Gaming economics

yes it's exploitative. You will always be a slave to larger corporations and will get fuck out the ass in taxes.

Making video games is a risky business.
Unless you are on the level of kojima or todd

They want a publisher to not risk their shit
If they were convinced they had a winning product, they'd put their shit on the line
But they want safety

1. house money isn't enough most of the time
2. video games are super risky to put all your house money every time you make a game

If they were convinced they had a winning product,

yeah dude good games never fail or under perform

video games are risky

hello armchair economist
if this were true you'd see rapid declination of video game development not thriving industry

There are six gorillion indie games. Are you trying to tell me that each one of those had devs with at least one house for a collateral?

he is obviously not talking about some solo dev rpg maker project

half a million isn't enough collateral

Lol
You're starting, stop thinking about the top tier spending

but it is falling and studios are getting shut downed left and right
also this has more to with projects bigger than 1-3 people passion projects but smaller then AAA which is more risky

i said it's retarded to put literally everything you have on the line to make a game
and for something like no rest for the wicked need a lot more money

Your lack of conviction is the source of all your failures

armchair artist

even great artist and skilled people fail time to time and that failure resulting in you and your family losing their house is not a great prospect

How did the economics work before digital distribution? Wasn't the sales figures based on the amount shipped to stores and it would be stores' loss if they can't shift units of games?

publisher does nothing except have money

they get all the rewards

that's why it's unfair. the role of financier could be done equally effectively by a literal fucking piggy bank, why do they get to reap all the profits? because of leverage. it's just another way that the rich fuck us.

'b-b-but what's the alternative? who would loan us money if not for the billionaires?'

there are plenty of alternatives from government-backed industry development agencies to trade associations to trade unions to credit unions or banks.

equity investment is the absolute worst form of investment if you're a business owner. you'd much rather take a loan. but anyone with enough money to loan you knows that they have you by the balls so they take the opportunity to fuck you up the ass.

risky means unprofitable

retard

posted it again!!

That's on you for trying to recreate ER as your first project while having jack shit and not willing to risk anything.

will get fuck out the ass in taxes.

but government good no?

government-backed industry

i wish i could support that but all gov backed games are the most retarded woke slop of all time and i am saying this as someone who refrains from shouting woke every time there's something progressive in game

this is beyond bad faith
whole discussion is about a medium size team making AA games

the point of a publisher is to avoid risk. fucking moron

>publisher does nothing except have money

other handling marketing and distribution?

Can somebody explain this math to me? If they need $10M to make a new game, what difference does it make if they have $200K or $2M? They're still 80% short. That's supposed to be a hit?

only person who said that is you anon ~

explain why risk would somehow prevent an industry from being successful

You mean paying other companies to take care of doing that for them.

>publisher does nothing except have money

and eat the risk
you think any of the concord developer is on the hook for the 400 million dollars they burned to the ground?

with 2M you can hire more people and have something better in your hands while looking for loan or publisher deal

Because it's rage bait. They're purposefully trying to obfuscate the part where they borrowed $12m from a publisher. So when you walk away with the $2m dollars worth of profit after paying everyone they have to also split that with the publisher who initially funded it.

This is somehow bad and them complaining that they have to do it again to make if they want to make another $300k. Like that's just raw profit the $12m paid people to make it.

I can repeat my post without making it absurd. Let's see.

That's on you for trying to create an AA game with a medium team as your first project while having jack shit and not willing to risk anything.

Hey, that stil works, what a shocker. That's just business 101. You start small and expand as you go or you take risks and go bigger. There are quite a few indies that started as 3 man teams in a basement using their savings that grew into a medium teams making AA games. That's what you're looking for.

He needed $10 million to create Ori. Microsoft provided him with $10 million to pay his developers, plus $2 million for marketing, and then they would share 70/30 of the profits.

The game generated $20 million. Steam takes 30%, leaving him with $14 million. Microsoft wants to recover its investment, so they take $12 million. Now, he's left with $2 million. He signed the 70/30 deal for the profits with Microsoft, so they took $ 1.4 million from the profits.

He's left with $600K, and the government takes its share, which is 50% in taxes. He takes home a $300K bonus on top of the CEO salary he was paying himself from the $10 million budget Microsoft provided him.

He's complaining that he made $20 million, but in the end, it came out to a $300,000 bonus, which is still a lot of money.

entire first post is about a team of people/ studio that already made good that was hit but the profits not being good enough to make another game on their own
and there is a difference between risking anything vs risking everything in volatile field

which is still a lot of money.

true but still not enough to grant to freedom to create another game of same scale.

yk often people look at good studios that got shut downed and ask "why didn't they just use the profits to make another one "
and here's the reason why

Boo hoo we have to take another publisher loan while now having accredited success

Not including where the initial loan money went outside of "game" while being the CEO of a company with $10M

Which essentially was paid back through said game selling

I mean they could take loans out in their name leveraging their business instead of borrowing ludicrous sums of money from other people incurring the risk and incur the risk themselves.

grant to freedom to create another game of same scale.

they couldn't create the first game without financing it in the first place. do these retards not understand that they are running a business?

I mean they could take loans out in their name leveraging their business

it's not that simple
not to mention they literally are using their own money on the current game they are working.
entire post wasn't about "muh poor devs" it was about how you can make a hit and still not have enough freedom to make another game of that size

If the team put their own money on the table without asking MS for it, they wouldn't have gotten enough to make another game either. OP is trying to shit on the publisher, but even going solo wouln't have changed it. They would've made 1mil instead of 300k while risking much more.

not to mention they literally are using their own money on the current game they are working.

it was about how you can make a hit and still not have enough freedom to make another game of that size

That's literally what they're doing then. It is that simple.

do these retards not understand that they are running a business?

they do the post he is explaining exactly that and how hard it to make games even with a good record because you don't go from 1 to 100 after one-two hits you only get to 10-20

, and the government takes its share, which is 50% in taxes

so literally goverment is enemy of citizen, let's relovt.

If the team put their own money

just convince your entire team to work for years for free bro

also idk about op but original post wasn't mainly about publishers being bad it was more about difficulties of maintaining a game studio

That's literally what they're doing then. It is that simple.

and they are working on razor thin margins which isn't ideal for any studio

difficulties of maintaining a game studio

Again, that's just business. You aren't expecting 300% ROI unless you're trafficking people

and they are working on razor thin margins which isn't ideal for any studio

For sure, but that's also the price for being a AA dev selling your game for $10, the same price as an indie game made on a budget of probably less than $100k. Like what are you expecting when you pump 100x the money into that?

Don't give ideas to EA.

Yeah, brick-and-mortar pre-ordered based on how many units they estimated would sell. Although it was never an issue to order more copies (except for GTA V, IIRC), it could be damaging to under/overstock in the initial sales run. Fun fact: 'AAA' refers to the head-height shelves, 'AA' the next down, etc.

hey this x thing in the system sucks, there should be something better

THAT'S THE WORLD KIDDO TOUGHEN UP OR GTFO!!!

also that post answers the old question about the slow decline of AA because not everyone is willing put everything on the line for their next game

muh art

We're talking business, retard

My favorite part about retards like this is that they're all "eat the rich", "this is unjust", and go around acting like they deserve other people's money

But as soon as they're in the same position
They're more tight assed than ever
I guarantee this faggot wouldn't offer someone 30% if he was putting in all of the capital

They're just stupid. Left wing people think there is a leprechaun's pot of infinite gold that other people are denying them out of spite

video games are both art and product
also
good businesses fail as well

Fun fact: 'AAA' refers to the head-height shelves, 'AA' the next down, etc.

AAA in video game comes from investment speak. A AAA rating means low risk. Publishers started using these terms with shareholders to refer projects they were confident would be very successful. Gaming journalists picked up on it and started using it too. Retard gamers then picked up on it and just invented other terms like "AA" which was never used in the industry.

the slow decline of AA

This implies that it was better before. Surely you could post numbers for dev costs in the past and aren't just talking out of your ass.

50% tax

Does nobody see a problem with this

also that post answers the old question about the slow decline of AA because not everyone is willing put everything on the line for their next game

Maybe it shouldn't cost $10m dollars to make a metroidvania about a fox in a forest that you're going to sell for $10? Literally if it sold for $20 they're walking away with more than triple.

Doesn't even go to national defense or infrastructure

Goes into bribes and direct payments for single mother browns and NEETs

please destroy us china

The idealized dream of communism entails everybody on the planet being extremely politically informed so that there is no need at all for government, rather all of Earth would be operated like an employee owned business. Which is the easy reason to say communism will never work if you've met half the troglodytes on this rock.

it is sold for $20 but he says it okay gets sales during a steam sale for $10

Because tax the rich actually means protect old money and fuck anyone trying to get money to do anything now. That's why all the old fucks either have 100 offshore accounts or they're just using assets as collateral to continuously borrow money because paying debt isn't taxed.

It did cost 20.
What is your solution to it being expensive then? Stop paying wages? Only hire pajeets for 2 cents a month?

The main problem is that most of it goes ostensibly into "national defense" which is really just a money wash for Defense contractors to get paid twice, Inital Goverment Investment and when Foreign nations buy the arms separately. Large DCs are allowed to operate risk free when in reality they would be terrible business if not subsidized by the government.

Well if he sold it for $30 and it went on sale for $20 this wouldn't be that much of a problem would it? Like you're selling a game you spent $10m to make for less than a game someone spent $3k to make and wondering why you're walking away with little profit.

guy is up 4 dollars

you are up 6 dollars

somehow this is exploitative

huh?

He says in the post he sold it for $10 learn to read.

ok ayn rand

its 70/30 split in favor of Microsoft. They took 1.4 of the 2 Million profits and he was left with 600K

No more taxes, the money is printed and allocated before the taxes are collected anyway. If you're going to operate as if the deficit isn't real anyway just go full bore.

i didn't to le finance my inventory for my business

aaaaaaaaaa twitterxim save meee

Worse than that, I believe in MMT.

Literally if it sold for $20 they're walking away with more than triple.

wow he should sell it for $60 then he could make 100 times more!! poggers!!

And you think finding and vetting those companies while also being responsible if they fail is an easy task? Publishers guarantee devs get money. otherwise they end up like indie devs who go completely broke no matter what.

I'm not even sure if the guy is being honest. which tax is 50%? income tax isn't 50%.

they should have taken 100% because this leech works for them and not the other way around.

Sell a game that costs $10m to make for less than a game that costs 3k to make

Be shocked that 30% of the raw profit isn't enough to just raw make another game

Still complain that you just generated $300k at no risk or cost to yourself

Maybe just don't be a retard?

bakery isn't a business because they aren't growing their own sugarcanes

retard alert

the dev is a retard yes. but the price point has nothing to do with it. if he doubled the price, his revenue could have easily fallen by half. setting prices for videogames is a tricky business and a lot of things need to be considered, budget of the game is not that important.

Well the other option is to lower the budget. Again there's no cost to the dev because I'm sure they were paid well out of the initial $10m dollary doos that they were allowed to allocate as they saw fit. Also I'm sure the price point was also set by microsoft honestly to fit with all their arcade games being $20 at the time.

Of course it's in the favor of the party that invests more and has all the risk. What's the problem here

They're headquartered in Austria apparently, which can have up to 55% taxes depending on income
Which is fucking ludicrous

So be Nintendo and never ever do sales and discounts. Sounds like a stupid fucking idea.

Or maybe when you do a sale it should be on sale for $20 instead of $10 and you should price it appropriately and not at bargain bin indie prices with shit like amogus.

publishers dont make sense in the modern day.
they're do-nothings that scrape most of your money off the top.
better off just paying the $100 deposit to list your game on Steam for free (which you get back once you make $1000 in profit)

it's real

holy shit. and the numbers look completely arbitrary. like at €12,816 per year you're effectively poor in austria and you don't pay income tax but if it's €12,817 BOOM you have to give up 20%. wtf how is this 13k/20% the first bracket?

It is pretty disheartening to make 20 million but see such a small fraction of it. That is part of the deal with the devil you make with Publishers though.

better off just paying the $100 deposit to list your game on Steam for free (which you get back once you make $1000 in profit)

Honestly not a bad plan. Ever see how many indie devs just kind of shotgun their game ideas on Steam? There's a lot of low quality shit there for sure. But the really good ones always do get some traction.

So you made the game for free? You must be a terrible fucking boss.