The Words of the Winds are Now all Clear

[rob_0926]

You just forgot the development, that account for a big chunck of the cost.
Other than that, you're right

No I didn't! I clearly stated variable costs in selling each additional copy. Development costs are fixed costs, and once the game is developed you do not have to pay additional development costs for every single copy that is sold (think of it as a sunk cost).

e.g. it may take PD 5 years and $100 mln to develop GT5, but after that to sell copies of it (at $59) they only incur a couple of dollars of variable expenses (BR-D, packaging, shipping) to sell each incremental copy (lets say $4 for example), which would result in $55 going straight to the bottom line for each copy sold; which is pure profit once they get past the break-even point, and pay taxes.

 

[Gulf]

e.g. it may take PD 5 years and $100 mln to develop GT5, but after that to sell copies of it (at $59) they only incur a couple of dollars of variable expenses (BR-D, packaging, shipping) to sell each incremental copy (lets say $4 for example), which would result in $55 going straight to the bottom line for each copy sold; which is pure profit once they get past the break-even point, and pay taxes.

Im not so sure that the margins are that high. there are many cost not included in the analysis. Anyway i have no real info about that.
But if you really try to think about the break even point for GT5 for example, doind fast calculation. you have to pay just for development, say, 100k a year per employee for 5 years of development, thats 50 million dollars, at 70 dollars (average worldwide price of gt5) you have to sell somthing like 720 thousand copies. and that's not counting any other cost. when you start adding other variable cost as marketing, pr, travels, licensing, etc etc, the break even point would be around 900k +/- copies. then you would start making some money out of the game.
anyway, all of that is just hypothesis.
with a target of 2 million copies they are going to have big profits anyway

 

[rob_0926]

I wasn't even trying to come up with numbers that would resemble what happens in the real world, but rather was speaking hypothetically.

My point was that if Sony sells an additional PS3 (even at a loss) then it will make up for that loss by selling software. If you download something from PSN, it is 99.9% profit that is split between Sony, the game developer, etc. If they sell a physical copy of a game then it will probable closer to 90% going into somebody's bottom line. Once again advertising, such as development is a fixed cost and doesn't increase with each additional copy sold (unless it does such as if you bought it by clicking on a google ad or so). This is a basic principle of cost accounting, and I apologize if I am not explaining it correctly but it makes sense in my mind.

I think that they will sell a lot more than 2 million copies, since they sold like 7 million copies of GT3 in the US alone, and close to 3 million copies of GT4 in the US (and a lot more in Europe).

 

[BobGreen]

Having been to an open day at a games studio recently, I can tell you that for every $30 game that is sold, $3 goes back to the development company. A large chunk of the money goes to the publishing firm, (maybe in this case PD publish their own titles, I'm not sure). And the $4 you allowed for for shipping and packaging is far too low! For a $60 game, PD will receive $6 unless they publish it themselves. When talking about digital games however (downloadable ones), the only cost incurred aside from development are bandwith costs which they have to pay to PSN or XboxLive etc. In this case, the dev company will receive roughly $25 for every $30 game downloaded!

 

[boiltheocean]

Surely how much money the developer gets is completely variable depending on what is agreed between developer and publisher (PD and Sony).

 

[deep_sky]

The talk about money split is pretty irrelevant given that PD is owned by Sony...they're both on the same side. Sony know GT is an important franchise; both in software and selling hardware...the important thing is that Sony keeps funding PD and GT.

PD are not developing GT5 on the money they've made in the past; they're getting the money directly from Sony...and it doesn't matter how successful GT5 is, PD will probably never see any of that money because it is Sony who are funding their continued existence.

 

[torontoml]

Looks like the smaller version Amar is referring to is the GT: Mobile as it has been semi announced early in the June episode of Qore available to the subscribers with their coverage of the PSP Go.

The PSP Go is planned to launch in the Fall of this year, and from the episode I get the impression GT will probably release along side it.

 

[MGR]

http://www.youtube.com/watch?v=pQ-EtvIhFRU
Section of Qore video interview confirming GT Mobile (cruddy quality) .

OT, we're also getting a slim PS3.

 

[amar212]

Sixth wind has been unveiled, other 5 are still waiting.

Feast is starting

 

[DJMaky]

Revealing everything in the next GP?

 

[Kingdizzi]

YAY so GT Portable revealed and the rest will I assume have to do with the PS3 game . GT Portable could have been shown in Qore though.

 

[rookiebalboa]

can i just ask why the title have been changed?
have I missed something, perhaps some new info?

 

[MGR]

can i just ask why the title have been changed?
have I missed something, perhaps some new info?

Look up.

 

[torontoml]

can i just ask why the title have been changed?
have I missed something, perhaps some new info?

Look about 6 posts up at my post Amar confirms it a couple posts later.

 

[FLASH48]

can i just ask why the title have been changed?
have I missed something, perhaps some new info?

Because E3 is in just few days, and all amar212 has said will be revealed!!

 

[Fruitcake]

First post updated

GT will be all over this weekend

 

[Timppaq]

Gran Turismo for the new PSP Go will become Gran Turismo Mobile

Nice!!

 

[MGR]

Here's the full video (once again cruddy quality)
http://www.youtube.com/watch?v=rM3dMMc3syY

Right at the end he says that Gran Turismo is on the device she's holding but they don't show any gameplay footage. But hopefully that confirms GT Mobile in a playable form at E3.

 

[sher_da_putt]

WOW. New GT, and PSP.... GT5 should definitely be at e3.

 

[Worst_Driver]

Amar you're the man
thanks for the news
1 done 5 to go

 

[RacingFreak2k3]

I'm starting to get excited!!!

 

[Fruitcake]

WOW. New GT, and PSP.... GT5 should definitely be at e3.

Off course it will be there

 

[FLASH48]

All i want is for the First Wind to whisper(or should i say SCREAM) fall 2009!!

 

[aurelio_911]

can't wait for E3!! Just 3 little nights...

 

[EERS4YEARS]

The guy in that Qore youtube video seemed like he wanted the chick to ask more questions about Gran Turismo. He mentions it twice, and both times it seemed unwarranted... he wanted to spill some beans. Come on Amar, I know you know everything that guy does and probably more. Anxiety attacks are setting in across the GTPlanet community.

Looks like PSP is all Ill be getting for Xmas this year ... anyone know how much it cost?

Edit:
noticed Amar212 is viewing this thread... i bet he is rolling around laughing.

 

[Christhedude]

I'm going to make a statement that hopefully will be remembered once GT5 is out this Christmas.

I believe that PD is giving us a GT5 that we never even thought of that we would get.
I think that in those 4 years of intensive development PD has created a massive singleplayer gameplay with features that we might not even be thinking about.

I'm so confident that GT5 will be way beyond our imaginations. I believe it is going to be a perfect game.

Looking forward to the release

Chris

 

[PSNkilluminati]

does this reduce or add to the chances of gt5 this year?

 

[sher_da_putt]

does this reduce or add to the chances of gt5 this year?

Hopefully add, Kaz said that he wanted GT mobile to release alongside the next gen GT5 In some article, but it was an old one.

 

[Tired Tyres]

All you need to do is check the first post on the first page. Amar updates that for those that can be bothered to check it.

 

[SUPER NUMBBER]

This thread blows.