I don't think many people realize why video games cost so much, so I thought I'd break it down for you ;-) Well, obviously there's the salaries of the staff. That's a fairly big cut. Then there's manufacturing costs - pressing discs and printing manuals and boxes/sleeves. On top of all this, there will be a licensing fee payable to Sony/Microsoft/Nintendo for releasing the game on their platform (some larger companies may pay a reduced fee, and sometimes exclusivity to a console can remove the fee altogether). There may be other licensing costs involved, for example using comic book, cartoon or film characters, or sporting teams and the individuals. There may be trademarks that you want registered. I'm not sure how the video game indstry enforces royalty payments, there may be a society as with the music industry that collects payments. Then you've got shipping and storage costs - it has to be shipped from the pressing plant to the publisher, stored, shipped to the distributor, stored then shipped to the retailer. This all adds up! Oh, and marketing - games need to be advertised, promos need to be sent out for review etc. Here's a breakdown of a typical $60 game: Art/Design: 25% (about $15) Programming And Engineering: 20% (about $12) Retail: 20% ($12) Platform Fee: 11.5% (about $7) eg Sony Microsoft Marketing: 7% (about $4) Market Development Fund: 5% (about $3) Manufacturing Costs, Packaging: 5% (about $3) Licensing: 5% (about $3) Publisher profit: 1.5% (about $1) Distributor: 1.5% (about $1) Corporate Costs: 0.3% (about 20 cents) Hardware development costs: 0.05% (less than 3 cents) (thanks to The Elderly Gamer for this breakdown). So, the publisher and distributor each only make around 1.5% profit, whereas the retailer makes a whopping 20%! For more info on this breakdown, check out this 2006 article on Forbes. Incidentally, when I worked in video games retail, we put approx. 25% markup on the base price, plus tax, e.g.: COST PRICE + 25% + VAT (17.5% in the UK at that time) If a game were £39.99 retail, we could work out from that that the retailer would pay around £27 + VAT. That confirms a 20% profit for the retailer! Of course, the big retailers are looked after more than the indies. We often found that they get allocated more stock or were in some cases able to offer a better price than we could afford. Online retail is a different matter - as you don't have the overheads of a shop, you can afford to cut that 20% profit.
insane. i've never been without buying new games for so long... paying 65euros for a x360 games is sickening.
When you say "typical $60 game", what sales numbers are we talking here? If the game sells 1 million copies in it's lifetime then surly the % of development costs in a single game will be far lower than if it sells just 10,000. I'm not doubting the it's expensive, but $1 on every game sold?
Quite... although you have to balance the well-sold games against the publisher's poorer sellers. Halo 2 cost over $40 million to make. At least 8 million copies were sold in the first year at $50 a pop. That's $100 million in sales. If we take the factors that apply to manufacture - 5% for pressing and packaging, 5% for licensing, and 11.5% platform fee, probably reduced so we'll call it 10%. That's 20% gone. We already know that retailers take 20%, so we've eliminated 40%. Marketing and corporate costs need to be taken into consideration, but may not be the same percentage as in the table, like you said. If it is, you're looking at 12.35%. The table expects 45% development costs, but we know it cost $40 million, which is 40%. So we've accounted for over 90% of the money. Split the rest between publisher and distributor, and it does seem that yes, we are only talking a few percent each. 1.5% of $100 million IS still a lot of money, though!! I think perhaps that's an extreme case - they usually cost less. Here are some links on game costs: http://news.bbc.co.uk/1/hi/technology/4442346.stm http://news.bbc.co.uk/1/hi/technology/6397527.stm http://www.gamesindustry.biz/content_page.php?aid=21454 http://arstechnica.com/articles/paedia/hardware/crossplatform.ars/2 http://uk.gamespot.com/news/6133848.html http://compsci.ca/blog/profitability-in-video-game-industry/
Generally speaking, budget games show. They are often made by budget companies such as blast! You can tell a budget release because it usually has simple graphics, suggesting they had lower production values and a faster turnaround. I'm not saying the games are bad, I'm just saying they maybe had a smaller team working on it, a shorter amount of time - in general, a smaller budget. Platinum games are different. They've usually sold enough copies to reach their target, and so they can afford to slash the price as there are no development costs to consider. I guess it is plausible that they're occasionally a desperate attempt to recoup as much as possible when a game has made a huge loss, though ;-)
I'm not fully sure on your license & manufacturing fees. I believe the cost are together for unit production fee and the fee can scale based on the medium. Nintendo is known to have the highest fee out of all 3 with Wii games I believe being around $12-15 a unit from what i've heard. DS games obvious scale based on the size of the rom. A boost to double your rom size can usualy cost $1 more per unit (I remember when doing GBA games that going from 8MB cart to a 32MB cart was $3-5 more. Obviously for disc media the price goes up when you go from a single layer disc to a duel layer disc. I don't think people realise how much all this stuff cost. =( The only thing that bothers me is digital distribution. It really pisses me off that digital versions are being set at equal price to retail versions. I've heard a few excuse that it's over not trying to anger the distributors/retail but **** man. Atleast in japan sony has it right for PSP. Their digital versions of all their 1st/2nd party psp software (which come out the same day as the UMD versions) are roughly 1,000-6,000 yen cheaper.
So what would happen if games were half priced but had way more sales since there cheaper? Exactly!! Steam is a good example.
And of course Xbox Marketplace and the Wii equivalent. Those games etc. can be really expensive - try buying every pack for Rock Band! If games were half priced but sold double, then the profit would be the same, I assume. That's basically what budget companies aim for - profit from high sales of cheap games rather than high quality production values and budgets in a hope it'll sell well. I guess it would be theoretically possible to develop an engine and sell that on disc, along with a game or two for it (a bit like Orange Box). Then, you could release further games by download (e.g. XBL), thereby selling the game for less as you don't have the costs of manufacturing.
I wonder why it is, that games are costing more and more money but the quality is getting less? I mean sure the technical aspects and what you can do in games now compared to just 10-15 years ago is AMAZING. But most just aren't "fun" anymore...and that's a damn shame. I know it isn't because I'm "All growed up" because pulling out the old school games, in all their simplicity, still is fun as hell to me.
That's where the Wii comes in - it doesn't focus on graphics but on gameplay, in particular interfacing with the game in a new and fun way.
What upsets me is when I spend 60 Usd on a game then the same night beat it. That really upsets me. :[
That says nothing about the "quality" of a game, whatever that actually means. If you find modern games less fun than old games, then that says more about your personal preference than the games themselves. In a decade's time, the kids of today will be ranting about how GTA3 is still fun but the games of the day lack character. It's personal preference mixed with a healthy dose of nostalgia. I actually agree with you, incidentally - I primarily play older games. There are plenty of great games being released today, though, and they certainly aren't lacking fun or quality. As much as I commend the Wii's interface, most games don't live up to the promise. Just like the Gamecube, there are a number of absolute must-play games that justify the platform, and a lot of shovelware that can be passed over.
Yep, Alchy sums it up. I think that modern day games are the best they have been for a long time. My 360 gets used way more then older stuff now for the first time in awhile. The Wii is supposed to focus on gameplay but so far it's kind of sucked at that.
I don't think the Wii has sucked at it at all. Nintendo made a damn fine platform with some great control methods. It isn't their fault if developers want to just churn out cheap crap / ports for it. Look at Nintendo's own games - there are some superb, very original games amongst them. And other than the ports, some of the cheaper games are very original and highly playable, too. Yes there is a fair bit of dross, but what platform hasn't had its fair share?? There's a conversation going on about PC Engine, SNES and Mega Drive - well all of them had a HUGE amount of toss - hundreds of games, in fact. Did we really need THAT many sports games? And yet people now say how absolutely amazing those consoles were and a must-have. Sure they are, but don't forget that for every must-have console, there's a HUGE PILE of shitty titles.
I'd rather spend that amount on a game that was genuinely great for a short length of time than on one that lasts for ages but isn't as fun.
if the last few weeks iv seen alot of new titles going for £18-£20 accross xbox360 and ps3 LBP, MSR both £20 or less TR:Underworld for £18 cant go wrong at those prices
