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posted by malloc at 03:50 pm on 2007-09-24 |
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Halo 3 to sell 10 million copies, generate $700 million revenues, cost $30 million to dev
Analysts have been discussing just how much cash Halo 3 will bring in for MS. Lazard Capital Markets expects that Halo 3 will sell as many as 10 million copies worldwide generating $700 million worth of sales and with MS getting 80% or $560 million. Another analyst notes that Halo 3 is looking at over a half a billion dollar profit and a margin of upwards of 90%. Prior to this Michael Patcher estimated that the total cost for Halo 3 will reach a little more than $60 million, consisting of $30 million for development and the rest spent on advertising and bonuses which could further tise the total expenditure. With all that said, it is on track to make huge profits.
quote:
The total cost to Microsoft for "Halo 3": a little more than $60 million. Development costs will probably be just above $30 million, given an elite team of 300 full-time artists and programmers working for three years on the game at Bungie, the internal Microsoft studio that created the games, said Michael Pachter, an analyst at Wedbush Morgan Securities. Bonuses to key developers and artists will probably add $25 million to the tab, Pachter said. Though about $15 million to $20 million in television marketing will be spent promoting the game, the majority will be footed by marketing partners such as Pepsi, Burger King and Pontiac that want to ride the "Halo 3" hype.
Master Chief's take-home pay isn't expected to be as lucrative. The game may sell as many as 10 million copies at an average retail price of $70 for a total of $700 million in sales, said Colin Sebastian, an analyst with Lazard Capital Markets. Of that, Microsoft will get about 80%, or $560 million.
The revenue potential for "Halo 3" is constrained by its narrow fan base -- young males. Though Microsoft is trying to make the game more accessible to other types of players, Halo's audience is "hard-core geeks who are into mature content," said Jesse Alexander, executive producer for the "Alias" and "Heroes" TV series and a "Halo" aficionado. "It reaches a very specific market. And that's OK. But it's just not the same audience as the movie and TV business."
Where Master Chief will probably score a decisive hit is profit margin. Although "Spider-Man 3" will generate an estimated $628 million in pretax profit for a 46% margin, according to SNL Kagan, "Halo 3" is looking at a profit of more than half a billion dollars and a margin of upward of 90%.
News Source: latimes
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