Unrealistic Sales Goals
interpolator
So, it's no surprise that AAA games require AAA funding but at what point does a game hit an unrealistic budget? I ask this after seeing this article today.
http://www.destructoid.com/tomb-raider-hitman-sleeping-dogs-all-failed-square-enix-249692.phtml
"Sleeping Dogs has sold an estimated 1.75 million copies to day, followed by Tomb Raider at 3.4 million and Hitman at 3.6 million. Square Enix blames these "slows sales" in part for its "extraordinary" financial losses this year."
What? Maybe I am naive but 3.4 million seems like a hell of a lot of copies. Are the projections at SE just too high or is this the new goal to have a successful title?
http://www.destructoid.com/tomb-raider-hitman-sleeping-dogs-all-failed-square-enix-249692.phtml
"Sleeping Dogs has sold an estimated 1.75 million copies to day, followed by Tomb Raider at 3.4 million and Hitman at 3.6 million. Square Enix blames these "slows sales" in part for its "extraordinary" financial losses this year."
What? Maybe I am naive but 3.4 million seems like a hell of a lot of copies. Are the projections at SE just too high or is this the new goal to have a successful title?
Replies
For most AAA games, I hope they are budgeted such that selling a million units covers the production and marketing costs of the game. If you absolutely need to sell several million units to turn any profit, your goal's are probably unreasoble (and/or you are making an MMO).
i mean, if Tomb Raider sold 3.4 million copies at ~$55 per copy (averaged from price reduction due to sales, and exchange rates etc. and it's still a new game so the price hasn't been lowered yet) that's still "only" $187m.
i don't know how exactly that can still be considdered a loss making figure, as that kind of budget is usually reserved for mmo's and the like... but there's probably a lot going on in the background we don't know about.
http://www.psu.com/a018894/Analyst--Tomb-Raider-must-sell-5-10-million-to-profit
sites like this don't help, i guess.
money money money. 60 bucks is too much to pay now days. we're also looking at 70 bucks for next gen. when will we stop being idiots as an industry and see that we're going down a fast spiral?
If anyone ever brings up, 'games used to cost 60 bucks back in the 90s too.' slap them in the face with inflation. 60 dollar games back then are equal to buying 36 dollar games now. 60 dollar games now are equal to buying 96 dollar games back then. (1992 vs 2012)
it really takes simple math to know if your game stands the chance to be profitable.
Still don't see how 3.4-3.6 million copies are failures, maybe they need to un-bloat their expenditure?
edit, And as Skanker said above, why pay full price when i can wait for a steam sale in a year or less?
I've offset myself a year for most new releases and paid a fraction of the price for the same game. If it doesn't have multi-player why bother paying full price for a pretty story when you can pay £5-15 for it on offer? A little bit of self control goes a long way and now i can buy a new game every other month for a few quid.
Edit;
The indie aspect has to come up too. cheaper games just as full fulling game-play wise, cheaper to buy and make.
However, I did kickstart countless indie games at 20 bucks.
Take a look at John Carter. The total expenditure was said to be in the region of $600 million. How could you ever recoup those losses? It's absurd to even think it would break even, let alone make a profit.
If we consider that the return may have been $4 per box-office sale on average (probably less in global terms), and the same again for a DVD for the sake of simplicity - you're looking at 150,000,000 box office sales or DVD sales or 1 in every 40 people on the planet. Absolute madness.
I think I got that right?
http://www.westegg.com/inflation/infl.cgi
it means our money is worth less now days. Back then you could buy more for less.
yet games had full campaigns multiplayer and much more. Now its 59.99 for a base game you want this DLC and that DLC more and more money for less and less
not to mention most games now days are broken upon release. It's become a pretty accepted fact.
granted, games are much larger and more complex now than they used to be, but just because they can be, doesn't mean they should be.
I find this pretty depressing. Thing is, it's not small, overlookable issues a lot of the time either. Game-breaking things like save systems that just don't work are being shipped in retail products
I think the core problem is speculation. As another poster mentioned, those are "targeted sales", NOT profits. These are also projected losses, NOT actual losses. Unfortunately the business world likes to operate on "risk" (speculation) so there's a lot of assumption that money will be in a certain place within a certain time frame.
True profits wont be known for years. All of those games will see a slight surge in sales when Steam offers them at a reduced price. The great thing about digital distribution is that your product has near zero upkeep value, is infinitely reproducible, and you can still charge for it.
There are also benefits to reporting losses such as tax breaks and reduced royalty fees. I've mentioned before that Hollywood's been doing this for decades.
http://en.wikipedia.org/wiki/Hollywood_accounting
edit: I don't think shady accounting is what's happening in this case, but I still think speculation is the core issue.
And with PC gaming resurfacing a bit, as someone mentioned Steam sales are something you can pretty much always count on later.
Tomb raided has to sell 5-10 million to make a profit? Isn't +/- 5 million a rather HUGE range?
Yeah I agree, I'm not going to buy Bioshock until a steam sale this summer. Same thing with Tomb Raider. I'm done buying games a full price then having them drop 50% in just a few months. Then get DLC'd to death. The other issue is in the past 60 bucks generally got you a good working game. Now 60 bucks gets you a game that at 1am after the midnight release there are 2 patches you need to download to fix all of the bugs that they didn't have time to fix since they jammed the game out the door.
The industry has hurt itself with shoddy releases and massive price drops just months after the release. It also doesn't help that marketing costs are through the roof for games. Those sexy trailers don't come for free. I love the work that studios like Blur do for games, but is that really necessary? I think Halo 4 would have sold extremely well despite the TV spots.
I personally think that part of Square's problem is the Final Fantasy and Kingdom Hearts teams. How much money was sunk into 14? And then into 14 again? Did FF 13-2 perform as well as they wanted? Is the demand for JRPG in the west what it use to be? It's way more complex than what Square says in their press releases.
That's kind of what I think BUT yes-all the points about game budgets and the economy are all relevant and true as well.
Yes, BUT people have largely lost faith in squeenix' ability to create a good one. hell, FFXIII was FFX with updated graphics, everything from the storyline to the world system and even the sphere upgrades was just TOO similar.
The stupid thing is, their fans tell them exactly what they want them to do: go back to the way the VII, VIII and IX were. those are the kind of jrpg people love.
FFVII's shortest possible play through without doing any of the sidequests is longer than it takes to complete XIII with all of the hunts. shameful.
Also, if this is the norm what type of affect do you think it is going to have on AAA titles in the future? While the payout can be huge, so is the gamble for publishers. I'm curious to see what changes could happen in development because of this.
Bravely Default.
Talk about farcry (pun intended) on the way things turned around and people like to hyperbole stuff.
As the saying goes "People who know less about something, the more opinions they have about it" perfectly sums up the situation many report on in this case, it honestly sad to see this happen.
Would be interesting to see how much of that budget goes into actual development, how much into marketing, how much into DRM implementation, etc.
Take the Mass Effect series. I loved ME2 so much that I happily own every DLC for it. ME3 on the other hand was a far weaker title imo. I didn't buy it for the multiplayer and the campaign didn't exactly blow my hair back. (Endings were fine.) As a result, I have no interest in the DLC.
In order to make money on additional content, a game needs to expand on what it does well and reward its core audience, not try and cover additional bases. If Bioware had released epilogs for each Mass Effect character in the form of DLC, they could have made a killing.
I'm curious to see how The Walking Dead ended up. It seems like episodic content would help minimize the gamble on part of the studio because they could halt production on a series that wasn't offering healthy returns.
Let me show you, in a nutshell how to make a game that's just flat out not interesting.
http://www.kickstarter.com/projects/1312036782/project-awakened?ref=search
The description is all about the character creation system. The engine they're using. The technology.
So what do I do in this game? Shouldn't that be the very first thing in your description?
http://www.kickstarter.com/projects/64409699/ftl-faster-than-light?ref=search
BAM! I am in space commanding a ship.
http://www.kickstarter.com/projects/1757963851/planet-explorers?ref=category
BAM! I am exploring a dangerous world.
http://www.kickstarter.com/projects/kingartgames/battle-worlds-kronos-turn-based-strategy-revisited?ref=category
BAM! RTS, so I'm controlling/building an army.
Interesting games in which what you do is clearly defined and interesting, set in an interesting world, sell like hotcakes. This doesn't just apply to indie/Kickstarter, just clear cut examples in isolation there.
I'm bored of games that play, look and feel like other games, or try to be artsy/different for the sake of it. Implementation details are not what shifts titles.
Throwing more budget at the problem just increases the amount of return you need to make and increases the weight of the risk.
I realize the hypocrisy here, given I repeatedly fall down the same traps. Identifying the problem is the first step towards solving it, however.
they project insane profits for most of their games and when the final numbers come back, it might still make a profit, but because they projected 3x the profit they call it a loss and that results in their stock price plumeting. in most cases ive seen it seems like pure greed on the part of publishers, always aiming for COD style profits.
If your game dosent have the words "Call of Duty" in it please stop "expecting" it to sell 5+ million units because it most likely wont. 3.4 million units for a game that came out like 2 or 3 weeks ago on Tomb Raider is an extremely impressive sales figure.
Square Enix is preparing to post major losses this year and the president is stepping down. Supposedly most of the losses are from restructuring so hopefully the games at least turned a justifiable profit.
The business end of some of these publisher's crack pipes has to be red hot.
i don't have a DS, but i've heard great things.
I remember paying $60 for C64 games when I grew up... games 1 - 10 people could program... Sometimes I'm surprised how cheap games are nowadays, but I guess they also sell more copies so it must even out.
^^ This, man I facepalmed when I read the original article. Its almost unbelievable.
Anyway I don't know, just throwing out a possibility. I try not to assume people are just delusional because I don't understand their behavior, might turn out to be true but doesn't seem like an interesting way to look at things.
IRONY!!!!
sorry i totally agree, it was just funny when i saw it
Yeah, that's what I thought as well. Tomb Raider is an awesome game- beautifully made.
I'm so sick of playing games that are really impressive and you can tell the developers put a lot of love and time into them, but they don't meet some crazy sales figure, so layoffs are necessary (I really hope this isn't true for Crystal Dynamics). Plus, from what I've seen, the projected sales figures aren't just to cover the costs of Crystal Dynamics, they are probably used to fund all Square Enix corporate people and their activities. So, the game might be a success for the studio, but it has to cover the costs of all the overhead at the parent company as well.
Takes one to know one.
[ame="
Basically, the last TR game before the reboot still managed to look like a game out of the 90's, with stiff game mechanics and somewhat sexy-angsty protagonist, this is around the same time Uncharted was around.
So you essentially had in the years post 2000, a game that played like the first TR game vs. Uncharted, which one would you honestly pick? And if the bust size of a character is going to decide that for you, then that's another story.
Lets also no forget that TR1 and 2 were the only titles that for their 'time' even tried improving the formula of the genre, the latter ones were re-hashes that only hardcore fans bought, and the sale figures and IP heritage trickled from there, with the IP almost coming to a full close with "Angel of Darkness" (seriously, it was said at one point the IP could be sold for peanuts and it still would be too much) before a series of 'HD Revamped' versions were published and carried on Nostalgia.
Seriously, I don't know what upper management expected at this point, when you have an IP like that of TR which at one point became a 'joke' and that only people that have blind IP loyalty bought, out of a market of several hundred million gamers I might add as your pool, expecting a rebooted version of the game to even sell 1 million copies in the opening month alone is a miracle considering the back story.
This game sold very well for what it had.
EDIT: As usual, a few of you peeps pointed out that these sale figures don't take into consideration Digital sales...AS USUAL, just so the Publishers can get Tax Cuts on so called 'failed to meet expectations' product, considering how well many 'underdog' games do in the Digital Market, I'm not surprised.
[ame="
It's a failed business model that's only going to get worse with the next (more expensive) generation of games.
Forgot about this thread..
If our money is worth less, shouldn't we technically be paying more now for the same thing? Prices for everything else goes up with inflation but if we're saying the price for video games has stayed basically the same doesn't that mean in relation to everything else they are getting cheaper?
Yes, they should, but it could be also argued that only now games are catching up in terms of retail price by many compared to how many were being payed for so little previously, by the inflation margin alone, some games should be costing now around the same price of a second hand rusty old car ($1629.74 to be exact).
Then there is issue that games are just games, you likely-hood of paying higher bills vs. paying higher games aren't going to work out honestly, or food alone being a large money sink. There is a reason the Gov't subsidized in the US millions to make cheap Corn, so that it can be used in alot of food to keep down the prices for alot of the stuff with their cheap lovely fattening fructose.
While games don't fall in that ball-park, it's hard to argue in selling one at an inflated price rate "just because that's how money is dictated" in our age will fly well, and many people will inevitably run game price numbers by movies, and compared them to that figures honestly of 'hours' worth of entertainment.
It's a slipper slope, not sure if in these years raising the prices will have positive feedback at all.
Back then you were paying for a physical cartridge, actual instruction books, in some cases extra maps / marketing, physical boxes, etc. Now days you don't get any of that. You are lucky to get an actual jewel case now days in most pc games. Don't even get me started with the prices big publishers want for fully digital games either.
See, the truth is, we are paying more for 'the same thing'. If we were paying the same amount, then games would be 36 bucks right now.
Inflation is weird, and I keep trying to wrap my mind around things like this, so if I'm getting any of the logic wrong, please forgive me. I tried looking for graphs that illustrate how much less our dollar is worth now than it was in the past, but I couldn't choose which one illustrated it the best, so here's a bunch:
https://www.google.com/search?q=graph+us+dollar+inflation+over+time&hl=en&safe=off&source=lnms&tbm=isch&sa=X&ei=oBtfUefXMOaayQGJ9YDgDQ&ved=0CAcQ_AUoAQ&biw=1473&bih=1162#imgrc=_
Either way you look at it, game prices haven't gone up enough to support the amount that game budgets have gone up. From what I remember reading, most games are funded entirely by the success of one or two ips the publisher has because of how successful they are. Almost everything else is at a loss.
good news though, we're almost 1:1 with the yen again!
People are voting with their wallets and right now smaller budget "F2P" is winning
The only thing that matters to them is that games 'cost too much new'.