell 500,000 copies worldwide.

. . . .

The whole thing reaks of oddness

Well, if Namco/Bandai had a direct relationship with each and every customer and sold all their games direct for $60, that might be true, but back in the real world there is wholesale and middlemen to deal with, and in Japan, especially, that's a hefty chunk off the top. Figure they're getting maybe 60% of retail on average. Is he exaggerating? Yeah, I think there's some of that in there. Every game will not have an 8.6 million dollar budget, especially the sequels of sequels and the shared engines. But, let's be fair. He's getting retail price for few if any of the units sold.
 

White Man

Member
Is this really news? I recall reading stories from this gen stating that like 80-90% of games made are not profitable at all.
 
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