Ex-Sony Exec Says 70% of Games Lose Money

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I knew that some games sere money losers but I had no idea it was as bad as this. That is insane to think that 70% of games are money pits. I thought it would be the opposite with maybe 30% losing money. Wow.

Only three in ten games make enough money to recover development costs, former Sony executive Chris Deering stated in a Edinburgh Interactive Festival keynote.
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Maybe they should stop putting out crap games?
 
Maybe if Sony would stop fucking up sucessful games and chasing away their players (SWG anyone?) they wouldn't be operating at a loss.
 
Yeah, really.. If they got rid of the garbage games, that stat would go from 70% losing money to 1%.

Of course, I could root around my ass and pull out numbers also, like they are most likely doing.. We all know the next thing coming from this set of numbers is "it's all those dang pirates!!". We know they will never admit that any of their games just plain suck.
 
When you consider that only 10% (approximately) of games are even decent and of those only a very small percentage are stellar genre defying games it's no surprise that 70% lose money... 'cause they're absolute crap! You reap what you sow.
 
Monkey God said:
NO ITS PIRACY
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a little less than 15-20% of consoles have piracy

and sony MUST be talking about themselves because they are the only people that i see pour ~50million dollars per game just to get it to sell a million
 
Maybe they should snort less cocaine, and create games without bugs in them *cough ea cough*...
 
Also, i'm not surprised considering how expensive it is to make a game these days.
 
I agree that it's the crap games that game developers are putting out these days. It seems that there are so many games that add nothing to the genre. FPS games are a dime a dozen for example with no real gameplay value added. It may just be me but it seemed like in the 16-bit days of the Genesis and Super Nintendo there was actually quite a lot of unique type games that we just aren't seeing these days.
One game in particular that deserves a true sequel on the next generation systems (insead of another MMO) is Phantasy Star. If Sega would just put some effort into development in an offline PS game and make it fun to play, I really think that this would draw in quite a bit of money.
There are other numerous 16-bit games that probably deserve to see the light of day on these next-gen consoles but it seems that developers are putting forth this Hollywood-type approach to game development. If the game is too fanciful it seems to have less of a chance of making it to market. Only the tried and true game fanchises seem to be the order of that day unfortunately.
I think there's a lesson to be learned here from the other industries. If you fail to innovate, the customers won't buy the same crap you continue to peddle (RIAA/MPAA). Sony can't blame piracy for the failure of their PS3 games since the console is nearly immune to this sort of thing. If someone were to ever make a mod chip for the system, Sony could cause the console to stop working when it connects online so at least they can't blame poor sales on piracy.
 
I agreed piss poor game and bad gameplay makes no money, but another issue is console life, the PS3 is starting to follow the PS2 life, dead lasers issues out of warranty then $ony wants $150 to replace it with a refurb, extend the warranty on the consoles and you will keep gamers, more and more people are leaving X360 for PS3 tdue to the X360 failure rate, but now we are seeing more and more PS3 failures and $ony likes to delte post on there official forums for people ranting and raving about dead consoles after firmware updates, they force these update on you and occasionally it kills the console then they expect $150 to repair it because you went one day past your warranty or misplaced your recipt.
 
Who didn't know this was happening? Welcome to what the movie industry experiences all the time. If you make quality products, people will want it; if you make poor quality products, people will stay away from it (can we start labeling certain games as "B Games" a la "B Movies"?).

The companies that develop games need to realize that any entertainment industry is majorly driven by creativity. If they make a game that is creative and unique, it has the potential of making a ton of cash (just like a movie or a song), but it does not guarantee that end (there are plenty of games that were amazing and did not sell well).

What it all comes down to is this: is the game fun to play? Producers need to keep asking themselves this question at all stages of the game development life cycle. If at any point the answer is no, it's either scrap it or start making some changes. Not to sound like a fanboy - but I think all development companies should take a look at the way Blizzard makes games: nearly every game they make sells ridiculously well, and if they think it's not going to they dump it (Ghost, Warcraft Adventures).
 
They just make wayyy to many games.

I haven't even finished HL2:Episode 2 yet. I got bored. Given I don't normally play single player games anyway, but HL2(the original) was my favorite game ever(now portal is).
My point is this: The gameplay gets repetitive.

There are almost no original games being released anymore. 70% or so are "This Game 2" or "This Game 3". The rest are the same damn FPS or sports game with a different title.

Console game makers are so damn funny. They think they can just put a number after the same game and release it again. Sure they do this with PC games some too, but a boatload of people still play CS 1.6.
 
It might be 70% for Sony, but with the way Nintendo Wii is taking off I'm sure they will see a better %. I really think poor games sales might have to do with a lack of marketing and the target audiences that these games are being developed for. Perhaps if developers put more time in research instead of spawning out utter crap as fast as they can, they might make a game that's worth buying..
 
70% of Sony games perhaps.......i mean the only one ive played and liked was Everquest, when EQ2 came out i started playing that as a druid, but due to a agro bug nobody would group with a druid around level 25+, after constantly informing Sony of the bug and them doing nothing about it i left.......5 months later they fix the bug and some of the end raid mobs are almost impossible to kill because they rely on a druid buffs and the druid population is almost none serverwide. So congratz to them, i never bother buying any of there crap again.
 
digital distribution could help out a lot with the B quality games as they could charge less to purchase and its easier to make that impulse buy sitting at home, feeling slightly bored with whatever game I've been playing and happen to see "The Adventures of Pussolya" available for $15-$25 vs getting up going to the store for something and realizing in a few minutes of looking around that all this stuff is $40-$50 crap in a box.
 
I don't know anyone with a Blu Ray burner and have not heard of anyone copying BluRays so there must be other reasons.

1. Lots of people use the PS3 as a BluRay player first and a game console a far second.
2. Even with a 50.00/year cost people prefer playing games over Live and therefore are buying the 360 version over the PS3 one.
3. The games are crappy and overhyped like Lair for instance.
3. Not Sony's fault but I would bet the ease of pirating 360 games is causing some people that own both systems to only buy PS3 titles if they are exclusive. Anyone with even a little know how can take the dvd drive out of a 360 and flash it to play backups in a half hour or less. I bet 360 loses a ton to piracy. Before anyone says anything I own more paid for 360 Wii and PS3 games then 90% of people out there.
 
I think the percentages will vary from company to company. If 70% is the average of the industry, then people like Sony and EA will probably be much higher than average, while companies like Blizzard and Valve will be closer to 0% of their games losing money.

I think there might be a connection, but that might just be me.;)
 
If the x360 and the PS3 cost more to make than they sold em for (when they first came out on the market) and 70% of games loose money....

Why in the hell does anyone actually make videogames? Seems like no matter what you do, you loose money.
 
well speaking of graphics. ps3 failed to meet expectations. everyone i know that has a ps3 tries to convince me its the best graphics ever (cod4 looks nice) but most of the game are subpar compared to the screenshots and e3 videos from 3 years ago about how great their game will be on ps3. now killzone 2 developers are saying "we hope to make our game look 75% as good as our demo video"... um wtf?

now ffXIII will be released... the game will look nice, have nice cgi... but the quality of the actual gameplay will be subpar compared to any video we will ever see. thats poor marketing, not the market.
 
Jester1550 said:
If the x360 and the PS3 cost more to make than they sold em for (when they first came out on the market) and 70% of games loose money....

Why in the hell does anyone actually make videogames? Seems like no matter what you do, you loose money.
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Because the companies that do make games right make a boatload of $$. This is enough to lure most developers.

Look at Valve, Blizzard, and Nintendo. They make some of the most successful games ever. Why? They think outside the box. Valve makes money through Steam while they are hard at work with a new game. Blizzard has paid off the development costs of WoW (and other games as well) several times over with subscription fees. Nintendo is tapping a larger market by making a console and games for the masses, and not just the hardcore.
 
Pulled a little info off Metacritic:

Game reviews that are favorable (75 score or better)
PS2 - 528/1562 - 33.8%
PS3 - 85/190 - 44.7%
XBox - 339/856 - 39.6%
Xbox 360 - 170/433 - 39.2%
PC - 747/1823 - 40.9%

But just getting favorable average reviews does not mean the game will sell enough to make money. So here's some data about the games that should make a profit; the likes of GTA, Sims, HL series and so on.

Game reviews that score 90 or better
PS2 - 63 - 4.0%
PS3 - 5 - 2.6%
Xbox - 32 - 3.7%
Xbox 360 - 14 - 3.2%
PC - 79 - 4.3%

While metacritic's scoring is based on published reviews that may be bias, they do have enough sources that these tend to balance out. So while any game is up to a person's own opinion on quality, looking through their list I do feel it's rather fair with the scoring.

Here is what Sony should take from this info... Irregardless of platform, 60% of the games put out suck, plain and simple. Of the 40% that are left, only really 4% of those games will make you money, the rest are hit or miss. All the money wasted on DRM, piracy, and lobbying the government would be much better spent on developers investing in quality control and hiring skilled workers. Oh and it might not hurt to release the game when it's finished rather than rushing it out the door just to meet a dead line (EA).
 
From Namco in the first year of the PS3, the numbers were 500 000 sales to make profit on an average PS3 game.

I agree with the target render issues people have, remember Motorstorm? It looked simply amazing, but where was the HUD? Oh it was nothing but CG.
Guess what they've been up to with Motorstorm 2? Go to a game forum with a MS2 thread, read its older post, no doubt you're going to see people gawking at its great graphics - last week actual game screenshots were released and it's naturally a huge disappointment.


I still play Excite Truck on the Wii, it was advertised as a GC-visual quality fun racer, it had no CG videos, the demos were "this is how you do stunts for more points, this is how you race" instead of "we spent $30 million developing the graphics routines, check it out". I think N's way of working sort of helps. The customers want games.
 
Sadly, this is not a new issue. Here is a great editorial on the issue from a few years back in The Escapist: http://www.escapistmagazine.com/articles/view/issues/issue_8/50-Death-to-the-Games-Industry-Part-I

Basically, since processing power increases with Moore's Law, gaming costs also go up because of the increased capacity demanded. For this reason, publishers are also wanting to make titles that are going to be a sure hit and we end up with the majority of titles being sequels.

IMO, the best thing that has happened to the game industry this generation has been the Wii. Because of it's lower processing abilities, games have had to fight more not on graphics but game play and creating games are much cheaper than for the 360 or the PS3.
 
Not exactly shocking. How many new businesses fail? Hundreds are started every day, and only a small percentage end up making money.

Games are the same way...a developer or the industry as a whole throw 100 against the wall to see what's successful, and most don't stick. If a dev knew exactly how many games would be sold, or what franchises would be a success, don't you think they'd only make those? Think a game like katamari damacy was a sure thing? Think that squeenix *knew* that ff7 would be their most successful and critically acclaimed? Think epic thought ut3 would do better than it did? Just a few examples of why there are no sure things.
 
CyborgTMT said:
Here is what Sony should take from this info... Irregardless of platform, 60% of the games put out suck, plain and simple. Of the 40% that are left, only really 4% of those games will make you money, the rest are hit or miss. All the money wasted on DRM, piracy, and lobbying the government would be much better spent on developers investing in quality control and hiring skilled workers. Oh and it might not hurt to release the game when it's finished rather than rushing it out the door just to meet a dead line (EA).
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Definitely QFT. I think keeping costs down is important. Having to pay royalties doesn't help much either, IMHO.
 
Another vote for: "By sheer coincidence, 70% of games are also crap".

Actually, probably more.

The big problem that I have noticed with the big publishers, is that they don't view games as games, like we do, they view them as units.

There is no such thing as a good or a bad game to these people, no "why", only units, much like a store might view any homogenous commodity as simply a unit, there is no good chicken or bad chicken, the only quality marker is how big the chicken is, the taste of the chicken is immaterial.

If the chicken tasted better, it would probably sell more, but tasteless chicken is cheaper to make, so it has better margins.

In my view, games companies have gone too far down the battery chicken road, focusing to much on quantity over quality and it's biting them in the ass, make fewer, better games.

Now I want some Chicken.

Mmmm...chicken.
 
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