I've heard estimates anywhere from 5 to 8 million needed to break even for Veilguard, but I always wonder about these back-of-the-envelope estimates and what they include.
When people project that this game needs to sell X amount of copies to break even, are they considering that 1) the platform holder takes 30% and 2) most copies will be sold at discount, not at full price?
Not that it necessarily means much but I asked chatGPT 4o this question last week, in regards a fictional game (but had veil guard in mind)...Initially I asked for numbers just based on game budget estimates (which we've been guessing at based on team size, number of years, and the typical AAA costs these days):
"If we're excluding marketing, we'll focus on the development cost of $200 to $250 million. To find the break-even point, we should consider the price of a game, typically around $60. However, not all that money goes to the developer; they might get around 50% after retailer cuts, distribution, and other expenses, so about $30 per game.
To cover $200 million in costs, they'd need to sell around 6.67 million copies ($200 million divided by $30 per game). For the $250 million mark, it would be around 8.33 million copies. These are rough estimates, and the actual number could be higher or lower."
I then asked for it to consider the marketing costs too.
"
For a heavily marketed game by a top publisher, marketing budgets are often as large as, or even exceed, development costs. Let’s assume a marketing budget matching the high end of development—around $250 million. This would bring total costs to about $500 million ($250 million for development + $250 million for marketing).
Break-even Calculations:
- Revenue per Game Sold:
- Game price = $60, but the developer's net revenue after distribution and retailer cuts is typically around $30 per game.
- Copies Required to Break Even:
- At $500 million in costs, the break-even point would be:500 million/30=16.67 million copies500 million/30=16.67 million copies
Summary:
To break even on a game with $250 million in development costs and $250 million in marketing, the publisher would need to sell approximately
16.67 million copies at an average net revenue of $30 per game.
In reality, the break-even point could vary due to factors like discounts, collector’s editions, and additional revenue streams (e.g., DLCs, microtransactions)."
Probably better than back of the envelope numbers, but could be wildly wrong. Either way if I had to guess id say the break even sales needed that most people are throwing around are likely much too conservative, and it needed to not only be a massive sustained hit, but that it wouldn't breakeven even under that rosey scenario until many years later on long tail sales. They just spent way way too much and took far too long to ship. All opinion tho until we get a leak directly related to the financials...they do seem very leaky right now, so I guess we might...and the flood gates could open more if and when the studio is closed.
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