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The Business of games

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Currently bigger than Hollywood box office sales. ... 2004, Halo 2 (Microsoft) xbox 190 people. three years. Cost: US$40 million. 8M copies at $50 ... – PowerPoint PPT presentation

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Title: The Business of games


1
The Business of games
CS281 Intro to Game Development
2
GAME INdustry
3
Games Big Business
?????????
  • Currently bigger than Hollywood box office sales.
  • Global gaming industry currently estimated to be
    worth 35 Billion Dollar.
  • Despite economic downturn 08/09 projected to be a
    record years

4
Business break down
  • 200 million play PC games
  • 140 million play console games
  • 100 million play handheld games
  • An estimated 40 of people play games.
  • 43 of all gamers are women
  • 60 of all gamers are 25 to 44 years old

4
5
Market share
6
Publishers by country
7
Largest publishers
8
Number of people employed
9
Whos playing?
  • An estimated 63 of US population plays games!
  • The average gamer is not an 18 year old boy
  • 43 of all gamers are women
  • 60 of all gamers are 25 to 44 years old
  • Percentage of People that play games is still
    increasing!!!

10
Game evolution
11
Graphics / AI / Physics
12
Interaction
13
Technology drives expectations
14
increase in storage capacity
1994
2007
System shock 187 MB
Bio shock 6.1 GB
15
Development costs rise
  • 1982 Pac-Man (Atari) VCS
  • 1 programmer
  • 4 months
  • Cost 100.000
  • 7M copies at 30 each
  • Cost of goods 5
  • Profit 175M
  • 2004, Halo 2 (Microsoft) xbox
  • 190 people
  • three years
  • Cost US40 million.
  • 8M copies at 50
  • Profit 360M

16
Shift towards networked games
  • Increasing connectivity
  • Surge in online multiplayer games
  • MMOs World of Warcraft
  • FPS Call of Duty, BF1942
  • Attractive business models

17
problems
18
Rising costs
19
Hit driven industry
  • 500k copies to break even
  • In 2004 12 games sold more than 1 million units
  • 52 console games sold more than 500,000 units
  • each year 800 new games
  • Estimated that only 1 in 7 games makes a profit
  • Top 99 of all games (3.3 of development)
    accounts for more than 55 of all sales.

20
How many games do you have to sell?
  • The wholesale price 35.00
  • Platform license fee
    4.00
  • Box, manual, DVD
    4.00
  • Shipping, support
    2.00

    -----------
    net
    profit 25.00
  • AAA title.
  • Average dev costs 10M
  • Marketing costs 5M
  • Need to sell 600k to make a profit.

21
Winner takes all
1. WII PLAY W/ REMOTE Nintendo of America FEB
2007 (E) 1 5.28 million 2. WII MARIO KART W/
WHEEL   Nintendo of America APR 2008 (E) 2 5.00
million 3. WII FIT W/ BALANCE BOARD Nintendo of
America MAY 2008 (E) 3 4.53 million 4. WII SUPER
SMASH BROS BRAWL Nintendo of America MAR 2008
(T) 4 4.17 million 5. 360 GRAND THEFT AUTO IV
Take 2 Interactive APR 2008 (M) 5 3.29
million 6. 360 CALL OF DUTY WORLD AT WAR
Activision Blizzard NOV 2008 (M) 6 2.75
million 7. 360 GEARS OF WAR 2 Microsoft NOV 2008
(M) 7 2.31 million 8. PS3 GRAND THEFT AUTO IV
Take 2 Interactive APR 2008 (M) 8 1.89
million 9. 360 MADDEN NFL 09 Electronic Arts AUG
2008 (E) 9 1.87 million 10. NDS MARIO KART
Nintendo of America NOV 2005 (E) 10 1.65 million
  • Top 5 games 23M
  • 200/300 new games a year
  • Top 20 ( 10) 60 of the market
  • Pareto principle (80/20)

22
Consolidation
  • Publishers buy successful companies
  • Bad companies go out of business
  • Spread Risk
  • Only publishers have the scale to develop
    multiple projects

23
Decline in innovation
  • What-has-been-sold-before-will-sell-again
  • copy cat products
  • expansions / sequels

24
Top 10 best sold games 2006
  • Madden NFL 07 (ps2)
  • Kingdom of Hearts 2 (ps2)
  • New Super Mario Bros. (DS)
  • Tom Clancys Ghost Recon (360)
  • GTA Liberty City Stories (ps2)
  • NCAA Football 07 (ps2)
  • Madden NFL 07 (360)
  • Brain Age (DS)
  • Elder Scrolls IV Oblivion (360)
  • Fight Night Round 3
  • Source Forbes magazine


the only new IP
25
schedule slips
spore
duke nukem forever
  • Only 1 in 10 games is developed on time
  • hard deadlines

26
high turnover
  • 75 have less than 8 years experience.
  • Crunch time / burn outs / 100 hour work weeks
  • Salaries in the game industry lower than in any
    other CS industry.

27
Is there any hope?
28
Indie games
  • 1-3 people working on a game (full / part-time)
  • Dev time
  • Sell for about 5 - 20
  • New innovative ways of playing
  • Self distribute or Steam/ Xbox live arcade
  • Sell by word of mouth
  • Good way to get in the game industry

29
Casual games
  • 2008 - 1 billion
  • 2010 - 80 million players
  • 60 are female
  • 2 billion mobile phones
  • 100 million iPods 10M iPhones
  • Investments small / profits large

30
Steps to play an FPS
  • Game provides feedback enemies/ gunfire/ sound
  • Player decides what in-game response to provide
  • (a) Do nothing.
  • (b) Move or reorient his/her character.
  • (c) Fire his/her gun.
  • (d) Change the weapon.
  • (e) Change the camera viewpoint.
  • (f) Reload, pause, or save the game.
  • The player must physically issue the chosen
    action(s) through a physical device.
  • The internal state of the game may change and new
    feedback may be provided

31
Educational / Serious games
  • Market is huge and not explored.
  • Educational games sell better than violent
    games.
  • Not necessarily very Graphic intense

32
How do YOU get into the games industry?
  • start small but think big
  • Create indie/casual games while you study.
  • Build a portfolio
  • Come up with unique new concepts.
  • Find your market / niche.
  • Identify your weaknesses / strengths
  • People do make a living of indie / casual games!

33
Independent Games Festival
  • http//www.igf.com/02finalists.html
  • Deadline IGF 2010 October 2009
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