indiegames
February 25th, 2010, 02:50
http://cache.gawkerassets.com/assets/images/9/2010/02/500x_6a00d8341c630a53ef0120a8b7438c970b-600wi.jpg (http://cache.gawkerassets.com/assets/images/9/2010/02/6a00d8341c630a53ef0120a8b7438c970b-600wi.jpg)Seven dollars of a $60 video game purchase covers expenses for games never even sold. That's according to a breakdown of retail game cost by an on-demand games service.
OnLive, of Palo Alto, Calif., says that $7 covers, on average, "returns." That's the cost associated with returning unsold inventory - essentially, sales that don't meet expectations. By this analysis it is equivalent to the royalty paid to the platform holder - Nintendo, Microsoft or Sony.
By far the largest portion is to the publisher, nearly half of it. As it should be. But 25 percent of a game's cost is the profit to the seller. That is a very nice margin, and it - plus the fudge factor on the returns, hint at how discounts on some new games can be justified even at release.
Anatomy of a $60 Video Game (http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/02/anatomy-of-a-60-dollar-video-game.html) [Los Angeles Times]
http://ads.pheedo.com/img.phdo?p=1 (http://ads.pheedo.com/click.phdo?p=1)http://a.rfihub.com/eus.gif?eui=2226http://feeds.feedburner.com/~ff/kotaku/full?d=yIl2AUoC8zA</img> (http://feeds.gawker.com/~ff/kotaku/full?a=sddPhTOOV9o:NVmn9s-onvg:yIl2AUoC8zA) http://feeds.feedburner.com/~ff/kotaku/full?d=H0mrP-F8Qgo</img> (http://feeds.gawker.com/~ff/kotaku/full?a=sddPhTOOV9o:NVmn9s-onvg:H0mrP-F8Qgo) http://feeds.feedburner.com/~ff/kotaku/full?i=sddPhTOOV9o:NVmn9s-onvg:D7DqB2pKExk</img> (http://feeds.gawker.com/~ff/kotaku/full?a=sddPhTOOV9o:NVmn9s-onvg:D7DqB2pKExk) http://feeds.feedburner.com/~ff/kotaku/full?i=sddPhTOOV9o:NVmn9s-onvg:V_sGLiPBpWU</img> (http://feeds.gawker.com/~ff/kotaku/full?a=sddPhTOOV9o:NVmn9s-onvg:V_sGLiPBpWU)
http://feeds.feedburner.com/~r/kotaku/full/~4/sddPhTOOV9o
More... (http://feeds.gawker.com/~r/kotaku/full/~3/sddPhTOOV9o/what-your-60-really-buys)
OnLive, of Palo Alto, Calif., says that $7 covers, on average, "returns." That's the cost associated with returning unsold inventory - essentially, sales that don't meet expectations. By this analysis it is equivalent to the royalty paid to the platform holder - Nintendo, Microsoft or Sony.
By far the largest portion is to the publisher, nearly half of it. As it should be. But 25 percent of a game's cost is the profit to the seller. That is a very nice margin, and it - plus the fudge factor on the returns, hint at how discounts on some new games can be justified even at release.
Anatomy of a $60 Video Game (http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/02/anatomy-of-a-60-dollar-video-game.html) [Los Angeles Times]
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http://feeds.feedburner.com/~r/kotaku/full/~4/sddPhTOOV9o
More... (http://feeds.gawker.com/~r/kotaku/full/~3/sddPhTOOV9o/what-your-60-really-buys)