Apr 29 2011
How Your $60 Video Game is Chopped Up
(click to enlarge)
Via the informative folks at FeedVibe, we had this rather illuminating chart that shows exactly how much of your money goes where when you plunk down $60 for a video game.
As digital distribution takes over, I expect to see the 20% handed to the retailer to shrink dramatically. But if you think that all of a sudden games will be 20% cheaper, you’re kidding yourself. More than likely either the console or the publisher will pocket the different and keep charging you the same.
For as much as people like to claim the $60 game is going away, I have my doubts this will ever come to pass.
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Wow the developers don’t get as much of it as they deserve, the developer and publisher number should be flipped in my opinion.
Seriously! How do publishers expect to get good developers lined up when they are only making $9 per game sold? That does not seem like great financial incentive to make games…
You know, I’m not sure where they are getting that 20 percent that they show the retailers acquiring. I worked for a retailer that sold video games, and the profit margin was, at its largest, 17%, and most of the time was 15 or lower. Interesting.
Just like the music industry. Useless middlemen who water down the products are the ones making the most money. And they will use every power at their disposal to make sure the system stays this way. Gawd I hate EA.
@Cruz – the profit margin is not the same thing as the percentage of the gross sale they receive.
@Postal – ‘The secret to being a good businessman is being a great middle man.’ Though I do completely agree, EA sucks. But at least we get Mass Effect.
It actually makes sense for the publisher to be getting more. As in other industries (film, to name one of many) the non-creative side who puts up the cash gets to reap the most profit. It’s eternally unfortunate that the people whose hearts and souls went into the game get a smaller percentage of the profit, but because they owe it to the big companies who have faith in them, there’s not much that can be done.
So, on an open source console where games are self published by developers via digital distribution and marketed through word of mouth games would cost $9.
@john-
no, man, then the game wouldn’t adhere to the creative commons agreement, which is an integral part of open source. the developer could ask for donations, but with open source, its all free. the only product i can think of that doesn’t adhere to this rule and does ask straight up for money first is red hat linux and thats mostly just for the 24/7 live support and other services that aren’t part of red hats code. the developer could do the same here and offer support for the game with some payment and still be legit.
@Steven
Simply being made on an open source console doesn’t mean the game itself must be open source as well. There does exist proprietary, closed-source software for Linux, for example.
The $60 game will probably never go away, but why would you want it to? The great thing is that you can find video games at every price from $0 – $60. I’m sure you can even pay more if you wanted to.
Basically, we’ve got options, and you can’t ask for better than that.
I’d love to see how the cost of DLC breaks down.