A little earlier today, We told you how Square-Enix was a little disappointed with the sales of some of its big titles, including the recently released Tomb Raider, which has shifted 3.4 million units since its release earlier this month. It’s just not enough, and according to one industry analyst, those big-budget blockbuster games need to sell between 5 and 10 million units to make any money.
Industry analyst Billy Pidgeon told Gi.Biz that such games are becoming ludicrously expensive, blaming Square-Enix’s woes on its focus on single player IP.
“The AAA market is extremely competitive. Most of Square Enix’s franchises are single player games, which are less popular than multiplayer. Square Enix has been a leader in that sector, but now faces stronger competition from multiple publishers, both large and small, including Bethesda, Capcom, Xseed, Atlus and Level 5.
Square Enix’s franchises are well established and require ever-higher production budgets to match and surpass past performance. The latest Hitman and Tomb Raider sold in the three million unit range and got Metacritic ratings above 8.
Those numbers would rate as successful for JRPGs that earn more from vendors as exclusives and have manageable budgets. But for games with development budgets approaching $100 million to be truly profitable, ratings have to be above 8.5 and sales need to be in the five to ten million unit range.”
Square-Enix has published some of my favourite very single-player games this gen, like Tomb Raider, Deus Ex: Human Revolution and Sleeping Dogs – and it would be shame if this nonsense forces the publisher to start pushing out needless multiplayer that gets tacked on everything (much like Tomb Raider’s needless multiplayer) then I think we all lose.
With the current climate, I really don’t see any games that aren’t Call of duty, Battlefield, or FIFA doing those sorts of numbers.
Last Updated: March 27, 2013
Sir Captain Rincethis
March 27, 2013 at 15:40
And people out there groan loudly when people like me state that games like CoD are fcuking with the entire industry? Give me a break, this is evidence enough.
Matthew Holliday
March 28, 2013 at 09:21
Im confused, how is this CoDs fault at all?
the fault lies in the cost of production, Not in CoDs sales numbers.
Sir Captain Rincethis
March 28, 2013 at 14:28
Eh? Dude, the marketing costs to get the attention of the average gamer, people are using CoD in this thread, is over 200% of the PRODUCTION COST. So no, the production cost has nothing to do with your $60 dollar game. As a matter of fact, there are many reports out there that say that making CoD is CHEAPER now because most of the coding, which is reused all the time, hence the often used CUT AND PAST references ,is cheaper. CoD’s sales numbers have everything to do with it. It’s like people who like Jersey Shore, it is SHIT, but because the masses have now decided people love ‘reality’ tv other channels like SciFi have died. Not sure if that makes any more sense to you?
Sir Rants-a-Lot Llew
March 27, 2013 at 15:42
What the hell? How!? Why!? Why is the development costs so high to begin with in an SP game?
There are no servers to run, no network specialists/coders needed. You have a game that focuses on SP. So how can your budget be even bigger than online games? How?
Am I just ignorant here?
Sir Captain Rincethis
March 27, 2013 at 15:47
Not at all mate. I think what he means is that mainstream only want MP, as in, games like CoD etc. I am not saying CoD is shit, it isn’t in many ways, but what the genre, and the appeal to many young kids has created, is a need to HAVE to be able to insult yo mamma.
Matthew Holliday
March 28, 2013 at 09:42
adding multiplayer is not what the mainstream wants, mainstream will take any multiplayer it can get, but multiplayer is only added by companies to make more money out of their games, extending the lifespan of a game and increasing opportunities for microtransactions.
Bioware didnt do any testing to see if mass effect fans wanted multiplayer, if they did tests, they wouldnt have added the multiplayer at all. (they just got lucky that the multiplayer was awesome)
Sir Captain Rincethis
March 28, 2013 at 10:06
If the mainstream is CoD, then I would have to say it IS what they want. CoD knocked the socks of ME sales, not for its 5 hour story line, but for the ability to swear about other peoples mothers 🙂
Sir Captain Rincethis
March 27, 2013 at 16:22
PS. Am I allowed to sigh? 🙂 Or only one a day?
Sir Rants-a-Lot Llew
March 27, 2013 at 17:19
Sigh away bud. Sigh away
umar bastra
March 27, 2013 at 16:01
We should have a super bru for games, predicting sales and review scores, could be fun lol ….
Anon A Mouse
March 27, 2013 at 16:07
I’ll suck at that as well…
Anon A Mouse
March 27, 2013 at 16:10
You mean to say you spend $100 mil on a game at it’s still not out of Beta when it gets released?! How on earth are any developer going to survive such ridiculous amounts of money wasting?
Jim Lenoir (Banana Jim)
March 27, 2013 at 16:50
They’re not… not at the rate they’re going. Maybe this is why all those old developers (who we love to ridicule) have moved away from AAA to mobile/iOs gaming, because they spotted this funk ages ago.
HvR
March 27, 2013 at 17:52
Less than $10 mil is for actual development (paying artist, writers and software developers). Most of these development companies have become bloated entities, AAA they typically spend twice the development cost on marketing and about the same as development cost in legal fees (copywrites, IP protection etc). Of course when the crap hits the fan they fire the 100 developers first and make the sequel by out sourcing it to small development house.
matthurstrsa
March 28, 2013 at 06:49
Aliens: Colonial Marines anyone?
Ultimo_Cleric_N7
March 27, 2013 at 16:12
Thats the point though Geoff. These accountants and board members are coming in knowing nothing about the insustry. All they see is the success of CoD (probably the only game they have ever heard of) and assume any game can make that many sales if enough money is thrown at the problem.
Worst of all, they dont talk to the consumers to ask what they want.
HvR
March 27, 2013 at 17:43
don’t sell the Board monkeys and pen pushers short, they also know FIFA, Madden and Sims.
Matthew Holliday
March 28, 2013 at 09:36
Wrong
They dont change their accounting team and board members after every game. These are the same accountants and board members that handled the accounts for all their previous IPs.
It is all down to production costs, and the alternative is not having the games at all, they either have to make do with production costs, add multiplayer to extend the longevity of the game or stop making games.
take your pick.
Slade Boender
March 27, 2013 at 16:19
I wonder if accountants play anything other than suck of poopy modern moronfare 3
Anon A Mouse
March 27, 2013 at 16:40
Yes I do actually. And I’m not a big fan of CoD either.
Slade Boender
March 28, 2013 at 10:26
Ha!
silverscorpio
March 27, 2013 at 16:50
They are buttering gamers up to charge $70 per game. This is a stunt because you dont worry about a games sales a month after release especially when it sold 3.5 mil during the first month.
Jim Lenoir (Banana Jim)
March 27, 2013 at 16:54
But the joke’s on them, higher prices won’t translate to higher sales. There’s no guarantee that they’ll get similar levels of sales either. Just because you got 3.5 million sales at $40, doesn’t mean you’ll get 3.5 million sales at $70 (and definitely not 5 million sales).
You might get individual titles performing exceptionally (not necessarily COD next-gen) but the game industry in general will look a little sicker…
silverscorpio
March 27, 2013 at 17:14
I agree. Playstation and XBOX games are going to R 800 to R 900 per game in South Africa should the publishers get their way. Now looking at that I realized that Buying 5 games is going to work out the same price as the console itself. Even buying 2 games a month is going to work out between R 1600 to R 1800 per month. You need one hell of a big gaming budgets to be able to maintain the gaming hobby. So realistically most gamers will buy 1 game a month. If you have multiple releases a month, 1 publisher will get your money and the rest will lose out or have to wait till the next month. In the end the publishers will lose out big time. Poor Suckers.
Aussious
March 28, 2013 at 16:26
And then they cry foul when we descend upon the shores with swords swinging and guns blazing because we be turnin’ Pirates!
Tarisma
March 31, 2013 at 19:58
Or you just wait 2 or 3 months and get the game second hand or on special from one of the 20 or so retailers. The game ain’t gonna vanish after 2 months. In fact it may actually get better (developers will have done testing) via patches. Furthermore you don’t end up buying shit, like Duke Nukem.
HvR
March 27, 2013 at 17:48
Bet you they still break 3 million at $70. Last 10 years gaming feels like an abusive relationship. We stand up, wipe our chin and later we come back with extra $10 for more.
Sir Captain Rincethis
March 27, 2013 at 17:57
Said like a sir!
Mark Treloar
March 27, 2013 at 18:17
This will be put to the test in September when GTA V is released
Purple_Dragon
March 27, 2013 at 17:40
Fuck man, we are already paying more cash for the new games. I can’t believe tomb raider and bioshock are hovering around the R700 mark.
Snormossel
March 28, 2013 at 08:27
*cough cough R430 for ze master race…
Verrayne
March 28, 2013 at 09:19
I got mine for R351 from takealot…
Snormossel
March 28, 2013 at 12:35
Are you talking about Bioshock or Tomb Raider? Coz Bioshock is R451 on takealot! Or did you pre order?
Verrayne
March 28, 2013 at 12:38
http://www.takealot.com/gaming/action-adventure/tomb-raider-2013-pc,11035671
Bought it yesterday.
Snormossel
March 28, 2013 at 13:50
http://www.kalahari.com/games/Tomb-Raider/372/46050061.aspx
Next time use kalahari, they almost always have the best prices!
Verrayne
March 28, 2013 at 14:14
That is a good price. But i love takealot with their same day delivery.
Snormossel
March 28, 2013 at 14:28
Yeah thats quite sick! I bought shoes the other day and got them within 4 hours!
Wtf101
March 28, 2013 at 14:20
Yeah, just too bad kalahari apparently takes pleasure in screwing over customers when it comes to games that are supposedly on special…
Snormossel
March 28, 2013 at 14:28
Thats definitely possible, but I usually shop between kalahari, takealot, bt games and steam to see where I can get the best price. I also prefer physical copies, so steam usually loses out.
Matthew Holliday
March 28, 2013 at 09:24
we’ve had whole articles on this in the past, theyr not buttering us up to charge 70$, theyr buttering us up to have more microtransactions and freeware
OVG
March 27, 2013 at 17:08
POPPY COCK!!
Jim Lenoir (Banana Jim)
March 27, 2013 at 17:23
Forsooth!!
silverscorpio
March 27, 2013 at 17:32
According to the analyst Square Enix is strugeling because of their focus on singleplayer games but did he not know that Tomb Raider does have a crappy multiplayer tacked on. Another analyst said that the industry is slowly moving away from multiplayer. WHAT?
Purple_Dragon
March 27, 2013 at 17:39
I reckon the games market will die or suffer if it moves completely away from SP. Fuck, I won’t be gaming if that is the case.
But I don’t think that will happen for a long time if it ever does. I think a lot of talk around MP and SP is scare tactics.
Purple_Dragon
March 27, 2013 at 17:32
I’m just waiting for the COD fatigue crash to kick in. I think that once the current generation “grows” up they will be into other things.
I’m sorry but something is seriously wrong if you need to sell 5 million copies to break even. And please don’t blame it on single players. I actually think that the multiplayer market is way overstated.
Are they making the mistake of overstating how many games they “think” will sell and applying a budget to that proposed selling point?
Hopefully one day things will turn around and become more of a gamers market. If you think about it, our generation is the one that grew up with games and we now have the buying power. If I look at how many games I bought when I was starting out career wise to what I can get now.
But I don’t know how many games mommies and daddies buy for their little kiddies (age restricted 18 by the way).
Soopa Fly
March 28, 2013 at 02:59
Its sad that a game needs to sell that much just to break even. Not even making a profit……….that is disappointing information indeed.
matthurstrsa
March 28, 2013 at 06:45
I’m disappointed the header isn’t of a pigeon.
But that’s really scary, a game that was universally praised won’t even be considered a success?! The world has gone batshit.
matthurstrsa
March 28, 2013 at 06:50
Also, Billy Pidgeon sounds like an epic character for a cartoon. A gangster pigeon, trying to make his way through the city’s underworld and rise the ranks of the pidgeon triad (you all know it exists).
Snormossel
March 28, 2013 at 08:25
You just blew my mind.
Wyzak
March 28, 2013 at 08:15
If the little studios like Runic Games etc can do it, why can’t the big devs also break away from the publishers and the distribution channels that are choking their profits out of them? TL2 is an absolutely epic game, yet they could afford to sell it for only $20 a pop. They sold just over a million copies last time I heard and that’s enough for them to start working on the next version…
Tbone187
March 28, 2013 at 10:09
Okay, simple math here…dev costs = 100 mill.
$40 dollars a game x 3.5 mill (in the 1st month only mind you) = 140 mill…Obviously , hidden costs (legal fees, etc) would take up a chunk of profit…If marketing isn’t paying for itself then your marketing is shite…
The fact you’re covering dev costs and are in and around targets means it’s viable. If it’s not the product, it’s the pitch. The humble sales pipeline is being undermined with the assumption that it’s easy to sell games (just put it out there and let it sell itself)…Activision are continuously running promos and comps to maintain hype around their titles…
Can’t blame piracy coz well , movies are still profitable and thriving…Sorry but the simple E3 expo isn’t enough any longer and is possibly the equivalent to the Sundance Festival for newcomers…New and innovative sales techniques are required… in my opinion of course…
Aussious
March 28, 2013 at 16:23
My biggest gripe with game publishers is transparency when it comes to actual budgets its always speculation or estimates. Games gross more than movies now things like budgets should be disclosed to the public.