Scaff, I give you some breakdowns by points, good discussion.
DISCLAIMER: To all else, please be aware this is purely business-talks and I urge you not to use any of the following or quote parts of this posts to use it outside the business-related takls, thank you in advance (TLDR: do not fuel the fanboysim)
When you use 15% estimate to ROI to PD from the sales (revenues) and establish a profit-breakdown, you are making one cardinal mistake: you don't count in the revenues from sales that are part of the Publisher (Sony) profit. And theat is the KEY digit, because it is actual Publisher (Sony) that is funding the development of GT series since the first game (as you know, PD is owned by Sony and has two major-of-the-major SCE people in the BOD since the beggining: Kaz Hirai and Shuei Yoshida).
So, when you use very generous 15% ROI to PD - which is probably even lower, I would not go over 7-8% myself - that is in fact the pure *profit* PD is left with as a developer, to use for whatever they like (bonuses, extra expenses, PD's own promotional costs for GT-series such as various sponsoring of the racing teams in return for tech-sharing, ettc). The true profit-margin, AKA, "does GT makes a profit as a game" is counted from what SCE - as publisher - is making from their part of revenue, and that is probably more than 50% from the sales revenue (because even the manufacturing costs and similar are not the same for third-party publisher and first-party title as GT: all PS3 blurays are mastered and printed in Sony's factories, SCE provides internal merchandise-resources with different profit-margins for 1stP and 3rdP titles, etc - so GT series also have different "percentages" once it leaves development-phase and enters production-phase).
Because GT is a first-party game there is no royalties for platform-holder involved in ROI, PD is key-technical development studio for both SCEI and SCE and they do not have to pay for development-kits, usage of SDK, whatever. Also, notice that all PD employees are in fact SCE employees in the same time, and their salaries and various costs of the studios (two locations, Tokyo and Fokuoka, network infrastructure, travels, daily work, etc.) is not entirely payed by PD, but also by SCE as part of the Publisher-obligations regarding development.
The costs for various licenses (tracks, cars, whatever) are payed and owned entirely by SCE. So, for example, if GT is needed to pay for using of Ferrari license to GT games, it is payed by SCE, not PD (if there is money involved in the first place, we don't know what are contractual clauses, so I am only giving an theoretical example).
Of course, we also have no idea about the way that relation - developer & publisher - works in terms of clauses, but I am very sure that significant percentage of PD's "daily worktime expenses" are actually covered from costs of development - which is - again - funded by SCE, not PD.
SCE is also funding all the marketing costs of GT releases, based on territory principles: SCEI is covering for Asian/JP markets, SCEE is covering for PAL markets and SCEA for US. Every national subsidiary of SCE (not regional, but national) is allocating its budget for GT series promotion/marketing and has to assure the profitability of investment within their own business-plan for the forecasted period (it is SCE Denmark that funds marketing of GT for Denmark, SCE UK for UK, SCEA for US, SCEB for Brazil, etc.). All those investments are accumulated for the ROI calculation through life-span of the game (GT is always forecasted for 3 and next 3 years in forecast and it is by far the most unique "long-legs" title in the whole console market) with altered percentages for ROI once the game enters the "Platinum" editions in particular markets.
Since GT5 there is additional profit made from DLC sales, that is split by PD and SCE and counted towards ROI, but where actual DCL production is counted in forward within forecasting the development of the "next game", so it is always the "pure profit".
PD has no "usual" cost of "development a particular game", because they are working non-stop for the last 16 years (they've produced 10 games in 16 years for 4 platforms and vast number of various spin-off projects). They are simultaneously working on many projects in the same time that are always overlapping and share the same "production budget" - which is not the usual production budget, but some kind of "overall operating cost" of the studio, which averages for aforementioned 10M$ annually (for example, at some point of time, PD was using the same 110 staff to produce GT5: Prologue and future GT5 - what they internally call "GT Engine for PS3" - GTPSP game, GT Academy project, GT4K rendering engine, GTTV applications, GT Network application while their tech-staff was already preparing for the PS4 engine development. At this moment total of 130 staff is working on GT6 optimization and updates of upcoming features, promotional assets for Vision GT project, upcoming GT Academy 2014, GT6 DLC content production, GT Mobile App production and development, GT Network optimization and their artist crew is touring the world scanning tracks and cars with "GT PS4 engine" development which is seriously underway).
When Kazunori was talking about "60M$ for GT5 budget" he was simply putting in math the actual costs of the studio made from 2004 (when GT4 released) to 2010 (when GT5 released). However, the PD is internally looking on all their projects made for PS3 platform as a unique "production cost", including GT:HD (which was free), GT5: Prologue and GT5 - which are all included in the aforementioned 60M$ of development costs.
Notice PD is also making additional revenues for many special promotional and internal projects they are making for automotive companies for their internal and public purposes, especially Japanese companies (Nissan, Toyota, Honda, Subaru). The same has been happening for Mercedes-Benz since GT5 and also they are making revenues from the GT Academy project which is contractual collaboration of Nissan (main funder of the project) and SCE and PD - where PD is both investing within the usual yearly budget and making revenues from contractual rights.
In short - and I can write down further small details, but they are not important in the greater scale - the PD is massively profitable studio for the Publisher and for themselves. The have established a game that have surpassed the influence and significance within game-market and spread itself over the real-life business and marketing practices of the car-industry and managed to establish a worldwide-marketing project that is changing even the real-life racing world. And they've done all that with studio that started as 30 people in 1998 to 130 people in 2013. So, yes, I will go that far and say how I assume how the actual accumulated ROI of GT1-GT2-GT3 games generated from 1997-2001 is still "used" to fund GT6 and GT7 development in 2014, while actual profits made from GT4 onwards have not yet even being "touched" at all.
And I find the following very wrong
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).
I can assure you how pure existence of the Forza series was never seen as any kind of real "threat" from SCE's side, maybe only from the perspective os SCEA (because Forza only managed to seriously influence GT sales on the US market, which had more to do with penetration of X360 platform in general during 2005-2010 period, and less because of the actual influence of the Forza series on the market). SCEA is having their own internal issues regarding positioning GT as a game in the US market, and IMO they are failing constantly, despite efforts from PD to meet their complaints with heavy shift of content and focus towards US-related content in GT5/GT6. But again, I think it has to do more with US being primarily X360-oriented market in past years, so situation will change again if XboxOne fails to grab the same amount of market as it had in past years over US market.
Forza series has its own merits of problems, their sales are constantly declining since peak made in 2009 for FM3 (notice, it was the time where GT5 was not yet released), and even Horizon-project didn't meet internal forecasts. FM4 sales were significantly lower than forecasted as well, and current reception and results of FM5 are nothing short of disastrous when observed from production and business perspective (ongoing production costs, 400+ staff allocated all around the world, money poured into licensing the various content, etc). Of course, decline of sales of Forza series must be observed on multi-level (FM5 would certainly sold better if XboxOne is more successful as a platform) but it doesn't change the actual outcome. Forza never even managed to outsell any GT release and while we can argue "are the sales numbers showcase of quality" until hell freezes over, the overall result simply gives very simple picture: two first-party games from the particular publisher, both with AAAA budgets and AAAA marketing-machines, both in the same genre, catering towards same audience. One is always selling at least double numbers than the other, despite equilibrated platform-saturation worldwide, but the one is also having 2.5X smaller production team which generates significantly lower production costs.
Existence of Forza have no influence to decision of SCE regarding existence of GT series. GT is absolutely unique "product" for SCE and overall gaming industry and it is much more important for Sony as a company (especially since Hirai took over 2 years ago) that many can even imagine. Even if GT6 never sell more than 5 million games, it will not be seen as "failure" within the company, because they never forecasted GT6 towards such sale.
Decision to release GT6 in such late moment for PS3 and in the same time they're releasing PS4 was heavily discussed and planned and GT6 being a PS3 game is strategic and business move with much more long-term implications many even understand. GT6 on PS3 is made to accommodate PS3 players that will not jump PS4 in the first year of new platform, to approach to new PS3/GT players that are currently "growing up" from their childhood to teenage years and with PS3-price being lowered within next 12 months, to "open" the series on the emerging markets where PS3 is currently growing strong (BRICS countries, I guess you are aware what I am talking here) and to provide needed ground to develop "GT on PS4 engine" within next 18 months, using GT6 to establish many new functionalities and options (from network functionalities, to GPS Course Maker, new weather and daytime engine, tesselation engine, etc) while waiting for PS4 to catch enough saturation as a platform to accommodate release of GT game (to have at least 5 million consoles on the market for primary-sales and to use new GT game to push further quantities).
And no Forza game has anything to do with it, trust me. GT existed long before Forza, and will exist long after Forza. We can have very subjective and "objective" opinions over million small and bigger details regarding what we like or do not like or we think it could be better in either of games, but as long as PD is successful in delivering their unique vision of GT-game, GT series will exist. Next step will certainly be further evolution of the series towards "platform" model and I think we will witness that somewhere after GT7 releases on PS4. But I will not talk about that at this moment.
In short, PD is doing more than fine and GT series as well.
