70% of games lose publishers money?

By Justin Mann on August 12, 2008, 8:00 AM
“Blockbuster” games often come accompanied by steep price tags, with development costs and advertising alone setting publishers and developers back by a significant amount. The idea, of course, is to get all that back with good sales. Apparently that doesn't happen as often as you'd think, according to a former Sony exec, stating that 70% of games end up losing companies money. That's a pretty steep figure, and if true, would just show other companies around the world that game development isn't a money-maker.

Can those words be taken at face value? Are games really that much of a loss? It doesn't help his statement much that he left Sony in 2005 – and it's been very public that Sony's game division has struggled in the past. What would studios like Rockstar and publishers like Take-Two say to that? What's more interesting is his supposed solution to the funding issue – micro transactions and in-game gambling. The former has proven to be successful, with services like Xbox Live making decent money off selling small things at low prices in high volume. The latter, however, doesn't seem to be a solution.

Or, better yet, perhaps most games losing money is just an opening for independent developers to find more ground. If most games lose money, a game developed under the radar on the cheap could prove to be a huge business success.




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