User information for Garrett Marrison

Real Name
Garrett Marrison
Nickname
Matrinix
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Concealed by request
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Signed On
August 19, 2003
Total Posts
2 (Suspect)
User ID
18087
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2 Comments. 1 pages. Viewing page 1.
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82.
 
Re: Valve going bankrupt
Oct 12, 2003, 13:31
82.
Re: Valve going bankrupt Oct 12, 2003, 13:31
Oct 12, 2003, 13:31
 
Valve might actually be out of money, sure it’s unlikely, but follow the math below.

I've been thinking about trainwreck of a game called Condition Zero. After doing a little math, I've concluded that Condition Zero is just being released to make Valve some more money, not because it's done, just because Valve has to be running short by now. How you ask? Valve made a lot of money off of Half-life right? Sure they did, but look at how much money they had to spend in the past 5 years. Follow my math:

First, all these numbers are available from various sites and articles, so the information is pretty easy to locate.

The entire half-life game franchise has sold about 8 million copies, including Gunman, Opposing Force, Blue Shift, Half-life platinum, half-life TFC, half-life game of the year edition, counterstrike, day of defeat, and PS2 half-life. (info available at http://www.sierra.com/product.do?gamePlatformId=470)

Let’s say they sold about 2 million copies at full price:
An average of $45.00 a box sold in retail, which breaks down to about $25.00 of profit to the publisher, which then is split up to the developer. Let’s say Valve was smart and got a %20 royalty on their game, which would give Valve about $5.00 in profit per box.

$2,000,000 * $5.00 = $10,000,000 profit on full price sales

After a while, the price drops on games, therefore the publishers make less money off of sales as games approach the bargin bins. So let’s say the next 2 million copies sold for $4 profit per box, the next 2 million for $3 profit per box, and the last 2 million for $2 per box.

The total amount of money valve could have possibly made from half-life sales are as follows.

$2,000,000 * $5.00 = $10,000,000
$2,000,000 * $4.00 = $8,000,000
$2,000,000 * $3.00 = $6,000,000
$2,000,000 * $2.00 = $4,000,000
Totals = $28,000,000 profit to Valve.

Subtract development costs (which developers have to recoup to the publisher and themselves) I'm assuming Half-life cost about $4,000,000 to make. Let's assume Opposing force, Blue Shift, TFC, Counterstrike, Day of Defeat, and PS2 half-life each cost $1,000,000 to make. That adds up to about $10,000,000 in development costs for all those games.

After all that money has been spent, Valve is left with somewhere around $18,000,000 profit from Half-life.

Now, half-life came out 5 years ago, and Valve has been working nonstop since. Every employee there has been drawing a salary, slowly chewing away money. I read that Valve has something like 80 employees, all in Seattle (which is a pricy place to live), so lets assume the AVERAGE salary at valve is $75,000 a year - Add in employment insurance at %20, and $50,000 a month for other expenses (rent, equipment, etc) then Valve ends up with a monthly burn rate somewhere around $330,000 a month.

Now comes the fun part, multiply that out over 5 years, $330,000 a month for 5 years is just about 20 million dollars in spending.

According to the half-life profit above, which was left at about 18 million after all was said and done, it looks like Valve could down almost $2,000,000 in their cashflow. I'm sure that is not the real case, since Valve has most likely suckered people like ATI, Activision, Nvidia, Microsoft, Sierra, id, Ritual, Rogue, Gearbox out of lots of money, they probably have money in the bank - but even with these approximate numbers, they have to be getting close to running out of cash.

Either way, we lose in the end. Valve runs low on money, and we get a shovelware game. Just look at that Day of Defeat retail box they put out this year, wtf was that about? I sure hope the finish Half-Life2 before the money really does run out, not like it matters, they can just leak the source code again, maybe sue some people and get their money reserves back up.


9.
 
Re: No subject
Aug 18, 2003, 23:50
9.
Re: No subject Aug 18, 2003, 23:50
Aug 18, 2003, 23:50
 
Hey Dr. Evil - Why don't you get off your fucking fat ass and do better? If your pathetic skills at being a critic translate at all to making games, I highly doubt your games will be any better received.

Looking at your post history it is quite evident that your ability to criticize other people's work is the only talent you possess.

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