Sales Projections

[BrainMuncher]

Hopefully it makes enough in the short term for obsidian to self-fund a sequel, and a good chunk of profit on top of course.

 

But the best thing about PE is the long term potential. A quality, lengthy game like this should have a considerably long tail of sales, as opposed to flashy graphics-driven titles, short games with little replayability etc.

The 2D art should result in good performance even on old PCs, meaning more potential buyers. And since its visual appeal is not based on technology it should age well just like the IE games have.

Since obsidian owns the entirety of PE, no one can screw them out of royalties this time.

[Dornedas]

No worries, I personally know six-hundred thousand Germans alone, waiting to buy PoE, day one. Whole families, together, eating bratwurst, drinking beer, playing Pillars of Eternity. And for every one European buyer, there are two in Eastern Europe, sharing vodka and kielbasa. This game will be a success on the coattails of good writing, alcohol, and tasty sausages.  

 

I'm not so sure. Eating Bratwurst and drinking beer is a summer activity. Since PoE comes out in winter it would be far more likely that we Germans will be eating Sauerkraut. But drinking beer and playing PoE will definitely happen.

 

OT: I am really disappointed with all of you. This will be THE CoD-killer with yearly new games. Everything under 13 mil would be a failure.

[Messier-31]

No worries, I personally know six-hundred thousand Germans alone, waiting to buy PoE, day one. Whole families, together, eating bratwurst, drinking beer, playing Pillars of Eternity. And for every one European buyer, there are two in Eastern Europe, sharing vodka and kielbasa. This game will be a success on the coattails of good writing, alcohol, and tasty sausages.  

 

[Monte Carlo]

 

 

using a quicker development timeframe

 

Wut?

 

This game hasn't enjoyed a particularly fast development cycle. I'm not complaining, but I don't see this.

[Monte Carlo]

No worries, I personally know six-hundred thousand Germans alone, waiting to buy PoE, day one. Whole families, together, eating bratwurst, drinking beer, playing Pillars of Eternity. And for every one European buyer, there are two in Eastern Europe, sharing vodka and kielbasa. This game will be a success on the coattails of good writing, alcohol, and tasty sausages.  

 

You are forgetting the UK. The Queen has pre-ordered a copy and has decreed that the release date will be a public holiday. We will all drink tea and eat cucumber sandwiches whilst standing to attention while a military flyby roars overhead. Corgis will gambol in Green Park and Yeoman Warder's do somersaults as The Royal laptop is booted up for her first playthrough.

[HoonDing]

It will sell more than Blackguards which already sold very well.

[Bryy]

Ostensibly, the game has sold 80,000 copies to date

No it hasn't.

 

It's a harsh truth nobody wants to ever talk about, but all those backers? Loss. Nothing has actually been sold. Things have been funded. Right now, Obsidian is working at a 73,669 loss. The only difference is that we're not knocking on the door saying they had better deliver or we'll can the project four months from launch. 

 

To say that Obsidian has actually made money on Eternity is a ridiculous, ridiculous lie.

[lolaldanee]

 

Ostensibly, the game has sold 80,000 copies to date

No it hasn't.

 

It's a harsh truth nobody wants to ever talk about, but all those backers? Loss. Nothing has actually been sold. Things have been funded. Right now, Obsidian is working at a 73,669 loss. The only difference is that we're not knocking on the door saying they had better deliver or we'll can the project four months from launch. 

 

To say that Obsidian has actually made money on Eternity is a ridiculous, ridiculous lie.

 

well, the copies sold to this day have paid wages for over a year, so it's kind of earned money from a employees view

as far as obsidian as a company goes you are right of course

[ManifestedISO]

I really do think sales outside the US will dwarf the numbers here. The distributor is based in Sweden, evidently, and if this forum is anything to go by, Obsidian could be banking on millions of affable foreigners, even Albanians.

 

 

[600lbpanther]

I am not an accountant but I understand enough to be dangerously misguiding.

 

To me this argument is like saying the guy who owns a small pizza shop that only sells $750,000 a year is losing money because he isn't selling $2,000,000 a year.  Well, he is losing the potential profit by not selling $2,000,000 worth of pizza but is he really at a negative or unacceptable profit?  Do we know his overhead?  debt?  profit per pizza?  If that small business owner is making just 10% net profit he is making $75,000.00 a year in a business that he owns.  Also, he is effectively designing his own life rather than having it designed for him.  This is what I think of when I think of Obsidian.  A small business that designs their own life at a profit (I have no idea if it's modest or not...also...what is "modest".  Like Chris Rock says:  "If Bill Gates woke up with Oprah's money he'd kill himself".)

 

If their initial $1,000,000 goal included buying new computers, software, furniture, salaries, benefits (401ks, HSAs, etc.) then that would already be covered by the time they hit the $4,000,000.  (i.e. - Unless they quadrupled their work force:  You wouldn't need to buy 4x as many computers, 4x as much software, 4x as much furniture, pay 4x as much salary, etc.  They might double the salaries if they doubled the staff but this gets amortized over not only the $4,000,000 but the other games they are creating at the same time.  This also helps them maintain a workforce at a profit and expanding the time on current, profitable business rather than completing a $1,000,000 game in a year and now have to go out and find more business to fill the slot.)

What is the net profit on $4,000,000 that would be considered a success?  20%?  That's $800,000.  Is that good?  bad?  I do not know... I am not their controller or CEO.  Originally, they planned on needing $1,000,000 to kickstart this game at an acceptable profit.  They effectively quadrupled that goal (their revenue) which, theoretically, quadrupled their profit.  They might have doubled the time that they are spending on this game but they quadrupled the revenue.

 

Remember, that final stretch goal of $500,000 ($3.5 - $4 million) basically is "improve the game". What if their definition of "improving the game" is putting that $500,000 on the bottom line so that they can make a business decision in the future to continue making additional expansions past the first one?  Again, the what if argument...

 

Also, I do not know about you but I was debited for my Pillars of Eternity copy.  They sold something to me and collected on it before they even made it.  I wish I had those payment terms to my customers.  That is better than C.O.D baby.

Edited May 8, 2014 by 600lbpanther

[Volourn]

"Obsidian could be banking on millions of affable foreigners, even Albanians."

 

L0LZ

 

P.S. Obsidian is not a 'small pizza' shop. Small pizza shops are lucky to have 10-20 employees MAX and pay them giddly squat. Obsidian has 100+ employee and they pay them upwards of 50k if not more not to mention all the fancy ebenfits I'd wager the typical Obsidian employee gets.

 

People try to pretend that Obsidian is some rinky dinky independent developer working in a basement WHICH THEY ARE NOT.  Stop trying to make beleieve that they cans ell 1 copy of their game and still make lots of money. LMAO

 

Plus, 'make a profit' is meaningless slang. that profit could be $10 meaning worthless or  $1million which in the big scheme of things is not that big long term, or it could be $100billion.

[600lbpanther]

P.S. Obsidian is not a 'small pizza' shop. Small pizza shops are lucky to have 10-20 employees MAX and pay them giddly squat. Obsidian has 100+ employee and they pay them upwards of 50k if not more not to mention all the fancy ebenfits I'd wager the typical Obsidian employee gets.

 

People try to pretend that Obsidian is some rinky dinky independent developer working in a basement WHICH THEY ARE NOT.  Stop trying to make beleieve that they cans ell 1 copy of their game and still make lots of money. LMAO

 

Plus, 'make a profit' is meaningless slang. that profit could be $10 meaning worthless or  $1million which in the big scheme of things is not that big long term, or it could be $100billion.

 

If you are going to quote me please quote me correct since I said "small business" which Obsidian is.

I am not sure I can respond to the rest of your statement since I don't really understand what you are trying to say. 

[StromIV]

nvm. 

Edited May 8, 2014 by StromIV

[Bryy]

Also, I do not know about you but I was debited for my Pillars of Eternity copy.  They sold something to me and collected on it before they even made it.  

They didn't friggin' collect anything towards sales and implying otherwise is very, very dangerous misinformation.

 

They collected towards the funding of the product. Which did not exist in anyway before you helped fund it. So don't you dare imply it was a pre-order.

[Stun]

It's a harsh truth nobody wants to ever talk about, but all those backers? Loss. Nothing has actually been sold. Things have been funded. Right now, Obsidian is working at a 73,669 loss.

Oh, it's a lot more than that. I read an interview with Feargus where he mentioned that the backer number has creeped up over the past year to somewhere above 130,000.

 

And of course, if you look closely at the backer tiers, you'll notice that many of them feature multiple copies of the game. Well? many of us do not plan to just sit on those extra copies. We're probably going to give them away to friends, or whatever. So add those to the total # of copies that haven't actually been sold.

 

 

Still, I don't know if you can call that a literal loss. First, as mentioned, the money we gave has paid for the game's development. Which means, they do not actually have to sell a single copy in order to break even. Second, Backers are a noisy bunch who will be advertising the game for free. If a game is good, then those 150,000 or so backers can do quite a lot to convince others to buy the game. Companies routinely give away free products for no reason BUT to generate this exact kind of word of mouth to get sales.

Edited May 8, 2014 by Stun

[Bryy]

I have no doubt Obsidian will break even (wow, such a weird concept for fundraising, right?). 

 

I'd actually be interested in seeing some sort of graph for most of the big name Kickstarter games.

[600lbpanther]

 

Also, I do not know about you but I was debited for my Pillars of Eternity copy.  They sold something to me and collected on it before they even made it.  

They didn't friggin' collect anything towards sales and implying otherwise is very, very dangerous misinformation.

 

They collected towards the funding of the product. Which did not exist in anyway before you helped fund it. So don't you dare imply it was a pre-order.

 

 

"So he'd collected nearly $300,000 in what amounted to preorders for a product he had never produced. And instead of selling 3,000 pairs of underwear, which he was prepared to make and ship two months later, he was on the hook for 23,000 pairs."

http://www.businessinsider.com/flint-and-tinder-jake-bronstein-kickstarter-2012-12#ixzz315rsIDu8

 

"It's something I think about a lot—there were a lot of moments I could have changed the economics on the Kickstarter campaign," Bronstein told us. "I could have turned to all the backers and said, 'Just order one item and then you can sample the product and I can make it for you at a profit."

http://www.businessinsider.com/flint-and-tinder-jake-bronstein-kickstarter-2012-12#ixzz315rkXqzl

 

"The following are projects I've heard about recently, either because they got widespread press or because they touched my social circle in some way:"

• Vuvuzelas for BP: Raised $6,846 with a pledge goal of $2,000. Estimated Profit: $5,437. Estimated Donations: $6,846. Profit percentage: 79%. Donation percentage: 100%.
• NIMBY - Industrial Art and DIY Space: Raised $17,897 with a pledge goal of $17,255. Estimated Profit: $16,161. Estimated Donation: $17,823. Profit percentage: 90%. Donation percentage: 100%.
• Hollaback!: Raised $13,560 with a pledge goal of $12,500. Estimated Profit: $12,241. Estimated Donation: $13,466. Profit percentage: 90%. Donation percentage: 99%.
• Decentralize the web with Diaspora: Raised $200,641 with a pledge goal of $10,000. Estimated Profit: $135,905. Estimated Donation: $180,051. Profit percentage: 67%. Donation percentage: 90%.
• Embodiment: A Portrait of Queer Life in America: Raised $12,568 with a pledge goal of $10,000. Estimated Profit: $11,397. Estimated Donation: $10,848. Profit percentage: 90%. Donation percentage: 86%.
• Punk Mathematics: Raised $28,701 with a pledge goal of $2,400. Estimated Profit: $20,224. Estimated Donation: $17,225. Profit percentage: 70%. Donation percentage: 60%.
• Power Laces: Raised $25,024 with a pledge goal of $25,000. Estimated Profit: $12,429. Estimated Donation: $12,904. Profit percentage: 50%. Donation percentage: 51%.
• Designing Obama: Raised $84,613 with a pledge goal of $65,000. Estimated Profit: $24,717. Estimated Donation: $30,010. Profit percentage: 29%. Donation percentage: 35%.
• Coming and Crying: Real stories about sex from the other side of the bed: Raised $17,242 with a pledge goal of $3,000. Estimated Profit: $10,773. Estimated Donation: $6,144. Profit percentage: 62%. Donation percentage: 35%.
• Glif - iPhone 4 Tripod Mount & Stand: Raised $137,417 with a pledge goal of $10,000. Estimated Profit: $98,950. Estimated Donation: $15,467. Profit ratio: 72%. Donation ratio: 11%.
• Lockpicks by Open Locksport: Raised $87,407 with a pledge goal of $6,000. Estimated Profit: $64,043. Estimated Donation: $4,922. Profit percentage: 73%. Donation percentage: 6%.

http://localwiki.org/blog/2010/nov/15/kickstarter-pros-and-cons/

_____________________________________________________________________________________

 

It appears I am not the only person out there that realizes companies exist to make a profit.  Profit is not a bad word and a company should not be ashamed to make money.  When I backed the Caverns kickstarter from Dwarven Forge it was under the impression the company was making a profit.  This realization is not only understood but us backers hope that Stefan and Jeff from Dwarven Forge make a great profit.

 

Also, forgive me if I missed it but I do not see anything stated in Kickstarters rules that profit is against the rules.

______________________________________________________________________________________

What is not allowed?

• Kickstarter cannot be used to raise money for causes, whether it's the Red Cross or a scholarship, or for "fund my life" projects, like tuition or bills.
• Creators cannot offer equity or financial incentives (ownership, share of profits, repayment/loans, cash-value equivalents, etc).
• Projects cannot resell items or offer rewards not produced by the project or its creator.
• Creators cannot promise to donate a portion of funds raised or future revenue to a cause.
• Projects cannot offer rewards in bulk quantities (more than 10).
• Kickstarter cannot be used to fund websites or apps focused on e-commerce, business, and social networking.
• Kickstarter cannot be used to fund software projects not run by the developers themselves.
• Kickstarter cannot be used to buy real estate.
• Projects cannot offer alcohol as a reward.
• Projects cannot offer genetically modified organisms as a reward.
• No self-help material (books, videos, etc). This includes projects that offer (or produce materials that offer) business, emotional, financial, health, medical, sex/seduction, or other self-help advice.
• No offensive material (hate speech, etc); pornographic material; or projects endorsing or opposing a political candidate.
• No tobacco, drugs, and drug paraphernalia; energy food and drinks; or nutritional supplements.
• No contests, raffles, coupons, gambling, or lifetime memberships.
• No bath, beauty, and cosmetic products; electronic surveillance equipment; eyewear (sunglasses, prescription glasses, and others); firearms, weapons, knives, weapon accessories, and replicas of weapons; medical, health, safety, and personal care products; or infomercial-type products.

https://www.kickstarter.com/help/guidelines

[Hiro Protagonist II]

I'm not sure what the point of your post is 600lbpanther.

[Bryy]

 

It appears I am not the only person out there that realizes companies exist to make a profit.  Profit is not a bad word and a company should not be ashamed to make money.  When I backed the Caverns kickstarter from Dwarven Forge it was under the impression the company was making a profit.  This realization is not only understood but us backers hope that Stefan and Jeff from Dwarven Forge make a great profit.

What the hay are you even talking about at this point?

 

Nobody is saying Obsidian should not be making money.

 

What we're saying is that they have not made a bloody cent yet from sales of Eternity, and insisting that they have is actually really bad for the general pool of knowledge.

Edited May 8, 2014 by Bryy

[Hiro Protagonist II]

I agree with Bryy. Once you take out Amazaon's percentage, Kickstarter's percentage, Taxes, Paradox's percentage before you even look at wages and running costs, then that 4 mil is looking less and less. Once you take all those percentages out, then look at wages for 2 years, running costs, and other things then that doesn't leave a lot of money. I'd be very surprised if they've broken even. Funding does not equal sales.

Edited May 8, 2014 by Hiro Protagonist II

[600lbpanther]

We should clarify our points…I agree.  It seems we are on different sides of the fence on this one.

 

Point #1:  I believe the cost analysis on what it would take to create Pillars of Eternity contained a profit from the get-go.

Point #2:  It seems the other thought is that the game was quoted bare bones with just enough to cover the development and the profit to be made on release. 

 

If that the latter is correct then I wonder a few things:

• Why would they take a chance on a very niche 2D Isometric Hardcore RPG game that their entire profit would come after development when the bulk of the sales possibly** could have been met before the game’s official release?
• Why wouldn’t they factor in a 10% profit (at the very least)?  Companies exist to make money.  Also, to help mitigate any potential drop off in sales due to a bulk of it coming up front.  It seems like a wasted sales opportunity.
• How does quadrupling the revenue while possibly only doubling the staff not offer increased profit?  (You only have to pay rent one time which I am sure is factored in their SG&A.  If they doubled their staff and doubled the time period to produce the game you would need a $2,000,000 barebones quote to do that.  How does $4,000,000 affect the bottomline when the staff was not quadrupled, nor the production time, nor the equipment, nor their insurances,  or their benefits.

[Bryy]

.... this isn't a hard concept.

 

They needed help funding a project. They threw in a free copy of said project once it was completed.

[Zwiebelchen]

Does anyone have the numbers on how many copies Beamdog sold on the Baldur's Gate: Enhanced Edition releases?

[Fatback]

I've looked into some card and board game kick starters and blindly got quotes on the production of said games most were walking out with a profits of around 2.50 to 3.00 per physical copy sent is includes estimated shipping costs. Those were ones that were successes. The ones that failed had projected profits into 10.00 12.00 range.

 

Now this is blind who knows if they were the same manufacturers or another million variables.

 

Also the ones that blew past the starting funding goal their stretch goals increased the parts price ie square cards instead of rectangles or 2 price box as opposed to a clam shell type, but was prob balanced out by bulk orders.

 

This is completely different than a video game production but still very interesting.

[MReed]

This has been discussed before (although not in a dedicated thread).  Part of the problem is defining your terms:

 

Net Revenue is what most people are talking about -- that is, the amount raised by selling the game less the direct costs associated with selling it.  Direct costs in this case covers things like fees that need to be paid to Stream and Paradox, but doesn't include the Sawyer's salary (or any other person who works for Obsidian).

Net Profit is what a few people are talking about -- that's the amount raised by selling the game less both the direct and indirect costs associated with the game.  The costs for developers would be included in this number.

 

In a conventionally funded project, "Net Profit" is the only number worth talking about -- if you don't cover your costs, then the investors who financed the game will incur a loss and will be less likely to finance future development efforts.  With IKickstarter, though, things get blurry:  the investors don't get repaid regardless of whether or not the game is a success or not, leading to the question of "is Net Revenue the appropriate measure of success for this game?"  From a purely financial point of view, it'll be interesting to see how the IRS (US federal taxing authority) is going to answer this question -- normally, you can write off R&D expenses against the revenue generated from sale of a a product, but that's based on the assumption that you'll be repaying investors (which could be yourself, if you self-financed), and that's not the case here.

 

Anyway, if Obsidian wants to receive conventional funding for a sequel, then they will need to have sales in the $4 million - $5 million range at the very least.  If they only achieve sales of $1 million, then the game will be considered a failure by the financial community.