I hope PD haven't gone bust

[TokoTurismo]

What 2008?

Basically when GT5 just released.

 

[J-KiLLA24]

What 2008?

Sorry let me rephrase that.. Before Sony started handing out dev kits to their 1st party studios.

 

[avens]

No one knows how much GT6 sold so far or how they used their budget. Although even if it sold slightly over a million that's still more than most games sell and lots of publishers would be happy with that.

Full retail price numbers should be soon, as in other games.

Being happy with the number of sales depends mostly on costs and cuts, in order to simplify the issue so we don't have to consider GT5 and prior. From amar's response we can guess the game cost $30m to develop to PD (dollars?), then come the cuts in which PD certainly doesn't make more than 33,3%, and finally the sales considering full retail price (not the $20 deals, yet).

The same perspective applies to GT5 as well, including Prologue. In advance 16m sales looks quite impressive, but then it has to be considered that it was 6 years of work (lets say $60m), that PD doesn't get all the money by any means and that a big portion of those sales were at a discounted price.

Now it doesn't look that great, but then again the side works do help (GT PSP and TT) and this is quite a simplfication, as we aren't considering other costs such as GT Academy and developing the big unreleased GT6 features aside GT7.

edit: might as well add that games are getting more expensive to produce. The alleged $10m a year should increase for GT7.

 

[Tired Tyres]

Here you go:



As I say in that original post its rough guestimates (as we have no idea how much sideways funding PD gets from Sony).

Edited to add, this will also be relevant:

15% if you are third party. PD are wholly owned by Sony Corp. who get 50%, probably plus PD's 15% so it's Sony that see 65% of the money from game sales. PD provide the product, Sony sees the profit.

PD's costs are staff of 110-150 and licences. Compare that to Turn 10 with about 400 staff, if I recall correctly, plus outsourcing, which is more expensive than in-house, and licencing. They are probably in the same boat with Microsoft as PD is with PD.

Their costs should be higher due to staff levels and they don't sell anywhere near as many copies of any of their games as PD.

If Sony was anywhere near shutting PD down, I'd say T10 would have been history a long time ago unless Microsoft are using them as loss leaders - which I very severely doubt. Therefore T10 must turn a profit and if they do then so must PD since costs would be lower and sales higher.

 

[grashopper]

Could you now provide the actual revenue generated for each of those titles, the development and distribution costs and the resulting profit made per title?

As without it your claim doesn't stack up.

I did it with rough estimates (that worked in PD's favour) last year and GT5 only broke even once its had achieved around 9 million units, so profit to cover them for a decades seems way too optimistic.

Wasn't it said at one point the sales of GT5P paid for the development of all of 5? So that would make 5 pretty much all profit.

 

[Unknown?]

Did you actually read my post? I said in GT history...I think this will be the worst selling GT game so far, only compared to other GT games.

Yeah I read your post and I heard everything you are saying about GT6 before with GT5. A lot of people claiming GT5 wouldn't get close to the usual 10M.

 

[Scaff]

15% if you are third party. PD are wholly owned by Sony Corp. who get 50%, probably plus PD's 15% so it's Sony that see 65% of the money from game sales. PD provide the product, Sony sees the profit.

PD's costs are staff of 110-150 and licences. Compare that to Turn 10 with about 400 staff, if I recall correctly, plus outsourcing, which is more expensive than in-house, and licencing. They are probably in the same boat with Microsoft as PD is with PD.

Their costs should be higher due to staff levels and they don't sell anywhere near as many copies of any of their games as PD.

If Sony was anywhere near shutting PD down, I'd say T10 would have been history a long time ago unless Microsoft are using them as loss leaders - which I very severely doubt. Therefore T10 must turn a profit and if they do then so must PD since costs would be lower and sales higher.

Oh I most certainly agree that T10 are a loss making part of MS, one that MS will continue to fund as long as the GT series exists.

Wasn't it said at one point the sales of GT5P paid for the development of all of 5? So that would make 5 pretty much all profit.

I seriously doubt that is the case.

GT5P sold 5.5 million units (well just under that), at $23 a unit (rough and generous average) would be $137 million. If Sony return half of that as profit I would be surprised, which would be circa $65 million. Which would pay for GT5 development, if it were not for the fact we now need to cost in however much GT5P cost to develop and how much was wasted in the deadend that was GT:HD (as in the original micro transaction idea and the early demo).

So while it will have helped, it certainly would not have paid for it outright at all, which brings us back to why GT6 is so damn important as a PS3 title.

 

[Zuku]

I definitely think GT6 will be the biggest flop in GT history, for reasons well documented - most notably the timing of release, disappointment with GT5, and a lack of changes.

However, no matter how poorly GT6 sells, it will not mark the end of the franchise. Sony is too aware of the legacy of GT, and the potential profit to be made from a market that is largely serviced only by GT (and Forza to a degree on Xbox).

What I could see happening though, is Kaz and his team being canned. Sony may give them one more chance at GT7 on PS4, but I have a feeling they will be on a rather short leash after the fiasco that has been GT5 and GT6.

I have mixed feelings about replacing Kaz...I'm a fan of his previous work, but i am growing uneasy with where he seems to be headed. My fear if he is replaced though, is that someone who lacks the passion for cars would be put in his place, and GT would head down the path of Forza or NFS.

Honestly that's almost not fair because so far GT6 > GT5 there is no question in that, but thanks to GT5 being what it was it's just the harsh reality that I knew would happen.

Think PD really needs to work with other developers like Codemasters I'm not saying their perfect, or anything, but darn it they do a great job in making you believe in their product at least F1 2012 does.

Seems to me as well that all these threads popping up about bad part of GT6 leads me to believe that majority although the Tire physics and even vehicle physics are great. Still comes down that majority would take other stuff besides this because as a simulator the game is good(well it can be argued).

But as a video game maybe not so much. Just did a run around Motegi Ring that has to be one of the most boring courses in the game.

 

[Earth]

I dont think PD has to be profitable in order for Sony to keep them around. The key is, I think, Gran Turismo's ability to sell consoles. Theres only a handful of exclusives out there in which people buy consoles in large numbers to play. You'll hear people say they wont buy a console until the first Halo or Gran Turismo is released.

As long as PD continues to make a game that sells consoles, I think Sony will keep them around even if they operate at a minimal loss. If PD loses Sony $20,000,000 but in turn is directly responsible for around lets say 3,000,000 PS4 consoles being sold Im sure Sony will see that as a profitable tradeoff. Very similar to how Microsoft tolerates Turn 10 losing so much money. They know Forza 5 sells consoles and it provides the Xbox with an answer to Gran Turismo.

 

[mcfizzle]

Could you now provide the actual revenue generated for each of those titles, the development and distribution costs and the resulting profit made per title?

As without it your claim doesn't stack up.

Doesn't what you wrote here basically apply to everything else you've written in this thread?

 

[FishHunters]

Money speaks the loudest. Its a matter of providing "product" that people "want". They just need to keep listening and giving the customer what he wants.

 

[montez34]

 

[Tenacious D]

Even the hardcore fans are getting fed up now.

I definitely think GT6 will be the biggest flop in GT history, for reasons well documented - most notably the timing of release, disappointment with GT5, and a lack of changes.

The gamers were so disappointed with GT5 that it moved another million units between November 2012 and August 2013, and this was in a market flooded with used copies.

Oh noes.

 

[Scaff]

Doesn't what you wrote here basically apply to everything else you've written in this thread?

I've provided a reasonable speculation based on actual information available. While not 100% accurate (and I have never claimed it to be) its does have basis in sales, development costs and normal revenue to profit returns.

So no its not the same.

 

[HoneyBadger]

Project Cars seems to have a lot of potential and the community based development approach seems to be almost a polar opposite to that used for the GT-Series which seems to be largely developed in a vacuum with very little attention (relatively speaking) to the wants and desires of those that have played previous titles in the series. Having said that I am really enjoying GT6 and basically having a blast with it.

 

[Saidur_Ali]

Sony see no return = No more GT.

Simple as that!

It is not that simple, if it was Sony would have done that to many parts of their business including potentially PS3. They will have very little to offer if you shut anything down as soon as they see no return.

Anyway using Scaff's source of a very rough estimate break down, and say I go down to $30 a game.

$147,870,000 is what Sony potentially profited from their first party studio on one game. I doubt their concern will be with PDI that GT6 is some kind of make or break for them. They have studios a lot worse off than that. Also given how much previous games have likely made, I don't think it will be a big panic like this, "Oh no we made about a billion $ for you Sony, and we might make X million on this game". I doubt they are worrying about being bust anytime soon, I think it is more Sony's concerns on other things that make heavy losses than some highly profitable franchise of theirs, still likely remaining their most profitable franchise of each generation. Also the game will likely help drive PS3 sales on for few more years, maybe a new slimmer PS3 come too that is much more profitable too. Not bad for something with intention of being something to fill the void of no PS4 version at launch and also something for people who might not get the PS4 and have the PS3 or will get it.

 

[mcfizzle]

I've provided a reasonable speculation based on actual information available. While not 100% accurate (and I have never claimed it to be) its does have basis in sales, development costs and normal revenue to profit returns.

So no its not the same.

I would say it is. You ask him to provide actual revenue and cost but go on speculate that info yourself.

 

[Zuku]

The gamers were so disappointed with GT5 that it moved another million units between November 2012 and August 2013, and this was in a market flooded with used copies.

Oh noes.

Maybe because GT is the only kind of Racing game you can get on PS3 at that point. How about let's wait and see what Drive Club and Project Cars does because now PD may have some competition.

 

[phil_75]

The gamers were so disappointed with GT5 that it moved another million units between November 2012 and August 2013, and this was in a market flooded with used copies.

Oh noes.

What has sales got to do with what i said? but ok that means COD must be the best game ever and is loved universally then.
Those people that got burned by GT5 aren't coming back for GT6 as seen by the poor sales!

So GT5 isn't known for being a half finished mess with poor UI, loading times, PS2 assets, horrible sounds etc?
The amount of people complaining on here - passionate GT fans - doesn't say to you "even hardcore fans are getting fed up"?

Open your eyes!

 

[ScouserInExile]

15% if you are third party. PD are wholly owned by Sony Corp. who get 50%, probably plus PD's 15% so it's Sony that see 65% of the money from game sales. PD provide the product, Sony sees the profit.

It's been a while since I've worked in the games industry, but the way it worked back then for a new game sale:
50% went to retail
10% went to duplication and distribution
15% went to the hardware manufacturer
25% went to the publisher
There were essentially two ways the developer would see some profit. Either the publisher would agree a set development cost and then the developer would get a percentage of the profit over and above that cost. Or the publisher would entirely fund the development, essentially paying all the developers costs until the game was finished, then the developer would be on what amounted to a bonus scheme where the publisher would make regular payments to the developer, depending on sales performance.

Obviously, with digital distribution, these figures will have changed, but I don't think they would be that different these days.

The Sony / PD relationship would fit into the second category. Sony will be entirely funding GT's development by paying all of PD's costs, then will pay them bonuses based on how well the game does.

So, would Sony ever close down PD? Of course they would. They are spending millions on the development of the GT series and have shown that they won't keep spending this money if there is nothing in it for them.

I can't see this happening any time soon, I would have thought GT7 would be key. But I imagine it will happen at some point.

 

[ScouserInExile]

Fixed.

I haven't trusted game reviews since the 16bit era. Too much money involved and people are too easily coerced by shiny things, freebies and perks.

However, you are not really representative of the general game buying public. You can draw a direct correlation between review scores and game sales the vast majority of the time. Notable exceptions being cash-cow franchises, big licences and niche titles.

 

[priesty_lfc]

First off,

Personally I don't think you can compare PD to Studio Liverpool, yes SL were successful but not in the same league as PD, but also there Japanese, would Sony close down one of there own? I don't think so based on Team Ico, have they even realised a game recently? The Last Gaurdian has been in development forever and there still putting money into it.

Also isn't Kaz is part of Sony first hand so I doubt he would allow it to happen anyway?

Oh and also DLC wise I'm sure there were pretty much minimal costs in that so from what they sold would have been profit, yes it wouldn't be mega profit but still profit is profit.

 

[Imari]

The gamers were so disappointed with GT5 that it moved another million units between November 2012 and August 2013, and this was in a market flooded with used copies.

Oh noes.

The $20 game that came with $20 of DLC? Yeah.

I couldn't have sold my day one copy used for more than about $5 after XL came out. Nobody with a vanilla version could really get rid of their copies for any significant amount of money, because XL was so cheap and objectively better.

 

[imported_xxDingerxx]

So let me get this straight. PD are a couple of days late in releasing what is presumed to be 1.03 and people are summarising that PD are going bust. Then they, including a mod are using guesswork (along with VGChartz, the mother of all 'lets take a guess sites) to backup their claims.

I don't know why I feel that this sites forums have really gone downhill in recent years...

 

[poe64]

So let me get this straight. PD are a couple of days late in releasing what is presumed to be 1.03 and people are summarising that PD are going bust. Then they, including a mod are using guesswork (along with VGChartz, the mother of all 'lets take a guess sites) to backup their claims.

I don't know why I feel that this sites forums have really gone downhill in recent years...

I've been reading the posts in this thread and they are quite civilised and interesting for a change.
It's only a bit of speculation and conversation.

 

[Kobooi]

So let me get this straight.

When people start their post with "let me get this straight", guaranteed what follows is anything but straight. Yours was no exception.

 

[ScouserInExile]

First off,

Personally I don't think you can compare PD to Studio Liverpool, yes SL were successful but not in the same league as PD, but also there Japanese, would Sony close down one of there own? I don't think so based on Team Ico, have they even realised a game recently? The Last Gaurdian has been in development forever and there still putting money into it.
.

Business is business at the end of the day. If a division of a company is making a loss, then the company has a duty to its shareholders to cut that division loose. Nationality has nothing to do with it.

As far Team ICO, my guess would be that while they might not actually be hitting milestones the will be producing something Sony like the look of.

Also isn't Kaz is part of Sony first hand so I doubt he would allow it to happen anyway?

.

Do you really think he holds that much influence over a multinational corporation like Sony? Even if he was CEO, he could be over ruled by the board or even removed by shareholders.

 

[Scaff]

So let me get this straight. PD are a couple of days late in releasing what is presumed to be 1.03 and people are summarising that PD are going bust. Then they, including a mod are using guesswork (along with VGChartz, the mother of all 'lets take a guess sites) to backup their claims.

I don't know why I feel that this sites forums have really gone downhill in recent years...

My comments have nothing to do with 1.03, nor have I said that PD are going bust.

Just wanted to get that straight.

 

[priesty_lfc]

Business is business at the end of the day. If a division of a company is making a loss, then the company has a duty to its shareholders to cut that division loose. Nationality has nothing to do with it.

As far Team ICO, my guess would be that while they might not actually be hitting milestones the will be producing something Sony like the look of.



Do you really think he holds that much influence over a multinational corporation like Sony? Even if he was CEO, he could be over ruled by the board or even removed by shareholders.

Of course business is business, but the Japanese do operate slightly different to the western world and for them just to cut lose PD would be a massive massive statement.

And no of course I don't think Kaz has that much of a say but if Sony were even considering getting rid of PD I'm sure he would be doing everything he could to convince them otherwise.

Weren't they also involved in development for the PS4? I would take that as regardless of GT6 sales they're in it for a while yet!

 

[Scaff]

Of course business is business, but the Japanese do operate slightly different to the western world and for them just to cut lose PD would be a massive massive statement.

And no of course I don't think Kaz has that much of a say but if Sony were even considering getting rid of PD I'm sure he would be doing everything he could to convince them otherwise.

Weren't they also involved in development for the PS4? I would take that as regardless of GT6 sales they're in it for a while yet!

As long as PD exist then MS will fund T10, and as long as T10 exist then Sony will fund PD (unless sales volumes utterly tank for either of them).