Only 80 Games A Year Will Succeed

0110011001110101 writes "Next Generation reports on the risks involved in game publishing and development. A report has been released suggesting that, in the next generation, as few as 80 games a year will turn a profit. Development costs in the next generation are set to rise from $3 -$6 million per title to $6-$10 million, with some cases surpassing $20 million." From the article: "Screen Digest's analysis shows that in the U.S. in 2004, titles based on licensed IP, such as Madden NFL 2005, sold 23% more units than titles based on original content. However, the short term revenue gains of licensed IP, does not necessarily translate into greater profits. Licensing costs are rising as IP owners become increasingly aware of the growing importance of the games medium."

Comments

That's the way it works

[Proc6]

That's the way it works, when, like movies, you are competing not based on the quality of the content/story/gameplay, but on the special effects and celebrities involved. The only way to top the last one is by outspending it.

Then there's the few examples like Napoleon Dynamite or Pi, that show you just how little money it takes to put an excellent story to the top of the charts and become insanely profitable. But of course the industries look at those as anomolies and go back to cranking out Batman Twelve with Tom Cruise and Lindsy Lohan.

Let's see some real innovative games, then I'll cry when only 80 a year succeed.

$20mil for a GAME?

[csbrooks]

That is just way, way too much money. Something's gotta give.

Why, I can make you a really top-notch game for HALF that much! (Flash is ok, right?)

Re:License == hit???

[Babbster]

I think you may be underestimating the videogame purchasing power of people who don't care about videogames: Parents and other relatives of small children. Licenses like Shrek, Spongebob and the like make nice bank in the videogame realm - no matter the quality of the games - because relatives of children are willing to buy those kinds of games on pure spec, figuring that their kids will like it because it has Famous Character X in it. Add in kids shopping with adults, grabbing an adult's arm and saying "Can I have that Batman game?" and you've got nice sales. Enter The Matrix was panned by virtually every "serious" gamer, both for gameplay and for bugs, and it sold tons.

Trying to judge the overall videogame market by a) what's good and b) people who are so into games that they talk about them on the Interweb ignores a huge portion of real world sales.