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SireChaos -> RE: Business Model (7/24/2010 9:03:17 PM)
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quote:
ORIGINAL: Scott_WAR
quote:
ORIGINAL: SireChaos
That doesnīt people here wouldnīt be happy if the games cost half as much, but most of us understand that wargame producers donīt operate in Magic Fairy Land where everything comes for free.
Then why does almost every single other game that comes out cost around $50? Your argument doesnt make any sense at all. I guess in the magic fairy land this developer operates in everything costs twice as much than in the magic fairy land every developer works in.
Most of us realize this developer is being greedy, and he has lost quite a few sales becasue of it. So, he has hurt himself with his greed,...and the attitude he has about it. Having someone like you, throwing out stupid excuses isnt helping him either.
Thatīs very simple.
Making a game costs money - developers, publishers, programmers etc etc all have bills to pay, and thus donīt do their work for free.
Hence, if you need someoneīs work in order to make a game, and this someone does not work for free, you need to pay him.
Thus, if you have to pay someone - especially quite a few someones - to make a game, there are certain costs, so-called "fixed costs", because they are fixed per product (say, one batch of fixed costs for WitP, one batch for Uncommon Valour, one batch for War Between the States, and so on), not per unit (i.e. per each copy of WitP sold). Add advertising to this, plus fixed costs on the company levels (Matrix Games pays rent for their offices, for their warehouses, salaries for their staff etc etc).
There are also variable costs, that is, costs per each unit sold - like the production cost of the actual physical product, plus shipping, or the costs of hosting and bandwidth for download product.
So, in order to try and break even on their product, the company needs to "charge" each copy sold with a portion of the fixed cost, which means they need to estimate how many units theyīre going to sell.
However, hardcore wargames like WitP donīt sell as many units as more mainstream games, so each copy expected to be sold gets a much bigger portion of the fixed cost.
Of course, the company also would like to make a profit, much like companies producing mainstream games. So the price of a copy of a computer game (actually, the price of pretty much *anything*) is fixed cost plus variable cost plus profit.
Letīs make this clear with a simple example, the number for which Iīve pulled out of my ass, solely for the purpose of illustrating what I said above.
Letīs say a hardcore wargame - call it "Conflict in the Pacific" - costs $200,000 to produce, and $10 per copy sold, and the publisher and developer, between them, expect $10 of profits per copy sold.
Letīs then say a mainstream game - call it "Quarter Life 3" - costs $500,000 to produce, and $9 per copy sold (a little less than CitP, because unlike CitP, it doesnīt come with a fat manual), and the publisher and developer, between them, also expect $20 of profits per copy sold.
However, Conflict in the Pacific is expected to 5,000 copies, because itīs a niche product which appeals only to grognards, of which there arenīt that many. Quarter Life 3, on the other hand, appeals to a lot of gamers and is expected to sell 500,000 copies.
So, each copy of Conflict in the Pacific is going to cost $60 ($200,000/5,000 + $10 + $10) - and would have to cost $50 even if nobody expected to make any money off it. Whereas Quarter Life 3 is going to cost $30 ($500,000/500,000 + $9 + $20). And no amount of whining and demanding is going to make CitP sell for $30, because the developers and publishers arenīt going produce something that costs them $20 in losses per copy sold.
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