Analyst: Only 4% of Games are Profitable

By Blake Ellison, Nov 21, 2008 5:45pm PST Geoffrey Zatkin, president of research firm Electronic Entertainment Design and Research, estimates that just 4% of all released games actually return profits for publishers.

Speaking to Forbes, Zatkin showed that there is truth in numbers. In fact, numbers are EEDAR's specialty. The firm maintains a database of over 6,000 games catalogued by genre, features and sales figures.

That data is used to create models that estimate how well a game will sell based on the way the game is pitched. EEDAR's sells its services to publishers including Electronic Arts, Activision, and Ubisoft.

Zatkin, a former game designer, co-founded EEDAR after experiencing first-hand the stress of making major decisions early in the game design process. "Every game I have ever worked on, we've gone in blind as to which features would sell the game better," he said.

As a result, EEDAR offers an answer to that question based on games that have already come to market. For example, not knowing whether adding a multiplayer mode to a game would financially be worth the expense "would scare the crap out of me," Zatkin commented.

Forbes took EEDAR's system for a spin with a hypothetical game called FutureNot, which would be "a mature stealth-action game with a dash of role-playing elements" developed by Ubisoft Montreal and released in October 2010. The number-cruncher determined that the game could sell 216,000 copies in six months for the Xbox 360 and an additional 192,256 copies for the PS3, making the game a solid success.

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