Hold on there a second Pilgrim, I don't know where you shop, but I can buy every game to date, that comes out 2 days after release at Best buy here in Wisconsin for 40 dollars, no more, no less. SO prices have not generally shot up to the extent you think they have.
Second off, a lot of the prices you mentioned are pure speculation and don't actually show true profit margins. The profit for Production company's is HUGE where the profit for the actual developers is very small. That is why Black Isle went out of business. They had a huge fan base, but few people actually bought the game, and Interplay hosed black Isle for all the money they could. If 23 dollars is the end profit, 4 dollars of that goes to the developers, and 19 goes to the production business.
Developers in the end are always the one getting short sticked, but don't go spouting about how the margins are so small. They are not.
About MMO's, the profit margin for MMO's is Gigantic. A brand new DL 380 from Compaq fully loaded costs about 6,000. With OS and other operations, it could be around 10,000 fully loaded. That is a Enterprise server rated for 3 years of full on site in 4 hour repair. Now take one Network engineer to monitor it, and keep it running with say around 20 other servers for him alone. For a decent administrator lets say a salary of 50,000 dollars. Now lets talk internet lines, Depending on who you are dealing with, lets say you want 100,000 subscribers. that comes to 20,000 online at any given time. 20,000 subscribers at 7 KB/s down and 4 KB/s up. so I pay for 25,000 * 7 down just to be safe. That is 175,000 KB/s down which is 175 MB down. Theoretically you would not need that, but for the heck of it, lets say you want that much. SO you get three OC-192 lines, capable of 77.75 MB/s of pure download and upload heaven. That comes out to 24,000 a month for that.
Lets add our costs up
Intetnet - 24,000 dollars a month
personal - 4200 dollars a month
servers - 20 *10,000 one time initial cost - 200,000
total - 228,200 dollars and 28,200 a month after that, for a basic 100,000 subscriber game. THEORIES to principals here.
Money brought in a month - 12.95 * 100,000 = 1,295,000
They are making over one million dollars a MONTH in net profit before taxes and other issues.
100,000 subscribers is big, but most MMO's are starting to really grow in size as people start wanting to play them more.
Think about it a sec, seriously, EQ has over 430,000 active subscirbers, that is 5,568,500 dollars a MONTH. For that many subscribers, I would estimate monthly hardware and resource costs to be around 1.1 million dollars. Which means they have a net profit of over 4 million dollars a month. That is insane.
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2004-03-12, 12:15 PM
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