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Thread: Three gold nuggets about business practices.

  1. #1
    Abdülmecid I's Avatar ¡Ay Carmela!
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    Default Three gold nuggets about business practices.

    Firstly, I should mention that all credit goes to Timur 222, a twitter account specialised into researching the commercial aspect of various video-games, according to his followers' requests. One of them concerned the Total War franchise, so Timur obliged and uploaded three relevant bits of information. In all cases, his sources are the Linked In profiles of former SEGA or Creative Assembly employees, including the legendary Tim Ansell, the founders of CA himself. All the details in their bios are described in a very positive manner, so, although there could be quite a bit of exaggeration, given Linked In's self-promotional nature, it's safe to assume that everything listed is considered a significant sucess, from a business point of view.
    1. Empire Total War

    I'm not very familiar with the marketing jargon David Bonacci is using, but, if I understood it correctly, the pre-orders for Empire Total War reached the number of 98.000, which covered one quarter of the aimed sales, during the entirety of the game's lifespan (remains undefined). Bonacci presents that number as a success, but it's considerably lower than that of subsequent installations, like Rome II, Warhammer and Three Kingdoms, all of which surpassed the obstacle of one million. Moreover, for all these games, the pre-order numbers represent much more than the relatively meager 24%, another indication confirming how immensely the importance of pre-ordering grew in just a matter of years. It's also interesting to note that the pre-order incentive for Empire, the first Total War game to be available exclusively on a digital platform, were just some special units, which were probably not considered nearly as attractive as Sparta, Chaos, Vikings and the Yellow Turbans.

    2. Shogun I, Medieval I and Rome I

    Tim Ansell tells us in a straightforward manner that Shogun I, Medieval I and Rome I sold respectively one, one and a half and two million copies. Unfortunately, he doesn't specify the time it took for these numbers to be achieved. I personally suppose that they are related to their lifespan, probably estimated in one year, while, in the case of Rome I, I doubt Ansell has access to figures post-2005, after he left the company, following its purchase by SEGA. If we compare them with the stats of the newer games leaked by Valve, we can notice that there's definitely a gap between them and Shogun I/Medieval I, but the difference with Rome I is not that great. Rome I definitely sold less than the most profitable flagships, at least on the short-term, but also clearly overcame less shiny titles, like Attila. Perhaps the fanbase hasn't grown as exponentially as previously assumed.

    3. DLCs for Warhammer

    Last but not least, Stelios Avramidis offers us the juiciest piece of information, in my opinion. DLCs appear to be immensely profitable, which probably means that they are responsible for a disproportionately large percentage of CA's total revenue, similarly to EA, for instance. The Wood Elves did more than 100% of their net profit, but the undisputable victor here is the Blood pack, which surpassed the 200% net profit limit! It's also noteworthy that Avramidis describes the Blood pack here in purely marketing terms, further undermining the already refuted excuse that blood is sold separately for the sake of age ratings. Given the huge profits of the Blood pack, despite its superficially low price, I wouldn't be surprised if it contributes the most, even in absolute numbers. Finally, judging from each omission, we can extrapolate that the Beasts seld less than their amber counterparts, an observation partly corroborated by the considerably more positive feedback for the second faction DLC pack.

    So, what we can conclude from the above images? In my opinion, they demonstrate the slow but gradual growth of the Total War fandom and, much more importantly, the radically transformed landscape of business practices and customer environment. Pre-orders and DLCs nowadays dominate the budgets of the video-gaming industry, whose profits heavily rely on marketing and the promotion of nominally cheap packs, which however offer much greater opportunities for net profit, thanks to their minimal expenses and the expansion of the digital market. Personally, I view these changes in a negative light, as I consider them detrimental to the consumer, but I understand that many of you will disagree, since DLCs and Steam give access to much richer content, albeit in a worryingly increased price.

  2. #2
    Basileos Leandros I's Avatar Writing is an art
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    Default Re: Three gold nuggets about business practices.

    This is a very delicate thread, given that we're discussing business practices over here.

    Yes, the Total War fanbase is growing, but the exponential growth was due to Warhammer TW not the historical games. And given the immense commercial success that WTW has been it's important to note that this will go on from now on. Expect a significant increase of fantasy elements within the historical games and that will perhaps ruffle a few feathers.

    On the other hand, because historical games usually appeal to a relatively limited number of people, they were forced to expand in order to push the franchise in something else, something fresh, a new direction of the game.

    I do want to say that I dislike the DLC way of expanding games, I significantly dislike it. Some are horrendous offenders but this is the way that it will go from now on. I only hope that they will put it significant effort into every package they put out.
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  3. #3

    Default Re: Three gold nuggets about business practices.

    The marketing jargon is somewhat confusing here. The Empire example seems to tell us that the total expected sales over the product lifetime was 400K at the time of release, but this is additionally specific to Sega of America, not worldwide operations. At the time, the American market was about half of the PC gaming market overall, which would still be lowballing the sales expectations considerably if Rome 1 had sold 2 million worldwide. Going by this old Sega earnings report, Empire Total War sold about 810,000 copies globally in Fiscal Year 2008, which ended just under a month after Empire released. Given that Empire was hailed as CA's most successful title to date at the time, this would mean outperforming all its predecessors.

    This old CNN money story puts the games at 7 million sales worldwide just prior to the release of Rome 2 (2013), with around half of that being in the US market. Interestingly, the install base of Rome 1 in the US was estimated at 876,000 at that date. This old Edge ranking puts the Rome at 390,000 sales in 2006 (prior to the digital distribution), which is in line with the publishing awards that it received. It also puts the total franchise sales at 1.3 million. Given that Edge is a primarily about the UK market, I'd estimate global figures to sit at a bit above double that at the time.

    Based on this, it seems likely that the numbers for Shogun, Medieval, and Rome come from much later data. A boxed PC game selling 2 million in 2005 would've obliterated sales records for mainstream genres, not to mention the more niche strategy market. I don't think it's too uncommon for people to use lifetime sales of products they created as advertisements on Linkedin, even after they've left the company.
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  4. #4
    Daruwind's Avatar Citizen
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    Oct 2013

    Default Re: Three gold nuggets about business practices.

    Nice post Abdul!

    but a few points.

    3) Net Profit = Total Revenue – Total Expenses, so if Blood DLC has 200% profit, I understand it as total revenue was twice as high as expenses. Almost all Blood DLC are 3 Euros in my part, so CA is getting 2 Euros while cost (production, marketing, Steam....) is 1 Euro.

    Now WE is having just 100% profit so from 19Eu..9,5 are expanses and profit is 9,5 as well. So CA is getting almost 5x times more money from such DLC then from Blood so basically CA would have to sell 5x more times Blood DLC to catch money influx from single DCL. Main point si, Blood DLC is not so significant in my eyes...especially if you consider that many games are sharing the very same Blood DLC (Attila/ Wh1/2 and probably Wh3 with them as well).

    Overall I agree that main profit are DLCs but that is normal. Game consoles are heavily subsidised as well. Basically crafting base game, all engine part etc is costing a lot. I would not be surprised if net profit for main game were way way lower. :-)

    1) What I find mostly interesting is long term revenue from all TWs. If we look at our older thread the number for Empire: Total War was 3,491,439 in 2018. Now it can be closing to 4 millions. For long time Empire and others are getting -75% sales but still it must be bringing additional revenue year after year. If we consider first million at almost full price, game from that point generate almost the same income despite sales....

    Anyway, playtracker will soon roll out update so hopefully next week we can get some interesting estimation for numbers.. (right now their stats are skewed
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