AAA studios are making piracy even stronger!

The game that you purchase have a price. The price actually has a lot of insights if you can see it.

Lets assume that you purchased a game that's like 50 bucks. Now we'll need to break the 50 bucks and count how much margins do they have...

Okay so from $50 steam or any such distribution will take 30% which will give the studio $35. Now lets assume that they have 100 developers and the average salary right now is $100,000. Lets assume that 1 million copies are sold. So now 10% (of $50) will be for developers on each sale. Which will leave the studio with 30$ on that purchase.

Now from this $30 bucks you have to count all the other expenses such as electricity, computers provided by the company, rent for the office space, we haven't counted the super salaries of the top executives but why make everything so complex so just we'll take 15% (of 50$) off to count for all the other expenses that go into the business.

Now the studio is left with $22.5 . Okay not bad. What about the customer acquisition cost and marketing spend?

You might think that it might not be that bad right?? well you know what??? You are wrong!!! AAA studios can spend anywhere from $50 million to $200 millions just for marketing. If we count this than the game we are assuming here will be loss to the studio.

And the most AAA games nowadays are performing just like this. They don't make so much profits for the studios. This is where the studios decide that they will sell more but for doing that they have to some how not let anyone pirate the game.

That's where they start paying for DRMs (Direct Rights Management Software). The most effective one in the market is Denuvo and it costs around $25,000 a month which is $300,000 a year. This is not that much for studio as we have seen how much they spend on other stuff. But this is what matters the most for the gamers.

Some gamers have speculated that Denuvo causes some levels of performance drop. Now we don't know if that is the case but we do know that because of this a lot of gamers prefer to download cracked repacks for better performance instead of buying the original.

But that's not it. The cost of the game is actually too high and unreasonable for countries other than the U.S. Because households don't produce so much income to spend this much on games. They do have the hardware because of studies or work but they don't have the income to pay for games.

They won't pay no matter how many DRMs you push and that's a sad reality. Only if they could have access to games by paying less you could possibly get millions of people to play games and generate profit not buy pricing the game high but by pricing the game low and selling to more people.

But that actually don't work... Something has to change fundamentally from the creation of games to distribution of games. I have discussed this in a previous blog you could read that which is in the related blogs...

OVER N OUT,

Harsh Solanki ( CEO & FOUNDER @ VZEYA)