Game development 101: Only 4% of games will ever make a profit
Well no wonder you’ve got layoffs in the industry recently – not to mention the shutting down of certain studios and whatnot. According to research conducted by EEDAR, only 4% of the total games out in the market ever make a profit – all other 96% just either break even or lose money. Yeouch.
Well no wonder you’ve got layoffs in the industry recently – not to mention the shutting down of certain studios and whatnot. According to research conducted by EEDAR, only 4% of the total games out in the market ever make a profit – all other 96% just either break even or lose money. Yeouch.
The question is, what can you do as a publisher or developer to make your game into that 4% profitability rate? Try as you might, there isn’t one singular equation that will ever give you a “perfect” game. Throw in all the tried-and-tested winning elements into the equation (high-end graphics, multiplayer, replayability, etc.) and that still doesn’t mean you game’s an instant hit.
EEDAR co-founder, and also previously a game developer for eleven years, Geoffrey Zatkin confides to Forbes that:
Every game I have ever worked on, we’ve gone in blind as to which features would sell the game better.
One example he gave was that you never know if your investment of say, US$ 500,000 to include multiplayer functionality in the game will actually be worth it. Not knowing if that kind of investment will return profit, he says, “scares the crap out of me.”
They also reveal that 60% of a game’s budget is usually allocated to redesigning and reworking a game to this so-called level of “perfection”.
Using these figures (4% profitability rate, 60% of budget on reworking), it doesn’t take a lot to assume that publishers, producers, and developers have to make very tough calls when it comes to game design and development. They have to make sure that every single thing counts!
So, when you pick up that next game of yours – think. Imagine all the risk that these higher ups had to burden themselves with! Uuugh, there’s some serious food for thought for you.
When you think about, even if you did have the fool-proof equation to throw into your game, other factors that will make or break your investment: marketing, publicity stunts, failed PR campaigns, and that number one enemy – piracy.
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