RCBH928 wrote:I feel sorry for game developers after reading this article that breaks down the price of a video game console, it states developers profit $1 on each game sold. The numbers seem a bit off, but if its true that console manufacturer fee is $7 per game, then Nintendo pockets must have exploded in the Wii era. I wonder how many total games sold for Wii, not how many released.
I think you're reading that a little wrong. Rearranging it a little, what I would assume...
ON A $60 GAME OF GEARS:
Developer:
* 25% (aka $15) goes to pay the art and design guys.
* 20% ($12) goes to pay the programmers and the engineers.
* 0.05% (less than 3 cents) go into the cost of paying for the Developer's Hardware. Who knew an SDKs can cost tens of thousands of dollars?
Publisher:
* 1.5% (just $1) goes into the publisher's pocket.
* 0.3% (about 20 cents) goes into corporate costs. Management, overhead, lawyers, etc.
Physical Production (no longer a given)
* 1.5% (also $1) goes into the distributor's pocket.
* 5% ($3) goes to actually manufacturing and packaging the disc.
Retailer
* 20% (also $12) goes to your friendly neighborhood retailer. EB / GameStop, whoever.
Platform Holder (I'd assume this is the same as retailer if digital now)
* 11.5% ($7) goes to a "Console Owner Fee" - ie. whichever one of the Big Boys made your hardware (Sony, MS, Nintendo.)
Advertising (will vary, smaller games may have little or none)
* 7% ($4) goes to marketing, and puts Mad World and Marcus Fenix on MTV.
* 5% ($3) goes to "market development" -- paying for cardboard Standees of the Gears Crew and elbowing other games out of the way for shelf space at your local retailer.
Misc (probably applies a lot for engines/etc)
* 5% ($3) is spent paying the Man for IP licenses or maybe hiring some big name voice actors. If your game isn't an original IP, here's where you get dinged by Marvel, Disney, or Ray Liotta's agent.
So, going by that (which is likely dated and/or only particularly applicable to the big AAA titles), the actual developer would be getting about $27 of the $60 a new game costs. The surprising "only gets $1" thing is the publisher, though that probably depends a lot on the specific setup. Plenty of the bigger games are made by studios that are subsidiaries of the publisher, for instance. In turn, digital sales mean that many games don't need a publisher per se, but are instead still paying a cut to the storefront and platform holder.
Regardless, the actual developer is getting a pretty fair cut.