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AAA iPhone games more profitable than AAA Xbox/PlayStation games

Tim Sweeney, Epic Games (owners of Unreal Engine, and deelopers of AAA games on 360/PS3/iOS):

“The most profitable game we’ve ever made, in terms of man years invested versus revenue, is actually Infinity Blade. It’s more profitable than Gears of War.”

Touch Arcade has some terrible analysis (don’t listen to a word of it), but I quite liked their summary:

“Just let that sink in for a minute. Infinity Blade, an iOS exclusive title that has been priced anywhere between $5.99 and 99¢ over the years, is more profitable than a $60 AAA title that enjoyed all the glitz and glamor that comes along side a multi-million dollar game launch marketing blitz. We’re talking major network TV commercials, prime shelf space in nationwide retailers like Wal-Mart, and everything else …and Infinity Blade wins.”

…although *ouch* at that last 4 words, where they show some stunning foolishness. Console games make *more overall profit* than iOS games – Tim’s words clearly only covered the profit *margin* – making it very stupid to say “Infinity Blade wins”.

And we have to factor in (again, GAH! TouchArcade … do you really have so little idea what goes on in your own area of news?) that InfinityBlade *did indeed* get major TV exposure etc – it’s just that Epic didn’t provide it, Apple did.

What we really want to know is … what’s the ratio of profit margins between the two games – Gears of War 1/2 (their premier console AAA title), and Infiity Blade 1/2 (their premier iOS AAA title)?

My pure guess is that it’s a fairly small multiple – maybe only 1.2 x margin – so that if you have a LOT of money to invest, console is still a good target. Meanwhile, Epic will use this as justification that “everyone should license Unreal Engine v4 – because otherwise your dev costs are too high on console, compared to other platforms”

(as I hope we all realise … Epic stopped being “an independent game developer” many years ago; Epic in the 21st century is “a middleware company, that sometimes makes games on the side”)

3 replies on “AAA iPhone games more profitable than AAA Xbox/PlayStation games”

He actually did not say “profit margin”, but rather “profitable game we’ve ever made, in terms of man years invested versus revenue”. It looks like he took total project revenue and divided by man years — which I suppose a time-weighted profit margin.

The important point here is that to Epic, man hours spent on iOS are more valuable than man hours on console — to the developer. Microsoft takes a hefty revenue share for publishing those console games, as do the retailers — costs that are significantly lower than the App Store 30%.

That being said, there is MUCH more risk to Epic in making those iOS games than the console games (since MS likely paid them their dev budget + some margin). It is also not clear whether it is as scalable for more dollars invested (as you hint at).

Unless they pay substantially different salaries for different platforms (which would be strange), man years is the direct cost of a game project.

AFAIAA, MS didn’t pay for Gears of War, Epic paid for it. But in both cases (IB and GoW), the “costs” reported by Epic were hugely less than the true costs, because Epic’s “creative accounting department” treats the cost of Unreal Engine as $0. Which is absurd, but that’s how they do it :)

I recently went for an interview at a UK games company that I shall defer naming! Anyway they had fairly successful XBLA game, AA – if not AAA – production quality basically really shooting to see what they could manage.

They then decided to port it to iOS, strip it down to a single game mode that would work nicely with touch controls etc. They’ve sold over 21 million copies on iOS and apparently made more per-day than they made over the entire lifetime of the XBLA release.

Obviously as the iOS game was a port it cost less “to make” but they weren’t talking about the final profits, just the number of copies sold. Even ignoring the cost of development at £5.99 it’s made iOS more profitable than XBLA by a huge amount so they’ve completely stopped doing console games now.

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