The Business of games

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The Business of games
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Games are big business

• Currently bigger than Hollywood box office sales.
• Global gaming currently estimated to be worth 35
  Billion Dollar.

3
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

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Market share
5
Publishers by country
6
Largest publishers
7
Number of people employed
8
New technologies
7th generation gaming systems
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Graphical evolution
1994
2007
System shock 1 187 MB
Bio shock 1 6.1 GB
Content (graphics / music) can be compressed
with a factor 10 to 1 A blu ray dvd can hold 25GB
(single layer) -- 250GB (artwork)
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Rising costs
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Then now

• 1982 Pac-Man (Atari) VCS
• 1 programmer
• 4 months
• 100.000
• 10M copies at 30 each
• Cost of goods 5
• Profit 250M
• 2004, Halo 2 (Microsoft) xbox
• 190 people
• three years
• US40 million.
• 8M copies at 50
• Profit 350M

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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 1.50
  -----------
  
  25.00
• Development costs 7.5M
• Marketing costs 7.5M
• need to sell 600,000 units just to break even!
  very few games do.
• In 2004 12 games sold more than 1 million units
• 52 console games sold more than 500,000 units
• 2500 titles are shipped each year!

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costs vs profit

• Resources required to produce games has
  significantly increased
• 1992 350.000
• 2006 8M - 14
• 2010 25M??
• Price of computer games has remained the same!
• Development kits software for consoles are more
  expensive (13000 per kit)
• you have to sell a lot of games to make a profit!

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Movements in the industry

• High costs low of success
• Refinement fewer and higher quality titles.
• Consolidation publishers buy successful game
  companies.
• Decline in innovation what-has-been-sold-before-
  will-sell-again ? expansions/sequels/ copycat
  products (match-3).

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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

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Problems in the game industry

• Costs (70 of costs are in generating
  content/marketing)
• High risks (publish or perish).
• Other problems
• Schedule slips (Duke Nukem forever)
• Crunch time / Christmas rush
• High turnover (average career in the game
  industry is only 5 years).
• Programmers earn less in the games industry than
  in any other field of CS.
• Q Do you still want to work
• in the games industry?

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Is there any hope?

• Yes there is!
• casual gaming market
• Indie gaming market
• Educational games

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Casual gaming market

• Now - 350 million
• 2008 - 1 billion
• 2010 - 80 million players
• 60 are female
• 2 billion mobile phones
• 100 million ipods

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Indie games

• 1-3 people working on a game (full / part-time)
• Dev time
• Sell for about 5 - 20
• Self distribute or Steam/ Xbox live arcade
• Sell by word of mouth

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Success indie games
Revenue 10.000 copies 20 each
cost spare time 8 months
Profit 200k
And still selling
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Educational games

• Reader rabbit etc.
• Market is huge and not explored.
• Educational games sell better than violent
  games.
• Not very Graphic intense

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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!

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But first

• Learn how to use Game Maker!