PS3 Games Must Sell 500,000 To Turn Profit?
We all know that software is the key to any console's ultimate success. According to a recent report on the Bloomberg news service, developers may be approaching future PlayStation 3 projects with caution, primarily because they need to sell a huge number of copies just to make it into the black. Namco Bandai Holdings Inc. president Takeo Takasu stated in an interview that PS3 titles "must be mass-market successes." Because the games cost an average of $8.6 million to create for the system, they need to sell about 500,000 copies before the developer can turn any profit.
Currently, there are severe PS3 shortages, so a half-million target will prove difficult to hit. Namco Bandai is Japan's second-largest game developer, so if they have difficulties turning a profit with PS3 games, that doesn't bode well for smaller development houses.
Namco Bandai was created when the two Japanese companies joined up in 2005. The corporations recently consolodiated that partnership and looked to compete more aggressively in Europe. They had two launch titles for the PS3 in Japan and the U.S. (Ridge Racer 7 and Mobile Suit Gundam: Crossfire, and they will have four titles available for the Japanese Nintendo Wii launch on December 2.
Namco Bandai is a big company, and these statements might frighten a lot of smaller and independent developers. If a PS3 game flops, they stand to suffer huge losses. Of course, we do expect to see lower development costs as time goes on.
11/30/2006 Ben Dutka