It’s hitting the point where companies are turning over their financial years, meaning that for those publicly traded we get a nice look at how healthy they actually are. For a lot of the big name companies, those finances aren’t looking too good. SquareEnix posted a massive loss for the year, EA’s finances were bad enough that their CEO resigned, companies are falling all over the place, and the picture’s only going to get darker as more and more companies report in. But what’s the problem, exactly? Their games do seem to be selling well. Where is all that money going?
Do you remember when it was considered a major milestone for a game to sell a million copies? I remember. Seems like it was a long time ago. I was a mere teenage heartthrob then, I wonder what I’d think of the market now. Just on Square Enix’s side, we have Tomb Raider selling an expected 3.4 million copies, Hitman Absolution 3.6 million, and Sleeping Dogs 1.75 million of physical copies alone, and they’re all considered failures, enough so to tank the company’s finances. AAA games are selling very well. Think of all the developers who would kill for 3.6 million sales. Yet they’re still losing money like a salaryman in Vegas.
Dead Space 3 famously had to sell 5 million copies to hit its break-even point, a mark it now seems certain it’s going to miss. It does highlight the source of the problem, though. AAA games, the games developers are throwing all their development and marketing dollars behind, are getting waaaaaaaay too expensive. Sales may be great, but the amount they need to sell to cover costs is just getting ridiculous.