Discussion from "VF5R for console effort" thread

That's some fancy shootin thar Tex

I see what U mean that the profit generated from selling 500,000
copies of VF could potentially be the same as the profit from
selling a big buget 2.5 million copies game. I agree. But the visibility of selling 2.5 million is very different from the visibility of selling 500,000. The gross sales on
2.5 million (given $50 per game) is $125,000,000 and only
$25,000,000 on 500,000 copies. Even though a may have cost more to make the $125,000,000, it makes a bigger statement to retailers, advertisers, game reviewers, etc. That's why
call of duty Modern Warfare 2 is getting all the hype right now.

No One really talks about how profitable MW2 is they just talk about how many millions of units have been sold. For all we know for every unit sold the publisher could be loosing money. but it doesn't matter in the court of public opinion. Everybody is still running out to buy the game

 

Well, that's the way the media spins it, because they're more interested in talking about games that have reached a larger number of people. It's just the nature of their business. "Virtua Fighter 5R exceptionally profitable over long term!" just isn't quite as eye catching as "Modern Warfare 2 sells one million copies on launch day!". But you know, there is something to be said for a company that can successfully market a product to a niche audience over the long term. If Sega is making money hand over fist, who cares what the media has to say?

Now there are some companies that get so caught up in their negative public perception, they will literally absorb any amount of short term loss they can afford to turn it around. They are more concerned about their potential to be making money in the future, than with how much money they are making in the present. This is the type of management philosophy that can cause a company worth billions to go bankrupt overnight. But this is the way almost every company in the video game business thinks. It's hard not to when a single poorly selling game could ruin the company.

So, I guess it's up to Sega. Do they want to be the kind of company that successfully markets niche games? Or do they want to be the kind of company that has to sell a million copies of every game they make to avoid bankruptcy. Not a tough call in my book, and hopefully not in theirs either.

 

If VF5r would be so profitable, why hasn't Sega released it thus far? They seem to be releasing just about every other game. You speak like you sit in at the board meetings at SOJ.

"Virtua Fighter 5R exceptionally profitable over long term!" You know this because?????

This makes very little sense. What does afterburner climax have to do with a ten year old VOOT? Thats just like saying, golden axe wont sell because moonwalker didnt. LMFAO
btw, VOOT was the top selling xbox live game in japan for the whole year.

 

I don't, and I was just using that hypothetical quote as an example. But one thing is certain. Based on the available evidence, 5R pretty much has to cost substantially less to develop than a game developed from scratch. If it doesn't, there's something seriously wrong with Sega's development process. Given that, unless you can name some other major expense involved not related to publishing or marketing, we have to assume Sega could make a nice profit on 5R by selling 500,000 copies. And based on the series' past performance, it's not unreasonable to expect they could sell that many, if not more. It's true, I don't know the finer details of how Sega operates. But I don't know of any possible way they could operate that would make not releasing 5R on consoles a smart business move.

 

How about the opportunity cost of losing arcade players plus direct control over all copies of the game?

Sega thinks that releasing the game for consoles will immediately mean a direct loss of arcade players. They fear that arcade players in Japan will leave the 'pay per play' VF5R machines for the unlimited access of console VF5R. It was this irrational and delusional fear that prompted them to release PS3 VF5 with no online mode. It's what also kept Tekken 6 and BR off consoles for so long as well (again Namco copying AM2, but this time for worse).

What's funny is that 3S and ST have (illegal) free online home ports (based on arcade emulators and roms). Yet despite having those free ways to play the game, 3S is still one of the most popular Japanese arcade games, and ST keeps an extremely active (and now growing) arcade community in Japan. So the fear of losing arcade players to a console port is totally unfounded and there is no proof that console ports hurt arcades (at least in Japan).

Sega has a strong base, a legion, of dedicated VF5R arcade players in Japan. VF5R is still one of the most popular arcade games in Japan and Sega controls every machine with their leasing strategy. They see porting 5R as a risk, as unnecessary, as something that is pointless. They make enough money off of 5R in Japanese arcades that they don't need to port the game to consoles.

 

You've created a completely impossible situation by deciding to take out publishing and marketing costs. That's like saying I could make a nice profit by selling a book about VF if I didn't care about publishing and marketing costs.

 

Did you read my earlier posts? The reason I said to name an expense besides publishing and marketing is because it is already being assumed the game is profitable at 500,000 units sold even with those costs taken into account. Therefore, you would have to name a different cost involved to make the assertion that it wouldn't be.

Well if that's true, it only applies as long as Virtua Fighter 5R is popular in Japanese arcades. Are you saying that as soon as it isn't, Sega will go ahead and release it on consoles? Actually, I thought from the begging this would be the case. But given the fact 5R's arcade run is starting to wind down and there's still no console port in the pipeline, I've developed serious doubts. I assume that pretty much everyone else here supporting the petition effort is on the same wavelength.

 

Read Again: You've created a completely impossible situation. It's absurd to build in publishing and marketing costs and "assume" the game is profitable at 500,000 units. You don't know the marketing cost and neither do I. It's worthless to say "assume" as I'm sure there is a department of Sega Japan that has been put together simply for the purpose of performing these types of analysis.

Publishers of books, software, games etc. face two gigantic risks aside of development and pure marketing costs.

First off there is a monster royalty issue. Everytime Sega America, or a regional division of Sega presses one disk of a game, a royalty is paid back to Sega Japan. These divisions are in fact separate entities under the same holding company for accounting purposes. Sega America will not recommend/pay royalty/support something they do not think they can move quickly and efficiently. Jobs are on the hook.

The second is the inventory/stocking risk. To sell 500,000 units of a game you would press out a larger number of units of the game and stock them with your distribution channel. Since games don't sell on consignment with retailers, Sega must also convince their channels to carry a title. Retailers will pick up the game from the distributor for 80% of the retail cost. If the retailer can't move the game they take a write down and get pissed at the distributor for losing 80% or whatever they had agreed to for unsold product. The distributor returns the unsold stock from the retailer + warehoused stock to Sega and asks Sega for reimbursement on returned product. Sega America takes a write down for returned product, which trickles down to Sega Japan. It's a complex relationship that Sega has to balance. Sega does not want to piss off their distributors or retailers. How does Sega convince the distributor and retailer to stock an update to an old game? The partial answer is obviously a huge marketing budget. It's not just some magic of Sega waving their hands to say, I'm going to give you a game and you have to sell it. Screw up and Sega will pay more money to the distributor next time to get their games front and center with retailers. That's a significant cost and no company normally takes that kind of risk without loads of cash from a nicely padded balance sheet. Please read my first sentence again and ask yourself if you think you're any better than a department within Sega.

 

There are other considerations beyond just profit as well.

I've been and am currently involved in serious software development projects. It can take a medium size team several years to bring a new product to completion (depending on scope)

I know that Sega-AM2 wouldn't have to start from scratch with 5R, but what if they are working on other projects? Those projects have schedules and manpower requirements. You can't just yank your developers off schedule to produce a low selling re-run. (even if the profit is nice) the volume is low, in comparison to some of the new releases these days.

The more I listen to arguments for-and-against sega porting 5R to consoles, the more fortunate I feel for having Virtua Fighter 5 now on the PS3 (even without online and the new characters). Its still the best looking, best sounding, best feeling fighting game on the planet (even though it was release long b4 Tekken 6 and Soul Calibur 4 and others) It represents the viceroy and hallmark of fighting games on next gen consoles.

I would like Sega to port 5R, but even if they can't, as long as they can give us a version of Virtua Fighter for the most current generation of gaming console at the time at the quality they've always done it, I'm going to be happy.

 

Pretty much Azuzabo made all the points I wanted to make especially the fact that it's an update. But this isn't a Sonic game or Left 4 Dead which sold Huge numbers this is Virtua Fighter..

Advertising isn't the end all of selling a game. There are tons of games that get very good promotion but miss their sale projections.

 

Just take a look on how Capcoms marketing works. Its cheap and effective.

 

Yah they did, twas quite a big advertising campaign too when you consider it's SEGA

 

Well there is one wacky way to look at it. If they don't spend any money on advertising and marketing, then they don't have to worry about recouping costs for advertising and marketing

Which means that each unit sold is more profitable. Of course you end up with less units sold, but maybe that's the plan

I think even if they market and advertise like crazy, sells for
VF would not go to the millions and millions. It seems like the fad for now are FPS games like modern warfare 2. Everybody's has jumped on that band wagon this year. And if its now MW2 its one of their close competitors. Assassin's Creed II is hot right now. Some how I just don't believe any fighter is going to reach the $14 million unit sold mark. Even as much as Tekken 6 was advertised and hyped it hasn't come close. And it has a reasonably recognizable brand name.

I see Tekken 6 T shirts at the UFC matches, and Tekken 6 commercials during UFC broadcasts. And UFC is extremely popular right now. Namco has used that popularity to market and advertise Tekken 6, But Tekken is not going to
put up McDonald's numbers like MW2 did. Even if Sega spent millions on Marketing VF it wouldn't take off like Assassin's Creed, MW2, or a Metal Gear. Fighting games are just not the fad right now. I do think they're turn as fad is coming though.

TBH as long as the box art and description is effective, VF has
a chance of getting bought just like any other game on the shelf. I spend my share of time at GameStop, EBGames, Bestbuy,etc in the PS3 section. Although some people know exactly what game they're looking for, others just browse through the games, checking them out, wondering should they buy it or not. In those circumstances VF has an equal chance, its own the shelves at most places I go to (even now), but the MW2 slots are almost empty, the UFC slots are almost empty, and the VF slot is not almost empty. Its just a fact of arcade style fighters right now.

 

http://www.vfdojo.net

there are about 200 people posted, have we inculed those in our current progress?

 

I really didn't expect that much interest, crazy.