Production costs

25 05 2009

Guys, I don’t know a thing about economy. The little I know about production costs I learned from reading around in probably unreliable sources. But I keep reading news like this:

Halo 3, an extremely popular game produced by Microsoft, is estimated to have cost $30m (£15m). However, the American software giant was able to recoup that, and the millions more spent on marketing, straight away.

On its first day of sales, it brought in $170m, setting the record for the most money earned in a day by an entertainment product. It far outstripped the money made in a day by Spiderman 3, the biggest-grossing Hollywood film.

(http://news.bbc.co.uk/1/hi/business/7151961.stm)

So, Halo made 5,67 times more money than what it cost to produce. On its first selling day. Probably less, if you count the marketing in, but I’m guessing you could still produce at least 3 or 4 Halos out of that money. In a day. Now, I know that all the companies have flops. Sometimes big flops. But, really, do you think they have $140m on flops, needing to be covered everyday? If they reduced the price of the game to half, they would still earn $85m. For a game that cost $30m + marketing to produce. Maybe I’m a spoiled brat who doesn’t understand the power of money, but it still seems pretty nice. Considering that with lower prices they would probably sell more, maybe $85m is a low estimate. It would still pay for the flops. I mean, one day could pay for 2 or 3 flops that take months or years to produce (considering every game with the gigantic production costs of a game like Halo 3).

Now, I know that’s a lot more to consider in this matter. Companies are always expanding, the industry is always changing. Well, the customer is changing too. And, as I said in my previous post, I’m more than willing to pay for the things I like, if I think they’re charging a fair price. Right now, I don’t think that about most of the games. I wish a company would be smart enough to lower their release prices, because it would benefit them, the consumer and the industry. Because right now we’re in the middle of a world crisis. We’re finally thinking “MAN, THIS GAME IS FUCKIN’ EXPENSIVE”. Before, we thought we could pay for them. Right now, we know we can’t. We’re still paying, however, because we like games, but we’re demanding good treatment. When I give 59€ for a game, I want it to be released on time, I want it to be almost bug-free, I want it to be the best game it could be. So, I download it. I try it. If I love it, I buy it. It’s unfair? Oh, man, it is. I almost feel bad for it. But then I think “I never saw a game being more expensive because of pirates”. Really, I never did. They were expensive way before that. We’re hurting a billion-dollar industry, they’re hurting millions of not-rich players. I think we’re even. When they give me a game that is good, on the right time, with a fair price that will still double their investments, I will buy it. Because my problem is simple: The only reason I don’t buy most games right now is because I can’t afford that much money on something that’s not worth it. And when a company rips off half of the game so it would only be available ton online players with a visa card, I’m sorry, but it isn’t worth it.

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