70% of games never recover costs, says Deering

By Patrick Garratt
11 August 2008 17:23 GMT

Speaking at the Edinburgh Interactive Festival today, ex-SCEE man Chris Deering claimed that on 30 percent of games ever made the development money back.

“Traditional revenue sources will not be sufficient to fund games development,” he said. “If you look at the very narrow definition of the gaming market, people are saying the software business will be down 20 percent by 2011 versus this year.

“Something is going to have to be there to make up the difference and take us beyond that threshold.

“My guess and analysis shows that less than three out of 10 games recover their development and marketing costs with boxed goods sales. So what’s going to have to happen? Creative use of hybrid online and offline advertising revenues, online offline transactions with consumers – these business models must be explored.”

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