The Sales Game

[ShadowPaladin V1.0]

How many units sold approximately would you say it took to consider a game a success ?

 

And based on a full developement cycle how many would be required to break even ?

[pulp]

You'll have to qualify the question abit.

 

Firstly, to which platforms are you refering to?

 

Secondly, are you making a comparison across platforms?

 

Lastly, and most importantly I feel, somebody will have to work out the average dev costs for a standard CRPG/FPS/etc game to have a benchmark by which to gauge a game's success or not - especially if you're asking about break-even points.

[ShadowPaladin V1.0]

It's really aimed at Feargus and how it relates to Obsidian rather than just sales in general.

[pulp]

It's really aimed at Feargus and how it relates to Obsidian rather than just sales in general.

I wonder if its the sort of question he'd freely answer

[Hubert the Beardless]

... Just for himself ...

 

one copy ~ 30-45 $, let us take the latter.

 

Than we have:

 

20 guys there who will develop the game through, let's say 3 years.

Let us took their salaries to be an average 40 grands a year. That means we have 2.4 millions just for development. Above 53,000 copies has to be sold for that.

Adding marketing costs, special costs like mocap and voice actors, etc, I would estimate that 100,000 copies sold would even bring a profit.

(I assumed that 20 guys include the coders writing their proprietary game engine)

 

Now I don't know about these things I just blindly estimated these numbers. Maybe we can make the bunny jump out fom the bush !

[samm]

it always depends on developing cost. planescape: torment did come out even, with 200000 copies sold, afair. iwd1 has quickly sold unexpectedly well and thus bis / interplay made profit. don't know about numbers, but it must have been about a quarter of a million units sold?

[Sammael]

IWD1 sold at least 300,000 units, probably more (because I know it sold better than Fallout 1 and 2 combined).

[Monte Carlo]

Another question to add to SP's (if he doesn't mind, seeing as it's sort of related and obviates the need to begin a new thread):

 

How do publishers view the lifetime of a product vis-a-vis profits? That is to say, how does a title's longevity count in the broader picture. For example, Fallout budget discs, The Complete IWD, bundled BG saga bonus packs (etc)?

 

I was in Game the other day and people were still buying budget bundled BG2/ToB some three-four years after release. How does that get factored into profit calculations...is it seen as merely an apre-release bonus if a title is successful?

 

Cheers

MC

[Atreides]

It all rolls down to whether the expected *present value of forecasted/expected cash flows (from sales, publishers?) is equal or hopefully greater than the present value of costs. Plus there may be the added challenge of matching costs vs income (bills need to be paid on time).

 

Quite clearly the present value of the amount depends on what interest rate OE or the industry in general is using. A risky project usually drives the interest rate up because people expect to be compensated for the risk that things may turn sour.

 

Anyway it's a way of calculating whether projects are worth taking on. I'm guessing this answers MC's question as to how late sales are handled - they're still income, but less "valuable" (a $ today is worth more than a $ tomorrow). Before taking on a project they may estimate how sales will go at different times after release and then calculate its present value, then compare it to the present value of costs etc. That's why sales close to release are more valuable then sales much later on (longer time = smaller present value).

 

 

*Present value (PV) is the discounted value of a cash flow. Er, you could look at it this way: say you invest $100 for a year, and at the end of the year (at interest rate = 10%) your investment is worth $110. Looking at it backwards, you could say the present value of $110 in a year is equal to $100 today. Basically PV takes into account the time value of money, not just the magnitude.

 

Edit: sorry if it doesn't make much sense, I'll try to explain if somebody wants me to. I'm sure Feargus or finance dudes could do a better job.

[DemonKing]

How many units sold approximately would you say it took to consider a game a success ?

 

And based on a full developement cycle how many would be required to break even ?

The problem with the question is that development costs vary so much that for a game to be a success *for the publisher* depends on how much they outlayed in the first place.

 

For example, the original IWD was a profitable success because its development cost/production time were fairly minimal - it didn't need to sell more than a few hundred thousand copies to be considered profitable/successful.

 

Now if you look at (extreme example) DNF - it has been in development 7 years, they've licenced 2 different engines for it, its probably been abandoned, redesigned, and reimagined by different staffers at various times at some considerable costs etc. Basically all this means the entire population of China and India combined will probably have to buy a copy for it to be considered profitable/a success -*if* it ever gets released.