Only 4% of Games are Profitable

[CaptainKirk]

Researcher Geoffrey Zatkin has told Forbes magazine that only 4% of all games released today return profits to their developers. Zatkin runs a research institute that tries to determine the profitability of adding certain features to video games. Here's a snip from the original article:

Speaking to Forbes, Zatkin showed that there is truth in numbers. In fact, numbers are EEDAR's specialty. The firm maintains a database of over 6,000 games catalogued by genre, features and sales figures.

That data is used to create models that estimate how well a game will sell based on the way the game is pitched. EEDAR's sells its services to publishers including Electronic Arts, Activision, and Ubisoft.

Zatkin, a former game designer, co-founded EEDAR after experiencing first-hand the stress of making major decisions early in the game design process. "Every game I have ever worked on, we've gone in blind as to which features would sell the game better," he said.

Source

[{HHx}b14ze]

Re: Only 4% of Games are Profitable

What are the features that make a game sell more copies? I hope nudity is on the list....a few boobs in 2142 would of been great!

[CaptainKirk]

Re: Only 4% of Games are Profitable

What are the features that make a game sell more copies? I hope nudity is on the list....a few boobs in 2142 would of been great!

I think he was talking more along the lines of assessing the value of adding a multiplayer component to a game-- things like that :)

[Obsidian Spire]

Re: Only 4% of Games are Profitable

They only use 6000 games as a standard for an industry with at least 15000 games? That leaves a huge margin of error. I doubt they take into account the company that makes the game, reviews, consumer feedback, and the actual quality of the game. Some people will buy a game because a company that they have heard of made games they previously enjoyed. Now, they want to try their newest game. I want more information about this database because for now, it sounds very basic and only pertinent and relative to a small minority of games.

[CptainCrunch]

Re: Only 4% of Games are Profitable

What are the features that make a game sell more copies? I hope nudity is on the list....a few boobs in 2142 would of been great!

Believe me, there were/are a LOT of boobs in 2142. I have some of their tags.

Crunch

[Shawn Zipay]

Re: Only 4% of Games are Profitable

Seems the 4% figure was a misquote-
http://www.computerandvideogames.com....php?id=202401

EEDAR spokesperson confirms to Edge that the "4% of all games make a profit" claim is a mis-quote. Figure is actually 20%.

Following Edge's previous story on Geoffrey Zatkin's reported claims that only 4% of videogames make a profit, Edge had contacted analyst group Electronic Entertainment Design and Research for more information on the claims. It has now emerged that Forbes' report on the figure is, in fact, not true at all.

"This was just a big mistake," says a company spokesperson at EEDAR. "What Geoffrey said was that only 20% of games that start production will end up with a finished product. And of that percentage of finished games, 20% will make a profit."

This means that 4% of all games which start production will eventually make a profit, but a far-more-likely 20% of finished products will see profitable returns.

The EEDAR spokesperson maintains that all the other statistics on the Forbes report are correct. The Forbes story which Edge cited is expected to make a correction soon.

[Obsidian Spire]

Re: Only 4% of Games are Profitable

That leaves a huge margin of error.

I knew it!

[Vreki]

Re: Only 4% of Games are Profitable

That still begs the question: If that figure is true, how does game developers stay alive?

Those 1 in 5 that are profitable must be so with huge margins, otherwise we wouldn't see so many releases.

Another thing they seemed to have missed completely is that if you have an algorithm that decides gametype, features, release dates etc. and everybody uses it, then there will be a lot of almost identical games released at the same time, thus decreasing the chances of success.
Or did I miss the part where he mentioned quality and innovation as parameters?

I think we have seen a growing tendency for developers / publisher panicking and releasing unfinished games, thus killing them.
Just look at FFoW. Most agree that it would be a great game, if just they had taken the time to make it actually work

Or right now I am watching GOA killing the European part of Warhammer Online with abysmal customer service and empty servers. Mythic has a large part of the blame too, since they seems to think they have some months after release to make their game fun.

The ability to patch games after release has made many publisher kill the goose that would have laid golden eggs. They don't realize that today gamers wont touch a game that gets a bad reputation at release. So they release what really should have been left in beta to make some quick cash, probably based on stuff like "end of fiscal year" and "stock prices".


Hmm, maybe I should have used these: :ranton: :rantoff:

[Skaggy]

Re: Only 4% of Games are Profitable

When you pay your £40/$60 for a game you're most likely paying for the development of other games that failed.

It happens in the pharmaceutical industry. Drug companies can spend millions developing a new medicine, only to find it causes some dangerous side effects in testing, so they can't put it on the market. As a result they ramp up the price of the pharmaceuticals that do work.

It wouldn't surprise me if it was the same for games.