Obsidian's Pillars of Eternity [BETA RELEASED, GO TO THE NEW THREAD]

If Obsidian make 2 million sales of PE, they would be swimming in money and could fund the francise until PE 6

 

Without a publiser even 5-10 $ sales one year later are still very profitable.
The whole AAA idiocy for day one sales is because they have shareholders that are "i want my invested money(with 200% return) now.

 

You have a point. Any publisher who invested 4 mil would probably want at least 10-12 milion return. For that they get their cut from profits and straight money too. This KS business cut the publisher out and if they manage it well they don't have to pay anything to anyone and make a decent profit even if they sold 500k.

If they manage to sell 300-400 k on first day prices(60$) they can make a 16-21 million $ profit. Normally more than half should have gone to publisher but they don't pay anything, they would make the same amount of money as the ones that sold 1 million. (I made that 16-21 estimate from the avarage KS price per person: 56$)

Well as long as they continue making games, this system can work pretty well.

 

This is something I've wondered about. Out of the average game, what percentage of the sales price goes to each company/person. I've seen breakdowns for books that show things like x% is the profit margin of the theater or bookstore, x% is the costs of distribution, x% is marketing, x% is the printing, x% is the costs of editor labor and x% is the writers advance/royalty. Has anyone seen a similar breakdown for video games?

 

Sadly, it's rare to see a budget breakdown for games. We don't even know the actual budget of the most.
But as a general rule of business, investors probably takes half of the profits. Maybe some developers among us can tell you how much of the profits does their company get.

 

So they got 7 bucks from 60? I underestimated those bloodthirsty vampires.


Do they pay for PC licences btw?
Does the engine developers and outsourced licence owners gets a cut too?
How much does steam get for Retailer Margin?

 

Still i don't think any publisher would give more than %50 to a developer so they get 14.5 at most.

 

Infinitron, don't bother with Horus today. He's either trolling, drunk or being exceptionally dense.
Whichever the case, not worth discussing with.

 

The publiser's make 27 from the 60. Devs make 0 unless they have a special deal in their contract with the publiser.
Obsidian for example, they only get a cut for NWN2 copies sold, but i would be surprised if it was more than 2$ per copy.

 

I don't normally follow the financial side of the gaming business nor i am frequent user on this CPRG forum to follow those discussions. So it's an honest question and you don't have to answer if you don't want to.

 

Engines usually are just a fixed fee. InXile is using Unity which costs $1500, and that's it (I think that's just one computer with Unity Pro, so it's $1500 x the number of computers they put it on).

Steam gets 30% of the selling price.

You're asking really basic questions that 5 min in google could answer. It comes across as trolling or extreme laziness.

 

Err yeah, there was this thread about it: http://www.rpgcodex.net/forums/inde...a-60-game-goes-retailer-production-ect.81405/

http://www.eurogamer.net/articles/2011-01-10-where-does-my-money-go-article


The "license holder" in this case would be Microsoft/SONY/Nintendo etc. and not what you'd have to pay for the IP. They're not even guaranteeing a place on their shop or whatnot with that, just generally taking money off the top because the game is coming out on "their platform". There is no such fee for the PC although Microsoft really wants that to happen with say their new AppStore on Windows 8 and take the position of Apple/Steam.

The developers themselves are usually the fucked ones in this relationship. Obsidian for instance didn't particularly "get rich" but mostly worked for +/- 0 and the ability to make games in the first place and get more work so the studio can survive.
Mostly there's only a fix sum for the development of the game made out at the beginning that they get, sometimes there are Bonus payments or percents from the profits, but the publisher usually pcokets most of it or they are hidden behind clauses like "Metacritic rating over 90" or whatnot and the developers have to pay the publisher back for their development costs from their part of the profits e.g. I've written about this a few days ago: http://www.rpgcodex.net/forums/inde...ter-adventure-game.69252/page-24#post-2713185

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No bank would loan that kind of money to a Indie game developer (or even any game developer) without serious collateral.

Publishers won't even stand up in the morning without devouring an IP and sole distribution rights. And you need to pay them back fully.
Publishing deals are an extremely bad deal you will get like 15% of the final sales and will have to even repay them from those earnings: http://www.obscure.co.uk/blog/2007/02/26/the-myth-of-the-developer-royalty/

Often for commissioned work with an IP your studio doesn't own you only get a concrete fee beforehand and there might be some royalty clauses in the contract for sales target reached or "Metacritic score" (see what happened to Obsidian) and you might not get any additional money at all.

What a publisher gets with a retail sale is somewhere around ~30% of the price of the game (and 0% of any additional "used sales", which is why they are so against it, the platform owners e.g. Microsoft/SONY/Nintendo get nothing from them either).
What a publisher (or developer if he self-publishes) on platforms like Steam gets is somewhere closer to ~70% of the price.
What a publisher (or developer) gets if he self-publishes on his own platform e.g. CDProjekt on GoG or MineCraft from their site is usually closer to ~90% (there's always some overhead, taxes and whatnot).

A Digital Sale is usually about twice (even three times if they sell through their own distribution channel) as valuable for a publisher/developer as a retail sale because of the amount of money they get, this is also why they can reduce their prices to ~50-75% Off a few weeks after release, since they'd get the same they would out of a single retail sale and it increases the volume of games sold.

 

Ok, then. The developer usually only gets a fixed amount of money for making the game, depending on the contract. After finishing the game they sometimes get a "completion bonus". Some contracts also have additional clauses, like 'if a game gets 85% or better on metacritic, we will pay you a bonus'.

Sometimes, although very rarely, the developer gets a cut from every copy sold. Larian made deals like this with his publishers and managed to become independent after some time.

Not that none of what I wrote is definitive. This is because every contract is different and there are many other aspects to cover (like IP ownership).

 

Thanks, that was really helpful. Thanks for the links too, it seems i missed those threads.

 

Awesome, thanks Infinitron and Dexter !

 

As far as budgets go, two useful pieces of information I've come across are that game development in the US costs about $100/man-hour (when you consider wages plus overheads like rent and healthcare), and that Baldur's Gate II took about 90,000 man-hours. Conclusion being that it'd cost ~10 million in today's dollars to produce another BG2, though that's probably an upper bound considering that 1999 Bioware were recording bugs on whiteboards in their hallway.

 

x9999. There also was something he said earlier about "wondering about creating a John Romero on KS"?

 

What percentage do digital distribution platforms like Steam and GOG take on average? 15%? 20%?

Anyway, Obsidian should count themselves lucky if their game sells more than 100k copies at full release price. Unless they get lucky and a large word-of-mouth 'marketing campaign' starts before its release, they're probably going to have to return to Kickstarter if they want a bigger budget for their next game.

EDIT: ah, ok I didn't read dexter's post. So digital distribution platforms gobble up about 30% of the profit from a sale. That's quite a lot, but it's still better than the alternative.

 

Do you see more than 100k people buying it at $40? I sure don't. Especially considering that more than 70k of the people who are interested in the game already preordered it through KS.

 

Ok, yes I know about Grimrock, but that game not only sold at $15 initially, but if I remember right it was also present in some massive sales, where it was bundled with other games for very very low prices. Plus it was first person and it looked good, so the average joe blow who knows nothing of the genre maybe thought it was like Skyrim or something.