Sure they are. The two aren't mutually exclusive. The larger companies should have room to do both. No major record label restricts their business to albums they expect to sell platinum or better. As long as there is money to be made -- and there certainly is -- there's a place for it.Originally Posted by Bojay1997
Of course they aren't and most large companies including Ubisoft have all sorts of smaller revenue generating projects of opportunity. That may mean download only titles, iPhone and cell phone games, handheld and even smaller console releases. Having said that, when you're a company that needs to deliver hundreds of millions of dollars in profit every quarter to your stockholders like EA or Ubisoft, you're not gonna do it with tons of smaller projects. If you don't have at least one profitable triple-A title each quarter, you won't make your profit for the year, bottom line.
To some extent, you and Destructoid took what this guy said out of context. His point was that rather than doing 3-4 modest budget games where some will be flops, the only profitable business model for large publishers is focusing on Triple-A titles where all of them are huge sellers. That seems well supported by the financials for triple-A games when compared to everything else. Whether you like it or not, those are the games that continue to sell and generate huge profits for publishers. Can you be successful creating smaller games that sell fewer units? If you're a small company like Treasure perhaps, but focusing primarily on smaller games does not appear to be a viable model for larger companies.
Actually, to the best of my knowledge, every single one of those games ARE profitable, or at least broke even. That's why I listed them.
Certainly publishers lean towards the huge, triple-A releases that sell ten million units, and these types of games are probably where the bulk of Ubisoft's revenue comes from. Ubisoft has a history of shitting out their "B" games - Wartech, for example. Even worse is their ridiculous "Imagine" series, which has something like fifty entries: the very definition of market saturation. No wonder their perspective is screwed up.
Companies like EA and THQ with their partner programs are reaching out to smaller developers and trying smaller projects. I hope that it works out for both parties, because XBL and PSN, and to a lesser extent the DS and the Wii, have proven that just because a game doesn't have a budget rivaling your average summer blockbuster doesn't mean it can't make money.
I don't get why people say games that aren't AAA can only be profitable with smaller companies. Why can a smaller company profit on a smaller budget title that a larger company cannot? It's probably because the small budget games that these larger companies are making might as well be shovelware.
Take X Men Origins: Wolverine. The development costs were probably 100 times lower than a game like FF13. FF13 sold five million while X Men Origins sold one million. The graphics may not be pretty but the game is pretty good.
Bigger budget titles need to sell much more before they make a profit and even most big budget titles don't sell that much more than a smaller budget title nowdays. EA has been amazing this gen, but look towards them. Almost every release they've done this gen has been a AAA title yet they might just hit a million across both systems per game(Saboteur and Army of Two the 40th Day aren't even close to hitting that mark.) The developers just think that every game has to have the best graphics in order to sell. Note to developers: Graphics don't have to be amazing, just create a decent length game with great gameplay and throw us a demo to try out before we purchase it. Most of us will pay for a good game.
Last edited by kupomogli; 09-08-2010 at 04:09 AM.
Everything in the above post is opinion unless stated otherwise.
Ubisoft have been moaning for ages how they can't sell anything on the DS anymore. They blame this on 'rampant piracy' the DS suffers.
Whilst undoubtedly an issue, I suspect the legions of hackers are not pirating their DS to play the latest imagine/petz titles. They over saturated market with increasing mediocrity, plain and simple.
And plenty of non AAA games go on to be profitable, some very much so. Although it is a shame about Little King's Story, fantastic game!
I reject your reality and substitute it for one of my own!
Out of 120+ DS games, I have 1 published by Ubisoft and it's not even a game... My Japanese Coach. It's not piracy, they just release crap mostly. Like EA, and the lessor players of "Clueless Inc".
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Well, then you obviously don't know what the hell you are talking about. Just because a game exists doesn't mean it is profitable, that's the most asinine assumption I've ever heard.
Very few games are profitable. According to the Electronic Entertainment Design and Research Institute, just 4% of games that go into production ever turn a profit and only a meager 20% of released games ever turn a profit. (Source: http://news.cnet.com/8301-13506_3-10106612-17.html ). That's why companies like Acclaim go out of business, they get tons of profit from Mortal Kombat and then lose 10x as much money on horrible games.
As for downloadable games, they can be quite profitable because they do not need to pay for any hardware costs associated with production. Their design teams are often small, so a few hundred thousand sales pays everyone off and gives the company a profit.
But some titles you listed are plain ridiculous. 3D Dot Game Heroes has barely sold 163k units in North America, hardly enough to be a success. http://www.vgchartz.com/game.php?id=37830
And even more hilarious is Earth Defense Force 2017, it's sold a whopping 28.7k units,. http://www.vgchartz.com/game.php?id=2986 Huge profit margin there!
The mark is always one million. All consoles have "Platinum Hits" or "Player's Choice" releases for games that sell 1,000,000+ units. While you can make some small amounts of profit with sales less than that, it isn't going to be enough to sustain a business and bring money towards future projects.
Sorry for the lesson but you seem pretty naive.
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That's oversimplifying things a lot.
You could sell 100 copies in north america and still turn a profit as long as sales in other territories or on different platforms were sufficient to recoup dev costs.
If you're licensing someone else's game for publication, that changes the economics as well, since the dev costs are not an issue, and you only need to pay royalties on units sold.
Not every game needs to sell a million units per platform per territory to be profitable.
Because the overhead for a smaller company is typically a fraction of that of a larger company and because smaller companies don't necessarily have to generate substantial returns for investors and shareholders. For a company of say 15-20 people, you probably don't have an HR department, legal, marketing, etc...You contract out for these services and don't pay people to sit there whether you need their help that day or not. Similarly, if you have a privately held company, if you only make a small profit, but everyone gets their salary and bonuses and you still have enough to pay down your line of credit, that's a viable business model. For EA, Ubisoft, etc...that's not a viable model. That's not to say that they can't make money on smaller products, but it's not enough to sustain them or keep them growing. Just because you and most of us here would buy a good game with less than great graphics does not mean most people who buy games would. That's the reason games like Little King's Story which is amazing will never sell millions. Most people just don't care.
Just have to say you really don't know what you're talking about.
3D Dot Game Heroes is a localization. You are aware that Atlus is not the developer correct? They offer a certain amount of money in order to have the rights to localize the game for sale in a specific area.
XSeed also does localizations. Their first game released was Wild ARMs 4 in 2005. In all their releases, only Valhalla Knights, which sold 170,000 has sold more than 3D Dot Game Heroes. So how come this company is in business since 2005 and has released as many games as they have?
Also. Atlus stated that Demon's Souls sold far more than they originally expected. According to news sources, they expected 75,000 where as of now it's 400,000. If they were already making profit then they've just made that much more. 75,000 is much lower than 163,000.
Last edited by kupomogli; 09-08-2010 at 11:43 AM.
Everything in the above post is opinion unless stated otherwise.
Speaking of assumptions... I brought a flag.
You're obviously jealous of G-Boobies pure awesomeness and swave style.
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It really depends on what the licensing fee they paid was, how much it cost to localize and what they spent on marketing, distribution, etc...Nobody except Atlus really knows if 3D Dot Game Heroes or any other release was a success.
I don't know what any of the fees, but neither does anyone else. 160,000 is a big number for a niche title. That's why I also mentioned Demon's Souls which Atlus released not only the regular version but also the Limited Edition and hyped it up quite a bit, then we come to find out that they only expected 75,000 which I'd assume is a profit with Atlus being a developer that made their money on niche titles.
Last edited by kupomogli; 09-08-2010 at 02:05 PM.
Everything in the above post is opinion unless stated otherwise.
Of all the games to pick on, Pikmin? Really? The sales weren't bad, but I don't believe they reached Nintendo's hopes at all. Most of its following has come in recent years, after people started to discover and appreciate how inventive and fresh Pikmin was. I doubt it would've gotten any releases past 2 if not for Olimar's inclusion in Smash Bros., which is like an instant shot of popularity for any franchise. I haven't played Little King's Story, but to suggest that Pikmin got an undeserved level of success is a bit of a joke. Whether Little King's Story is better or not (and I kinda doubt it's so massively better as you seem to suggest), Pikmin is still amazing and deserves MORE attention than it gets compared to the truly big-name franchises in Nintendo's library.
Pikmin is the best thing to come out of Nintendo that gen.
For fuck's sakes...
Show me the section of my post where I state, and I quote ye again, "a game exists, and therefore it is profitable". You cannot, good sir, for those are not my words. They are yours. Your assumption, actually, and you know what happens when you assume. Except for the 'me' part in this instance.
There are something like eighty four billion iPhone and Droid games available, most of which are complete trash and therefore languish at the bottom of the apps store. The Wii and DS also suffer from the shovelware affliction: scope out your local Wal-Mart and Best Buy. Then you have freeware or budget PC stuff and the ultra low budget stuff slapped on a CD and sold on a kiosk at your local mall bookstore. Did the guys behind your data take those games into account? How many years of financial results are they using? Are they taking merchandising and DLC into the equation?Very few games are profitable. According to the Electronic Entertainment Design and Research Institute, just 4% of games that go into production ever turn a profit and only a meager 20% of released games ever turn a profit. (Source: http://news.cnet.com/8301-13506_3-10106612-17.html ). That's why companies like Acclaim go out of business, they get tons of profit from Mortal Kombat and then lose 10x as much money on horrible games.
Your problem here seems to be that you take statistics and blindly compare them with what you ASSUME (there we go again!) to be reality. Statistics are stupid, dangerous things that shouldn't be played with lightly, much like a loaded gun or your genitalia. The fact is, and we'll point out other instances of this later in this stupid screed, you seem to think that all games are produced according to the triple A revenue development model, which is incorrect. Nowhere in that article did I find anything breaking down exactly how budget relates to profit for that lucky twenty percent. All I read was bitching about how many first person shooters there are.
Think with your brain for a minute: if eighty percent of games were not profitable, then twenty percent WERE profitable, and nowhere in that little data nugget did I read anything that contradicts anything I've said so far.
Moving along.
Indeed.As for downloadable games, they can be quite profitable because they do not need to pay for any hardware costs associated with production. Their design teams are often small, so a few hundred thousand sales pays everyone off and gives the company a profit.
Profit is relative to the costs incurred to create and distribute something. Here's the important thing I believe you're missing: NOT ALL GAMES COST MILLIONS OF DOLLARS TO MAKE.But some titles you listed are plain ridiculous. 3D Dot Game Heroes has barely sold 163k units in North America, hardly enough to be a success. http://www.vgchartz.com/game.php?id=37830
EDF is a proud member of the 'Simple 2000' series of games produced in Japan. So is Onechanbara. These games are made as cheaply as possible and sold at a bargain price. Again: profit is the difference between what it costs to make and distribute something and how much you make in sales.And even more hilarious is Earth Defense Force 2017, it's sold a whopping 28.7k units,
Here's a stumper for you: if Earth Defense Force was such a tremendous loss, why are they making a sequel?
Here we go again with your assumption that every game produced costs the same as fucking Assassin's Creed or GTA. Untrue. In fact, those games are still aberrations.The mark is always one million. All consoles have "Platinum Hits" or "Player's Choice" releases for games that sell 1,000,000+ units. While you can make some small amounts of profit with sales less than that, it isn't going to be enough to sustain a business and bring money towards future projects.
There's a lot of play between a game that sells eleven million copies and still loses money (Enter the Matrix) and a game that sells two hundred thousand copies and is extremely profitable (Persona 4). Not every fucking game released for download or to brick and mortar is a blockbuster with the budget of a Hollywood movie. It's still possible for something like Demon's Souls or Blazblue to sell a few hundred thousand units and make their developers and publishers money. If it weren't, we sure as Hell wouldn't be talking about games on the internet like the idiots we apparently are, because we'd still be rocking our VCS consoles and bitching about the graphics in Combat VII.
I can see you're new, so I'll assume you're getting over a bad case of GameFAQs or something. Bad troll is bad, etc. etc. etc.Sorry for the lesson but you seem pretty naive.
Next time, why don't you try being civil instead of a self-righteous asshat if you disagree with something I've said, and maybe we can have a friendly debate instead of measuring our internet nerd-dongs. Wouldn't that be nice for a change.
Also, Acclaim never released Mortal Kombat. Midway did. And yes they did release "horrible games" such as Carnival Games but they turned out to be extremely profitable, selling in excess of 1 million copies.
Of course Midway still went bankrupt but that was due to a multitude of reasons and cannot be blamed on games sales alone.
I reject your reality and substitute it for one of my own!
To quote Obi-Wan, "You will find that many of the truths we cling to depend greatly on our own point of view.""The games that are not triple-A are not profitable anymore."
It may be that, for Ubisoft, non-AAA titles are indeed not profitable. Without doing any real research, I'm sure Ubisoft has hundreds of employees and spends millions of dollars on things like advertising and rent. I'm sure to a company like that, AAA titles ARE more profitable. I have no doubt that Ghost Recon 18 or Mortal Kombat 27, no matter how awful and how much we complain about it, will sell more copies than the next "Pikmin". There's a reason they keep churning out Madden games, you know.
But newer, leaner companies don't need AAA titles to turn a profit. I just read a story about the two brothers that made Doodle Jump for the iPhone. Doodle Jump sells for $1. So far, they have sold 3.5 million copies. One Apple takes their 30%, that leaves about $2.5 million for the brothers to split. I'm filing Doodle Jump under "profitable", especially since the brothers run the business out of their home.
Obviously, the "mammoth" model that companies like Ubisoft and Activision and Electronic Arts and dozens of others use has to have a ceiling. I believe they are pouring too much into developing single games at this point, and eventually, that tower (and business model) will topple.
Don't criticize my opinion until you play both. I played Pikmin directly before Little King's Story, and I still haven't finished LKS so my opinion my change. But as it goes currently, I'd give Pikmin about an 8.25 and LKS a solid 9. Pikmin has superior controls to LKS (disbanding your party and moving units is much easier), but that's it's only plus. Boss battles are joke until the very last one, simply throwing a horde at any creature wins. Classes are limited to 3, I think LKS has around 15. I enjoyed Pikmin a lot and will gladly buy Pikmin 3 if it is ever released, but LKS is utterly amazing. If you like Pikmin go grab LKS ASAP and then you'll thank me later and we'll be buds.
Basically, if I interpreted your post properly, you're just saying my assumptions were incorrect. Well sorry for that but they all seemed pretty logical at the time.
Obviously you can turn a profit on a low number of sales when the development costs are low, no rocket science here. But you aren't turning much of a profit, dollar-wise at least (though you could be percentage-wise).
The point of the original article was not the literal interpretation of "profitable". If you make just one penny after sales - costs, then you are technically "profitable".
The point is that it's probably not worth your time to spend thousands of hours in development just to make enough money to cover the labor / royalties / fees and have pennies left over.
The context of "profitable" in this case is "substantially profitable", with yielding enough profit to pay CEO bonuses and give raises to your coders. I guess that's why we disgree, because of our interpretation of the word.
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You must have posted when I was typing.... this post pretty much sums everything up. I agreed with the Ubisoft article because I was looking at it from their perspective, not from the perspective of little companies.
WTB Clayfighter Sculptor's Cut Manual Only... PM ME!!
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