GTA IV estimated to have cost $100 million to produce...

[[Matt]]

http://www.shacknews.com/laryn.x?story=52464

 

[Pesmerga]

How many games actually gross 100mil?

 

[[Matt]]

maybe only 2 or 3 a year (besides wow which does 100mill+ per month)

 

[PvtRyan]

It will break-even in the first week of its release, hell, probably five times over. According to one source, 9 million copies have been sold so far.

 

[Tyguy]

what are the figures for launch day, any idea how much was made?

 

[VictimOfScience]

I am glad it was expensive. Don't want them skimping on the details which clearly they have not. A real labor of love.

 

[Iced_Eagle]

Crazy amount of money, but then again, it's one of the best games ever.

They will definitely make that money back.

 

[Kadayi]

They will definitely make that money back.

Half that money goes into the retailers pockets and a good third more goes into the publishers pockets (MS and Sony might get a share also). It's only after that, that Rockstar themselves get their share. So they still have to sell a lot more units yet before they break even. They will definitely have to release it on PC as well, in order to do so. :dozey:

 

[Iliketobenaked]

MS paid for half of that then
also they said it was gonna make $400mil the first week alone...so yeah.

 

[Kadayi]

MS paid for half of that then

MS paid for the DLC and MS will expect to make a profit on it.

 

[Bad^Hat]

Most expensive title since... Shenmue? An eight year old Dreamcast game?

 

[StardogChampion]

I thought it would've been double that.

 

[Kadayi]

GTA:SA sold 21.5 million copies over 4 years across all platforms based on Take 2s latest figures, which is 4 million more than GTA:VC sold. Certainly there is a bigger market out there for GTA IV, but not one big enough to make a profit for Rockstar on a $200 million dollar investment. Unlike films there's not much in the way of residuals with gaming. People buy the game and that's it. Some people might rent it, but it's a small market, esp for a game of GTA IVs size.

 

[Krynn72]

GTA:SA sold 21.5 million copies over 4 years across all platforms based on Take 2s latest figures, which is 4 million more than GTA:VC sold. Certainly there is a bigger market out there for GTA IV, but not one big enough to make a profit for Rockstar on a $200 million dollar investment. Unlike films there's not much in the way of residuals with gaming. People buy the game and that's it. Some people might rent it, but it's a small market, esp for a game of GTA IVs size.

What? It was a 100 million dollar investment and all they need to sell is 2 million copies of the game and they'll break even. Considering they sold almost 610,000 copies in the first 24 hours in the UK alone, I dont think its going to be much of a problem for them.

EDIT: Looks like sales on the first day netted them a 70 million dollar profit.

So the sales figures for Rockstars epic are starting to roll in and VGChartz have reported that 4.2 million copies were sold worldwide on April 29th. They also state that the Xbox 360 version in the Americas had a sell ratio of 6:4 with the PS3 version.

As for revenue (American) made Rockstar have reportedly USD $170 million on the first day of sales. To compare, Microsoft have said that Halo 3 brought in about USD$170 million in first day revenue as well so the two mega giants seem to be on par at the moment.

http://dimorphic360.wordpress.com/2008/05/01/gta-iv-first-day-sales-figures/

 

[Kadayi]

What? It was a 100 million dollar investment and all they need to sell is 2 million copies of the game and they'll break even. Considering they sold almost 610,000 copies in the first 24 hours in the UK alone, I dont think its going to be much of a problem for them.

*sighs

Krynn, sure they'd recoup their money on 2 million unit sales alone but only if the retailers didn't take 50%, Take 2 another 30% MS & Sony their licensing slice and the tax man his share, but unfortunately Rockstar operate in reality. They need to shift a lot more than 2 million units to break even, let alone start make an actual profit, and one that will finance further developments. $100 million is an unprecedented amount to spend on games development.

Revenue is money passing hands, but revenue is not actual profit.

Total sales to date for Halo 3 are 8.1 million units world wide. That's the 'must have game' for 360. GTA IV isn't going to sell excessively more than already has, and the 360 is outselling the PS3 release.

 

[Krynn72]

Was that 100 million out of just rockstar's pockets though?

 

[Kadayi]

Certainly they had investment in it (MS for a start) but investment carries obligation. No ones going to bankroll your project and happily let you pay them back what they gave you + 10% on top whilst you pocket the rest.

The only aspect I care about is the likelihood of a PC release. Given the expenditure, which is even more than I envisaged, its a certainty. The only question remains is when.

 

[[Matt]]

*sighs

Krynn, sure they'd recoup their money on 2 million unit sales alone but only if the retailers didn't take 50%, Take 2 another 30% MS & Sony their licensing slice and the tax man his share, but unfortunately Rockstar operate in reality. They need to shift a lot more than 2 million units to break even, let alone start make an actual profit, and one that will finance further developments. $100 million is an unprecedented amount to spend on games development.

Revenue is money passing hands, but revenue is not actual profit.

Total sales to date for Halo 3 are 8.1 million units world wide. That's the 'must have game' for 360. GTA IV isn't going to sell excessively more than already has, and the 360 is outselling the PS3 release.

Nowhere in the report did it say that Rockstar alone stumped up the entire budget. On massive triple A+ titles that are a guaranteed hit its quite common for the publisher to put up some of the cash to cover the cost of a games development these days usually on a percentage in percentage out deal (e.g. 25% of the costs for 25% of the profit).

 

[Kadayi]

Matt whether you finance something 100% or 50% your only getting your share of the revenue back, after everyone else has their slice.

 

[Krynn72]

I may just be making shit up, and proving my incapability to do math, but lets say Rockstar was on its own and fronted all of the 100 million for production. They would only need to sell 2 million copies to get that back. But lets say Microsoft fronted 30% of it, wouldnt they still only need to sell 2 million copies for both Microsoft and Rockstar to break even? Of course thats ignoring the percentage of the "cut" that they agreed microsoft would get, but would it realistically be that much more than 2 million for Rockstar to break even?

 

[Kadayi]

A good 40 - 50% of the cost of whatever game you buy in a store, stays with the retailer (walmart, amazon, whatever). The other 50- 60% goes to the publishers/developers/licencees (the guys who bear the development costs) and is split according based on interest.

So although 2 million unit sales at $50 a pop goes generate $100 million, only $50 million or so of that gets kicked back, and that gets divided amongst the interested parties based on investment. In order to break even on $100 million investment you'd have to sell 4 million units to just recoup your investment, it's only when you sell beyond that amount that you start to generate profit. Bear in mind also everyones liable for tax on the profits as well. What Rockstar have spent in terms of game development is probably unprecedented tbh. It's akin to the kind of money James Cameron poured into making Titanic.

 

[perrkele]

Does GTA IV really cost only like $50 in the States? Here in Finland (and I'd imagine throughout Europe) new xbox360/ps3 titles cost like 70 euros each. Just saw an ad for GTA IV for 69.90e. That's like 110 USD or so. Perhaps they're counting on overseas sales to cover up the development costs

 

[TCfromBN]

GTA IV is 59.99 USD here, in most cases.

 

[Kadayi]

perrkele

I was using $50 as a round example figure to demonstrate the principal for Krynn, but retail is about $60 generally. Certainly Rockstar/Take 2 are looking at worldwide sales, rather than North America only to recoup their investment and start to generate a profit, which it will certainly do. It's just that the development costs of the game is so much higher than anything that's come before it which makes it so very interesting in this case.

 

[Hectic Glenn]

GTAIV in the UK costs 39.99 pounds, which is about $80 as I'm sure you know, so you can see how we get shafted over here. I read somewhere on launch day Rockstar had 6 million preorders to satisfy, so I'm confident with the worldwide release that they're already in the profit zone quite comfortably!

 

[Kadayi]

GTAIV in the UK costs 39.99 pounds, which is about $80 as I'm sure you know, so you can see how we get shafted over here. I read somewhere on launch day Rockstar had 6 million preorders to satisfy, so I'm confident with the worldwide release that they're already in the profit zone quite comfortably!

But they'll be even more comfortably in it when they release the PC version later in the year :thumbs:

 

[[Matt]]

Does GTA IV really cost only like $50 in the States? Here in Finland (and I'd imagine throughout Europe) new xbox360/ps3 titles cost like 70 euros each. Just saw an ad for GTA IV for 69.90e. That's like 110 USD or so. Perhaps they're counting on overseas sales to cover up the development costs

Thanks to current economics the exchange rate eats up most of the profit margin of $/? or $/? transactions as the dollar is has been weak against both the euro and pound sterling for several years. However im sure that we still get shafted to a degree with a slightly higher profit margin compared to America...

 

[Kadayi]

Thanks to current economics the exchange rate eats up most of the profit margin of $/? or $/? transactions as the dollar is has been weak against both the euro and pound sterling for several years. However im sure that we still get shafted to a degree with a slightly higher profit margin compared to America...

The ass ****ing of Europe by US software companies as a means to subsidize US releases has been going on for quite some time. Microsoft infamously did it with Vista, and Adobe did it with Creative Suite 3. General corporate excuses range from 'localisation issues' 'shipping costs' or vaguely xenophobic comments regarding 'piracy' (you can't trust foreigners) as a means to justify what have in recent years with the decline of the dollar amounted to 200% markups on European versions of US software. :dozey: