Doubts!? Will they release a new Silent Hunter?!

[mookiemookie]

Originally Posted by CCIP

So the short answer is probably $2-3 million even with modest effort.

That sounds low. According to Ubi:

Leading on from this, an Ubisoft executive gave a breakdown of the company's average development costs per game - with a DS title costing between 500,000 to 1,000,000 euros ($785,000-$1.57m), PS3/Xbox 360/PC titles averaging 12 million to 18 million euros ($18.8m-$28.2m) to create for all 3 SKUs, and a Wii game expected to cost 5 million to 6 million euros ($7.8-$9m) to develop.

http://www.gamasutra.com/php-bin/new...hp?story=18389

Let's say your PC exclusive subsim costs as much as a Wii title to create. You're talking $8 to 9 million before you ever see a dime of profit. Even if you wanted to lowball it and say it was only half as expensive, you're still talking $4 to $4.5 million.

And the $50 earned per unit number isn't realistic. In a traditional brick and mortar distribution system, the publishers gross margin is 30%, and even in a digital distro system like Steam, you're earning 70%.

So doing some quick back of the envelope calculations:

If your list price on your game is:
$50 for the first 6 months and you earn 70% of your sales in this time frame
$30 for another 12 months after that and you earn another 20% in this time frame
$20 for another 12 months after that and you earn 10% during this time

Then the weighted average price of the game is $43. (Note: I completely spitballed these figures. I have no idea what the sales life cycle of a game is.)

Let's say for simplicity's sake, you only do digital distribution. You earn 70% of your $43 average sales price over the life of the game. You're only taking in roughly $30 per unit sold.

How many units sold at $30 do you need to break even with say a $4,000,000 development cost? 133,333. That's breaking even. No profit. And assuming all digital distribution and the higher gross margin that comes with it.

Using sales figures estimated by Neal here, it seems like you can probably expect to sell 100,000 to 200,000 copies of a subsim worldwide. Your max income is gonna be $6,000,000 in the best case scenario (70% gross margin, 200,000 copies sold). Meaning that you have to keep the costs under $6,000,000 or you don't make anything on the project.

Less than $6,000,000 and you have people around here that want every bit of the world modelled in a subsim. Right down to every piece of seagull crap on the conning tower. It's not gonna happen. As we saw above, costs aren't going to be that low and you're not going to sell 200,000 using only digital distribution.

The numbers just don't add up in a profitability sense.