Namco Bandai president Takeo Takasu has said that PS3 games developed by the company need to sell 500,000 copies before they turn a profit. Graphic development costs alone more than double those required for the Nintendo Wii.
"We have to sell at least 500,000 copies per title worldwide to make a profit on PlayStation 3 games," said Takasu. According to the Namco Bandai president, it costs $8.6 million just to create the graphics for PS3 games, more than double the Wii's development costs.
With such a high number of sales required to make money on PS3 game development, there are growing concerns that publishers will take a step back until PS3 consoles are more established in the market. "Game makers may hesitate to make games for a console if its shipment is being delayed," said Yuuki Sakurai, who helps manage $6.02 billion at Fukoku Mutual Life Insurance Co. in Tokyo. "Some game makers may wait until a console becomes popular because of increasing production costs."
While Sony continues to shoot for 1 million PS3's shipped by the end of the year, EA president Larry Probst believes the console maker will only manage 500,000 to 800,000 units. With low initial tie-in ratios, it may be some time before publishers feel confident about releasing big budget games exclusively for the system.
Source: Bloomberg Japan