Who pays who?

Discussion in 'General Gaming' started by Mod-Chip, Apr 24, 2008.

  1. Mod-Chip

    Mod-Chip Rookie

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    Do console makers (i.e. Sony, Microsoft, Nintendo) pay video-game developers to make games or do the developers of video games pay the console makers a percentage of every game they sell?


    -BBK
     
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  2. Rainemaida

    Rainemaida Veteran

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    Misc?

    I have no clue.
     
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  3. Rekkie7

    Rekkie7 Rookie

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    I assume we're talking 3rd party here..so lets use GTAIV as an example.

    Rockstar is the publisher
    Rockstar North is the developer
    Sony & Microsoft own the consoles

    Rockstar North make the game using Rockstars money. Rockstar North uses that money to pay for staff, rent, computers, software etc. Rockstar then takes the finished game and mass produces it themselves. Rockstar will then sell that game to EB for say $25 each. $5 of that will go straight to Sony or Microsoft. The rest goes straight back to Rockstar to recoup the costs, and then make a profit. Rockstar North won't really see any of those profits, but they will likely get paid more for their next game if this one does well.

    So no, Sony, Nintendo or Microsoft don't pay people to games for their system. They take a profit. Sometimes they will pay money to have a game come exclusive, or at least time exclusive. This wouldn't be more then they expect to get back from their $5 per copy profits, unless they expect it to help sell their system that they will get more money from all the other games.

    Ofcourse with first party games, like say Mario or Zelda with Nintendo it's all within one company so the lines are blurred.

    It's why the console makers are willing to sell the consoles at a loss at launch, because they want to make back their profits with game sales. If they are making a profit on the console sale itself then that's just a bonus.
     
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  4. used44

    used44 Forum Moderator
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    Off to Gen!
     
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  5. UrbanMasque

    UrbanMasque Everyone Wears a Mask

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    informative, but i think you missed the question. and i disagree with that second paragraph. [ but you PROBABLY know more about this than I do]

    if im not mistaken - a developer makes a game w/ its own money then markets it to the Consoles. [ or a console may give a developer money to create a game - with the sole purpose of having that game only produced for THAT system... ie HALO - microsoft] Or the developers sell the game they created to the consoles, and the consoles then mass produce [or use 3rd party]- and any profit made there on out belongs to Console... small portion going back to developers.
    Which is why i always wondered why Consoles don't spend the extra money to monopolize a game and have it created solely for their system, since games directly impact the sale of consoles.
    :roll:
     
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  6. Rekkie7

    Rekkie7 Rookie

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    Your model applies to when the console maker, ie Microsoft publish the game themselves. Microsoft, Sony and Nintendo all publish games made by other teams, in which case they do get the profit share...but also the risk. Note this isn't the same as a first party game, where the system, publisher and developer are one company...this is just system and publisher. First party games have all the money handled internal obviously.

    But if say EA is the publisher, Sony doesn't give them anything except for the tools. EA handles the money and profits, and gives Sony a small share as a fee. The only time that Sony would give EA money is if it was to delay the 360 version of a game by making it PS3 exclusive for a time. Sony's reasons for this would be they would think the money they spend will be recouped in extra PS3 sales, which means more software sales and therefore more money in the longrun but they certainly don't give enough money to fund the game.
     
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  7. The_Big_Cheese

    The_Big_Cheese Regular

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    Just a note to add, console makers do pay the publishers to create games that will be exclusive to their console.
     
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