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Only 4% of games make a profit

Ben Parfitt
California based research company Electronic Entertainment Design and Research has claimed that only four per cent of titles that make it to market go on to make a profit.

Speaking to Forbes Geoffrey Zatkin, president of the 20-man sales data firm, divulged a number of interesting facts relating to a study recently completed for Ubisoft regarding possible upcoming title FutureNot.

He added that around 60 per cent of a game’s budget is spent reworking or redesigning a game, as well as stating that the average sales total for an Xbox 360 game is around 216,000 units – with the middle 50 per cent of published console titles selling between 75,000 and 250,000 units.

The average PS3 title, in contrast, sells a very specific 192,256 copies, meaning any title releasing on both Sony’s and Microsoft’s platform can expect to sell 408,336 units on average.

Implementing a co-op mode in a given title is likely to boost sales by 12,400, whilst multiplayer features could see a sales hike of 25,000 copies. As this represents an addition revenue stream of around $1 million, EEDAR states that providing the total cost for these modes is no more than $300,000, it would be well worth doing.

Also highlighted is the fact that ongoing DLC releases help keep titles out of the second-hand areas of retail – and the fewer titles available second hand the better sales of new copies are likely to be.

UPDATE: Edge Online has published an updated statement from EEDAR that reads:

"This was just a big mistake. What Geoffrey said was that only 20 per cent of games that start production will end up with a finished product. And of that percentage of finished games, 20 per cent will make a profit.”

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

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Tags: GAME , Development , eedar , average , profits

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