Why Next-Gen Titles Cost $60

Heartless Gamer writes "Forbes.com has up an article detailing what goes into the $60 price tag for next generation games. Publishers get about a buck per copy sold. 'The remaining $59 per game goes into many hands. The biggest portion — nearly 45% — goes toward simply programming and designing the game itself. Then the console maker, retailer and marketers each get a cut. Add in manufacturing and management costs, and depending on the type of game, a license fee. Some gamemakers also have to pay a distributor to help get their titles in stores.'"

Re:What about Wii?

[Kevin DeGraaf]

Easy!

On!

The!

Exclamation!

Points!

There!

Dude!!!

Re:oops :-(

[Anonymous Coward]

That's okay, you can probably blame it on the bootloader.

Next-gen?

[ebingo]

I'm sorry, but I always buy games for current-gen systems. What would be the point of buying a game for a system not out yet?

Order of magnitude

[tepples]

A "magnitude". Is this a mathematical or scientific term? How big is a "magnitude"?

An order of magnitude difference [wikipedia.org] is a factor of approximately ten. For instance, Mega Man X for Super NES was 1,280 KiB, which is an order of magnitude larger than Mega Man for NES, which was 128 KiB.

Re: Cost =! price.

[Garridan]

For independant game designers who make shareware games, price probably depends directly on development cost.

For the heavy hitters, development cost is a function of price, which is a function of demand. A game designer comes up with some idea, and passes it onto marketing. Marketing does some research, and finds that x gamers would be interested in a certain type of game. Then, with some simple calculus, find that y games will sell at a price of z for maximal gross sales of yz. Subtract out the price to manufacture, franchise fees and the whatlike, and you have a budget. If the budget is too small, tell the designer to shove off, or tweak the idea until it appeals to a more profitable market.

Consider the game Duke Nukem Forever. Marketing discovered that as time passes, market interest has decreased at a linear rate, such that a negative number of gamers are interested in the game. Also, as time increases, the development costs have increased at a linear rate. So, at this point, any reasonable price tag will result in a loss -- that's a negative sum of money. Here comes the stroke of brilliance: by selling the game at a loss, to a negative number of gamers, this is a product of negative numbers, so positive! Thus, 3D Realms' marketing department has determined that by delaying the game, since both market interest and profits are decreasing at a linear rate, the profit function increases quadratically! I figure, they're waiting until this profit will result in every employee earning a cool hundred million -- then they can release the game, and retire!

Re:It's all about the market

[animaal]

Well, as you're implying, Forbes aren't surprised. It's all economics. Forbes must think they can sell more issues by writing about high game prices than by writing about the price of trout in Belgium.

Re:What about Wii?

[LordRobin]

And guess what, Kratos wouldn't work as a Mii.

Sez you! I'd love to see a super-deformed Kratos rampaging through the Mii Plaza, decapitating Miis left and right!

------RM

Re:What about Wii?

[Anonymous Coward]

This! Is! Yahoo's! Legal! Department!

We! Demand! That! You! Stop! Violating! Our! Trademarks! Immediately! Or! We! Will! Go! RIAA! On! Your! Ass!