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Most Games Make No Profit

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Most Games Make No Profit

Hard as it may be to believe, a California-based research group, Electronic Entertainment Design (EEDAR), has somehow discerned that only four per cent of games make a profit. The research, carried out for Forbes, took account of some data relating to around 6,000 games, catalogued since 2006.

Forbes intention in commissioning the research was to determine whether it was possible to create a game, using 'ingredients' that made other games successful, to make one 'super-game' which would be guaranteed commercial guess. EEDAR's conclusion was, simply put: no.

Apparently 60 per cent of the average game's budget goes towards it being redesigned or reworked. Statistically, adding features such as co-op and competitive multiplayer almost universally lead to an increase in sales - the better these modes being the better the boost to sales they provide.

Given companies such as EA and Ubisoft, which publish an almost ridiculous number of titles throughout the year, still manage to stay in business, one has to assume that a small proportion of games that do make a profit do so to enough of an extent that they compensate for the failures.

Update:

It turns out I was right to be puzzled about that four per cent figure. EEDAR was misquoted by Forbes; the four per cent is games that enter production. Of those that actually make it to market 20 per cent turn a "significant profit" - not quite such bad going then, games industry.

Link:

Forbes.

filey

November 24, 2008, 9:38 pm

It's all because game companies use the same accountants as the music and movie industry, so they can basically tell the people who actually do all the work, that they wont be making anymore money then they were given in the advance.

Luan Bach

November 24, 2008, 9:41 pm

I was going to say something very similar to filey above. It depends who the "profits" are for.

Paul Nicolson

November 24, 2008, 9:54 pm

what a load of tosh !!!





Sony make &#1633 for every title sold on the sony platform ? so figure that out

Gav66

November 24, 2008, 10:05 pm

So, by the sounds of things, console makers sell their hardware at a loss, and now the game developers are claiming the same thing. Sounds like a great industry to be in .... where do I sign up?

Wilfried

November 24, 2008, 11:20 pm

It makes it really hard to believe since there are so many games developpers out there.





@Paul: where did you pull that figure from?

TL1210

November 24, 2008, 11:39 pm

There must be an awful lot of rubbish games out there that no-one knows about.





It's either that or maybe there's a lot of games released as shareware thats is included in that 96%.

Luan Bach

November 24, 2008, 11:50 pm

It has been clarified that the 4% figure is for all games the entered the production phase. For released games, 20% of them made a profit.

ilovethemonkeyhead

November 25, 2008, 2:31 am

surely wii shovelware developers must be making a profit, otherwise they'd have stopped pumping their tripe onto the poor little wii...

Paul Nicolson

November 25, 2008, 4:50 am

@Wilfried





I hvae a friend who works for Sony and all developers must pay a license fee to use the sony platform, works out around &#1633-5 per game. Sony games are always more expensive than the same game on a another platform, have a look. :-)

Xiphias

November 25, 2008, 5:42 am

@Paul: I'm fairly sure nintendo and microsoft do the same. (Although I guess the cost for microsoft's 'games for windows' label is fairly low).





I find it interesting that they say mature titles on the XBox 360 are more popular, it makes you wonder whether they've got enough data for statistical reliability or whether GTA is biasing the results too much.





There are a couple of other areas that'd be interesting like how many big new games (i.e. not just sequals) come from the big companies and how many come from small developers.

james1000

November 25, 2008, 2:52 pm

"I find it interesting that they say mature titles on the XBox 360 are more popular".





Surely this is down to the fact that maturer people have more money to spend.

Xiphias

November 25, 2008, 6:25 pm

@james: I got the impression they were talking about the US rating system for gore, violence and other unpleasentness which uses 'mature' and 'teen' lables rather than the game's intended target audience.

Wilfried

November 25, 2008, 10:13 pm

@ Paul: I have to say that I have not found that PS3 games were more expensive than on 360, well, not in the Channel Islands anyway (been to Woolies and local gamestore to check today, got to admit you made me curious). Thanks for your reply btw.

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