So I am not an expert in business but the recent batch of AAA games which were unfinished products and loaded with micro-transactions got me thinking why companies would do this to their products. Even half baked expansion packs and premium accounts. Do they, as some of them claim, actually need more money to develop the expansions and DLCs? That the $60 we pay is not enough to cover that cost?
Let us do some math or maths:
If each of us pays $60 for the base game and we know that lets say on average for a AAA game 10 Million copies are sold. That is a total of $600 000 000
If we look at one of the best games to date: Half Life 2
It released in 2004 with a price of $40 and sold 1 million copies in the first year for a total of $ 40 000 000
The following years it was sold at half price and by 2008 8 million copies were sold. That's a total of about $140 000 000
The following years after 2008 it sold another 4 million copies at $10 each netting another $ 40 000 000
So in total they made about $ 220 000 000 worth of sales.
Half Life 2 had a development cost of about $40 000 000 and continued support which cost them another $40 000 000 just to be generous.
$220 000 000 - $40 000 000 - $40 000 000 = $ 140 000 000 of profit
They made 175 % profit to date.
Now if we look at a new game such as Battlefront 2:
It released in 2017 at a price of $60 and in its first year and it sold... oh wait they only sold like 1 million copies to date. And I doubt they will sell that much more.
Now moving on or rather back I say. Let us look at Battlefront 1
It released in 2015 and also at the price of $60 and it sold 13 million copies in its first year. That is $780 000 000 of sales.
Let us say that somehow developing a AAA game increased in cost 3 fold over the time from 2005 to 2015. So to develop a AAA game now should cost $120 000 000. I know 3 fold increase is a bit unrealistic but just bear with me.
Somehow their game support costs also increased 3 fold to become $120 000 000.
$780 000 000 - $120 000 000 - $120 000 000 = $ 540 000 000 of profit. That is half a billion dollars in profit? (225% profit)
And they say they do not have cash to make a expansion pack? With that profit they can make another 3 AAA games.
They whole argument that they need to add micro-transactions is totally crap. And somehow they cannot make a decent AAA game even with 3 times the budget which Half Life 2 had????
What is a reasonable level of profit? 50%? 100%? 200? 225%?