On Friday, November 21th, Forbes.com did an article on Electronic Entertainment Design and Research. The article is located here http://www.forbes.com/ebusiness/2008/11/21/games-eedar-developers-tech-ebiz-cx_mji_1121eedar.html. Unfortunately, there was a miss-quote in the article that a lot of sites noticed and reported on. Below is the line from the article.
“Only 4% of games that make it to market actually make a profit, he says. About 60% of a game's budget is spent reworking or redesigning a game. Armed with all this data, companies can make those tough calls early in the development process.”
The actual statistic is only 4% of games that enter production will return a significant profit. Of games that are released to the market, only 20% will produce a significant profit. (Source for the second sentence: Secrets of the Game Business by Francois Dominic Laramee).
We understand that miss-communications can happen, especially during phone interviews, but given the inaccuracy of the statistic and how many other sites have picked up on the story, we wanted to ensure that the major media outlets received the correct statistics on the subject.
Geoffrey Zatkin, EEDAR’s President and COO, has provided some clarity on the subject:
“Only 20% of games that begin production will ever finish. Of those 20% that are finished and released to the market, only 20% of them will ever realize a significant profit (Source: Secrets of the Game Business Francois Dominic Laramee).That equals 4% of games that start production return a significant profit.
During the concept and design process of a game, publishers and developers often analyze every feature in a game to ensure proper implementation for a successful release. At EEDAR, we believe that enough historical information is now available to aid publishers and developers during the concept and design process of a game. The EEDAR database, which now consists of over 6 million historical data points, can help remove the burden for publishers and developers from having to justify every feature in their title. Specifically, our DesignMetrics™ reports help publishers and developers by identifying early in the development cycle the correct feature combinations most likely to meet consumer expectations. This allows developers to focus more time and resources on creating a high quality and well polished video game.”
He knows the industry and he takes time to explain things. Yes, he is a complete dick when it comes to his own games and responding to any kind of criticism, but again, what relevance does this have?
dmsart - Except that he puts the numbers in laymans terms so that the average Homo here on Blues can understand what it means.
Breaking even and paying everyone their salary isn't enough, they need to make mega-millions-dollars-bills.
The attitude that anyone should be satisfied with their current successes is absolutely disgusting. Maybe you among others who complain here prefer mediocrity, but the rest of us not so much.
Ah, so companies should be satisfied with good enough?
Incidentally, 4% seems awfully low for an industry where so many sequels tend to get released.
our DesignMetrics™ reports help publishers and developers by identifying early in the development cycle the correct feature combinations most likely to meet consumer expectations.
For every Fallout 3 there are thirteen Deer Hunter sequels and spin-offs. These probably do not count as "significantly" profitable, but probably make enough money to keep the business moving along
Really, though, my main point was that these companies bitch about being unprofitable--but, oh, wait, no, they really just mean that they're not making as much money as WoW.
The idea is to make a lot of money, so if it makes just a little money, well, that's not enough to be deemed "profitable".
In our humble eyes, it probably would be, but you know these suits, they want enough to be able to have their cake AND eat it too.
Incidentally, 4% seems awfully low for an industry where so many sequels tend to get released. You know, Sims, Need for Speed, Neverwinter Nights, all the CSI games, Command and Conquer, all of the Blizzard and EASports sequels, GTA, Fallout, Tomb Raider, Far Cry, Call of Duty... etc... etc... etc...
If only 4% of games returned a significant profit, we wouldn't have nearly so many sequels.
During the concept and design process of a game, publishers and developers often analyze every feature in a game to ensure proper implementation for a successful release. At EEDAR, we believe that enough historical information is now available to aid publishers and developers during the concept and design process of a game. The EEDAR database, which now consists of over 6 million historical data points, can help remove the burden for publishers and developers from having to justify every feature in their title. Specifically, our DesignMetrics™ reports help publishers and developers by identifying early in the development cycle the correct feature combinations most likely to meet consumer expectations. This allows developers to focus more time and resources on creating a high quality and well polished video