Saved by sari
The cost of games
Sony earns a cut of the sales of third-party games on PlayStation, which of course it gets to keep with first-party games – meaning that its own games can justify very large budgets more easily, as they generate more revenue per unit sold. A further justification for taking this kind of risk on high development costs is that the games themselves se... See more
Rob Fahey • Redaction errors reveal the economics of exclusivity | Opinion
The whole music industry is something like $20B. Compare it to video games, a $140B market, and you see the discrepancy. Fortnite alone makes $3B a year, and most of it is profit. Same with League of Legends — they make $2B a year, mainly selling virtual goods.
Erik Torenberg • Better Aligning Value Creation & Value Capture
Naughty Dog's The Last of Us Part 2 was created at $220 million with nearly 200 staffers. Meanwhile, Guerrilla Games' Horizon Forbidden West set back Sony $212 million with 300 employees on the project.
Jeffrey Rousseau Staff Writer • The Last of Us Part 2 and Horizon Forbidden West cost Sony over $200m to develop each
As a consequence, we see, in the F2P market, exactly what you'd expect to see: F2P games typically have a lifespan of a year or less. They grow, they pull in money, the audience starts to decline, and at some point the operator concludes that life-time value (LTV) is now less that cost of user acquisition (COA), pull the plug on marketing, and the ... See more