Alex,
This market can't support all these systems,
it can't even support 3 systems.
Absolutely, I recently read an interview with Tim Sweeney at Epic about the economics of developing for the pc, some funny comments:
Question: I have one question that bugs me a lot.. If a game has a budget of about $2 million ( and I pressume most new games have a bigger budget) and a game is lucky to sell about a million copies. Most games sell less (I'm talking about games for the PC only). And a game retails about $30 to $40 . BUT (correct me if I'm wrong) the developer gets only 5%-10% (more for bigger names of course.). You only just reached your budget. There is no profit/ very small profit over capital ratio. Where does the developer houses get their money ? Does the budget include all salaries,computers,software etc. And the big buildings on the photos of these companies ?( does the bank own them or is there only a small office in that building ?).
Tim -- Actually, developer royalties are now in the 20-45% range (as a percentage of wholesale price) depending on track record. But, you're right, the numbers don't add up. Most games lose lots of money. Most developers are funded entirely from publisher advances, and never earn any royalties after shipping their games. Most publishers lose money and are only able to survive because of continuing infusions of capital from investors who are attracted to the glamor of the industry, hoping that the game industry will be the next Hollywood.
But, from a gamer's perspective, the industry's carnage isn't so grim. The best games do make money, enabling the best developers and the best publishers to flourish and continue to develop quality games.
When is this stock going to friggin move Scot?
No kidding. It is just amazing to watch. Volume is huge and the stock hasn't moved. It will......maybe earnings, which are not so far away anymore.
Scot |
