Only 4% of games make profit says report [X360]

Monday November 24, 11:51 AM

For a business that is reportedly larger than the movie and music industries it’s surprising to learn that only 4% of games released ever go on to make a profit. That’s just one of the eyebrow-raising statistics revealed in a study undertaken on Ubisoft’s behalf by Californian outfit Electronic Entertainment Design and Research recently.

Just 4%? If that seems low it begins to make more sense when viewed in the context of the report’s other revelations. For instance the study claims that the standard Xbox 360 game sells around 216,000 units in total. Meanwhile yer average PS3 title sells an improbably specific 192,256 copies - seriously, you count ’em…!

Doing the math it would appear that a fair-to-middling game releasing on both PS3 and 360 platforms can look forward to 408,256 sales, give or take a few. That’s not an awesome performance on a global scale, hence, with development costs running into multiple $millions, the 4% factoid begins to look more realistic. Small wonder that most publishers launch on multiple platforms these days, and concentrate their efforts on guaranteed blockbusters wherever possible.

However a title’s prospects can be improved by adding such things as cooperative gameplay or multiplayer features. Indeed, sales jump a further 12,400 in the case of the former and by a beefier 25,000 for the latter - very desirable since that can deliver an extra $1million in revenue, as the report notes.

Elsewhere the report finds that around 60% of a game’s budget is spent in reworking or redesigning, which rather gives the impression that the greater part of development time, and cash, is spent getting it wrong. We also learn that downloadable extras - such as the GTAIV episodes - are an effective way of keeping a game out of the second-hand bins, which, of course, is a good thing for new game sales.

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