
Originally Posted by
Ichon
Some games make 2-3x as much from DLC. Of course that is a bit of playing with the numbers because many DLC features are impossible without work done on the underlying game.
Last I heard about 13% of the people who buy a game will also buy DLC which excludes f2p as no one 'buys' those and also excludes microtrans oriented casual games like CandyKrush. If Sega/CA sells 1 million Total War games they don't actually sell 1 million directly to customers- they sell a large amount of that 1 million to the distributors who sell to customers. Steam is a bit different as it is not exactly a normal distributor but almost like a market maker between publishers and customers facilitating sales and taking a cut. Steam's interests are both to generate revenue for publishers but also grow its user base and increase purchase velocity/total sales.
Anyway- figure if Sega/CA sells 1 million licenses for Total War most of the time the money that actually reaches Sega is going to be less than 20% of the sold price (-30% for Steam -CA development/marketing casts/-support and other costs). So roughly 12 million 'might' be profit. Of course since Warhammer is IP belonging to GW some part of that 12 million will go to GW. Depending on sales that 20% that Sega gets could go up or down 20% though their estimates would have to be WAY off to see more variance than that (IE they make nothing on base game vs 40% means 24 million 'profit').
Now let's say 13% or 130,000 people buy at least 1 DLC content pack (most DLC revenue is driven by about 1% of customers who spend avg 2x base cost of the game) sold at 14.99. Now if the base game development costs aren't included in the same accounting way that approx 2 million DLC revenue could have 50% reaching Sega or roughly 1 million or +8.3% profit margin. Now factor in 1% who buy 100% of DLC. About half at full price and the other half over time as DLC content prices decrease which for simplicity we'll say amounts to revenue of half what the dedicated fans spend. So 10,000 of the 1 million base game owners spend a bit over 1 million but since DLC is accounted differently 500,000 of that goes to Sega so now it is +12.4% margin.
The bigger the number of base game sales the larger the the number of DLC sales increases as 13% of 5 million is quite a bit more exponentially increasing Sega profit though it is important the base game is good enough to get 5 million sales so only so much content can be cut to sell as DLC. Where that line is though is constantly tested by all companies while the huge titles like Destiny which supposedly cost over 500 million aren't relying on DLC to increase profit margin- there DLC covers the base cost of the game and 100% of profits.
TW:WH has a far smaller budget than 500 million but considering average games costs 20 million in 2015 I wouldn't be surprised if TW:WH cost 25-30 million if not a bit more considering some CA employees are already working on content for titles 1 and 2. When I did very basic breakdown earlier of 100 employees at CA working on TW:WH for roughly 3 years the cost in salaries alone can easily exceed 15 million then add facilities, equipment, marketing, legal, etc which is often 25% of a production budget and we see the 20 million 2015 major game development cost.
To cover 20 million CA needs to sell 670,000 without DLC just to break even on a lowball development cost estimate. Because of GW involvement and the extra work for 64bit and expansion of CA I'd guess to break even is closer to 25-30 million or probably around 1 million copies of the game at FULL retail price... given that most recent 'new' TW title ROME 2 probably did somewhere a bit over 800,000 at FULL price (within the first 1-3 months after release) it seems reasonable that Sega/CA/GW would bet on at least 1 million copies in the first 3 months with DLC being a very important part for both GW and Sega to ensure profits not just to break even.