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Marketing costs of games

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Anonymous
April 2, 2005 10:44:49 PM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

According to the below article about the new Splinter Cell game
Ubisoft spent ten million to develop the game then they dropped
another ten million to market the game. It seems a bit excessive to me
to spend that much marketing a game for a series that is so well known
that it practically sells itself. First Ubisoft have gotten in the
habit of wasting money on Starforce protecting their new games and now
they are spending ten mil to market a game that cost ten mil to make.
Give me some of what the suits at Ubisoft are on.

http://www.canada.com/technology/story.html?id=d6fb3605...

More about : marketing costs games

Anonymous
April 3, 2005 5:01:43 AM

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On Sat, 02 Apr 2005 18:44:49 -0800, Redmond du Barrymond
<redmond@STUFFIT.invalid> wrote:

>According to the below article about the new Splinter Cell game
>Ubisoft spent ten million to develop the game then they dropped
>another ten million to market the game. It seems a bit excessive to me
>to spend that much marketing a game for a series that is so well known
>that it practically sells itself.

The marketing may seem excessive... but it may also be required. Putting a
lot of advertising into a flagship product may cause sales to spill over
into other Ubisoft games under the "Wow, that game's good - what else did
the developors make" factor.

Of course, this will only work if the game is really good.

>First Ubisoft have gotten in the
>habit of wasting money on Starforce protecting their new games and now
>they are spending ten mil to market a game that cost ten mil to make.

Ubisoft uses the copyprotection to maximize the first-day sales, which
normally rake in the greatest money per unit. (This keeps the retailers
happy enough to purchase additional copies.)

The ten million dollars in advertising means that they are attempting to do
something nationwide, rather than focusing on Internet ads or a
website/fanbase. They are aiming to get as many new customers as possible.
Anonymous
April 3, 2005 2:11:49 PM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

On Sun, 03 Apr 2005 00:01:43 -0500, bk039@ncf.ca (Raymond Martineau)
wrote:


>The ten million dollars in advertising means that they are attempting to do
>something nationwide, rather than focusing on Internet ads or a
>website/fanbase. They are aiming to get as many new customers as possible.
>

Yes, that all sounds good in theory but in practice it's just the
suits making more bad decisions. Copy protection like Starforce loses
customers. How does putting Starforce on the disk increase the first
day of sales? Teens who pirate had no intention of buying the game in
the first place. "Oh, it's got Starforce, better go buy it instead".
No, it doesn't work that way even if Ubisoft thinks it does. And
spending ten mil on marketing a game that you spent ten mil making is
just idiotic.
Related resources
Anonymous
April 4, 2005 3:27:59 AM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

On Sat, 02 Apr 2005 18:44:49 -0800, Redmond du Barrymond
<redmond@STUFFIT.invalid> wrote:

>According to the below article about the new Splinter Cell game
>Ubisoft spent ten million to develop the game then they dropped
>another ten million to market the game. It seems a bit excessive to me
>to spend that much marketing a game for a series that is so well known
>that it practically sells itself. First Ubisoft have gotten in the
>habit of wasting money on Starforce protecting their new games and now
>they are spending ten mil to market a game that cost ten mil to make.
>Give me some of what the suits at Ubisoft are on.
>
>http://www.canada.com/technology/story.html?id=d6fb3605...


Is there any place to see listing of computer games which report
developement cost - marketing - profit?

As to dropping 10mil, the ad suits must have some knowledge of cost in
ad vs expected return in profits.
Anonymous
April 4, 2005 3:28:00 AM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

On Sun, 03 Apr 2005 23:27:59 GMT, OldDog <OldDog@city.pound.com>
wrote:



>As to dropping 10mil, the ad suits must have some knowledge of cost in
>ad vs expected return in profits.

Since when are the suits ever right about anything? They are a
clueless bunch of beancounters. I bet they could have spent nine mil
less and still had the same profits.
Anonymous
April 4, 2005 6:25:25 AM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

Thusly Redmond du Barrymond <redmond@STUFFIT.invalid> Spake Unto All:

>Copy protection like Starforce loses
>customers.

No, it doesn't. Because it's secret. Hardly anyone knows they're
infected by starforce. They'll think the software which suddenly
starts crashing (like Nero and Daemon Tools) is buggy instead.

If starforce actually notified the user of its existence and what it
does, THEN it would lead to a loss of sales. Which is exactly why it
doesn't.

> How does putting Starforce on the disk increase the first
>day of sales?

It doesn't do that either. Making sure review/print copies of the game
don't get into pirate hands has bigger effect.
Anonymous
April 4, 2005 6:25:26 AM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

On Mon, 04 Apr 2005 02:25:25 +0200, Mean_Chlorine
<mike_noren2002@NOSPAMyahoo.co.uk> wrote:


>No, it doesn't. Because it's secret.

It's not a secret to me and many others.
Anonymous
April 4, 2005 7:45:32 AM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

Redmond du Barrymond wrote:
> On Sun, 03 Apr 2005 23:27:59 GMT, OldDog <OldDog@city.pound.com>
> wrote:
>
>
>
> >As to dropping 10mil, the ad suits must have some knowledge of cost
in
> >ad vs expected return in profits.
>
> Since when are the suits ever right about anything? They are a
> clueless bunch of beancounters. I bet they could have spent nine mil
> less and still had the same profits.

Which is probably why they spent $10m. Same profits as your $1m
version, but the turnover is almost twice as high. Their company is 2
times bigger than yours and will be able to get much better credit
rates, bargaining power etc.

In the games sales charts, they've shifted almost twice as many units
as you.

That is why they are "a clueless bunch of beancounters" and you are a
poster on Usenet.
Anonymous
April 4, 2005 10:05:34 AM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

On Sun, 03 Apr 2005 23:27:59 GMT, OldDog <OldDog@city.pound.com>
wrote:

>As to dropping 10mil, the ad suits must have some knowledge of cost in
>ad vs expected return in profits.

Actually, what the suits know is that they have to look like they're
doing something useful, or else they'll be out of a job. And since
they don't know how to make video games...
Anonymous
April 4, 2005 2:55:29 PM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

Thusly Redmond du Barrymond <redmond@STUFFIT.invalid> Spake Unto All:

>>No, it doesn't. Because it's secret.
>
>It's not a secret to me and many others.

And I knew about it too. Amazing.

Would you say most people who buy the games, do?
Or 1% of them?
Do you know how to check if the starforce trojan is still in your
computer?
Anonymous
April 4, 2005 4:22:13 PM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

On Mon, 04 Apr 2005 10:55:29 +0200, Mean_Chlorine
<mike_noren2002@NOSPAMyahoo.co.uk> wrote:


>And I knew about it too. Amazing.

Wow! That makes two of us. I think most/all gamers have internent
access and know what the scoop is.

>Would you say most people who buy the games, do?
>Or 1% of them?

Closer to 100% but maybe only 98.5%.

>Do you know how to check if the starforce trojan is still in your
>computer?

Yes, and I know how to get rid of it too. I've known about Starforce
for a long time because I happened to buy one of the first games to
contain it. Enigma: Rising Tide.
Anonymous
April 4, 2005 4:24:01 PM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

On 4 Apr 2005 03:45:32 -0700, "Chadwick" <chadwick110@hotmail.com>
wrote:


>Which is probably why they spent $10m. Same profits as your $1m
>version, but the turnover is almost twice as high. Their company is 2
>times bigger than yours and will be able to get much better credit
>rates, bargaining power etc.
>
>In the games sales charts, they've shifted almost twice as many units
>as you.
>
>That is why they are "a clueless bunch of beancounters" and you are a
>poster on Usenet.

Yea, but the dumbasses have already spent most of their profits on
marketing. Sheer genius, eh, wot?
Anonymous
April 4, 2005 4:25:27 PM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

On Mon, 04 Apr 2005 06:05:34 GMT, drocket <drocket@hotmail.com> wrote:


>Actually, what the suits know is that they have to look like they're
>doing something useful, or else they'll be out of a job. And since
>they don't know how to make video games...

Now there's a man who knows the truth.
Anonymous
April 5, 2005 5:44:03 AM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

Redmond du Barrymond wrote:
> On 4 Apr 2005 03:45:32 -0700, "Chadwick" <chadwick110@hotmail.com>
> wrote:
>
>
> >Which is probably why they spent $10m. Same profits as your $1m
> >version, but the turnover is almost twice as high. Their company is
2
> >times bigger than yours and will be able to get much better credit
> >rates, bargaining power etc.
> >
> >In the games sales charts, they've shifted almost twice as many
units
> >as you.
> >
> >That is why they are "a clueless bunch of beancounters" and you are
a
> >poster on Usenet.
>
> Yea, but the dumbasses have already spent most of their profits on
> marketing. Sheer genius, eh, wot?

You miss my point. You said they could have made the same profit by
only spending £1m on marketing. But by spending $10m on marketing they
(almost) double their sales and keep the same profits. They are not
spending the profit on marketing, it is still clear profit. This works
whether you define the profit in absolute or percentage terms.

The moot point, which I think is what you were trying to get at, is
whether or not they really will double their sales. Will the extra $9m
marketing spend generate enough extra sales to maintain the profit that
$1m would have got? You obviously think not, but the bean-counters
think they will do.

I suspect that the clueless ones will have better marketing and sales
forecasts than you, and certainly a better understanding of management
accounting, but you never know - they're still trying to guess the
future, so could have got it wrong.
Anonymous
April 5, 2005 6:55:40 AM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

On 5 Apr 2005 01:44:03 -0700, "Chadwick" <chadwick110@hotmail.com>
wrote:


> But by spending $10m on marketing they
>(almost) double their sales and keep the same profits.

That's only a theory. Splinter Cell 3 sells itself practically due to
the past two games stellar reviews and recognition. There is no need
to spend that much money marketing it. Did Star Wars episode three
need a blitz campaign to get people to go see it?
Anonymous
April 5, 2005 7:22:51 AM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

Aldwyn Edain wrote:
> On 5 Apr 2005 01:44:03 -0700, "Chadwick" <chadwick110@hotmail.com>
> wrote:
>
>
> > But by spending $10m on marketing they
> >(almost) double their sales and keep the same profits.
>
> That's only a theory. Splinter Cell 3 sells itself practically due
to
> the past two games stellar reviews and recognition. There is no need
> to spend that much money marketing it. Did Star Wars episode three
> need a blitz campaign to get people to go see it?

No it's not a theory. Do the maths. To spend nearly twice as much on
development, production and marketing etc, and still keep the same
profits, you must sell nearly twice as many units.

That was the assertion: that you could get the same profits whether you
spent $1m or $10m on marketing. If the profits are going to be the
same, then I would spend $10m, because my sales and turnover will be so
much higher.
Anonymous
April 5, 2005 7:05:06 PM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

On 5 Apr 2005 03:22:51 -0700, "Chadwick" <chadwick110@hotmail.com>
wrote:


>That was the assertion: that you could get the same profits whether you
>spent $1m or $10m on marketing. If the profits are going to be the
>same, then I would spend $10m, because my sales and turnover will be so
>much higher.

That is not a guarantee! That is a calculated risk that can easily
backfire on you. My model is far less risky. Here's an even better
model to guearantee the same profits. Sell the game at 50% the price
of most other games. Bulk selling at a lower price garners the same
profits as selling less at a higher price. Often more profits.
Anonymous
April 6, 2005 6:02:18 AM

Archived from groups: comp.sys.ibm.pc.games.action (More info?)

Aldwyn Edain wrote:
> On 5 Apr 2005 03:22:51 -0700, "Chadwick" <chadwick110@hotmail.com>
> wrote:
>
>
> >That was the assertion: that you could get the same profits whether
you
> >spent $1m or $10m on marketing. If the profits are going to be the
> >same, then I would spend $10m, because my sales and turnover will be
so
> >much higher.
>
> That is not a guarantee! That is a calculated risk that can easily
> backfire on you. My model is far less risky. Here's an even better
> model to guearantee the same profits. Sell the game at 50% the price
> of most other games. Bulk selling at a lower price garners the same
> profits as selling less at a higher price. Often more profits.

The situation was "I bet they could have spent nine mil less and still
had the same profits." I had to assume the profits were guaranteed and
the rest is just basic maths.

If you are now guaranteeing my profits will be the same, whether the
game is sold at 100% or 50% of "normal" retail price, then I will sell
at 50% because the revenue will be the same in both cases (it has to be
in order to generate the profit), but the number of units sold will
double if they are being sold at 50%.

This discussion will probably continue in this pointless vein until
someone points out that you cannot guarantee profits. Commerce is built
around the balance of risk and reward that is development costs vs
revenue and profit. We can control the cost of sale, but we cannot
control incoming revenue from sales. We can influence sales, but not
guarantee them (except in certain very specific situations, not
applicable to the general retail market).

What I think you and Redmond are tyring to argue is that there are less
risky ways of trying to get the desired profit margin. Instead of
exposing yourself to an additional $10m risk (the marketing spend),
Redmond suggests spending just $1m because you need to sell fewer units
to recover this cost and make an acceptable level of profit. As you
then argued, the game might "sell itself" and make a much greater
profit.

Your alternative solution is to halve the retail price to encourage
more purchases. The danger with this is that you need to sell double
the amount of units. I think you would need clever marketing to avoid
the game being seen as a budget title. There is a marketing concept
best illustrated by Stella Artoi's old slogan: "reassuring expensive".
More simply, you get what you pay for. When comparing two similar
products, people tend to believe that the more expensive product is
somehow better quality. It's not always true, but the perception
exists, and in marketing, perception is everything. ou may recall that
HL2 was sold at top price for a game. Would it have sold better if they
knocked $5 off? Or did the high price pass on a message that this was a
quality game? You also have very little room for further discounts to
push sales later in the product's life.

Dragging this discussion back on topic, the argument is whether Ubisoft
needed to spend $10m on marketing the new Splinter Cell game. Would the
game have sold itself just because of it's name and heritage? Would
word of mouth have been sufficient? Were ubisoft trying to attract a
new group of purchasers who weren't familiar with (or aware of) the
previous games in the series, and who wouldn't necessarily receive word
of mouth? Perhaps they knew the game would sell like hot cakes, and
figured they could afford to spend some money on general publicity (as
Raymond suggests)?

Whatever we think of their budget, would bisoft really throgh $10m away
on a whim, or would they want to see how that money will be recovered?
I suspect they will want to see budgets and forecasts first, and only
sign the cheque when they are satisfied they are going to see their
money conme back with interest.
!