Only Four Percent of Video Games Make a Profit – EEDAR

The phrase "hits driven business" gets thrown around a lot these days, but in the case of video games it really is true. Creating video games and knowing what will actually lead to commercial success is not exactly a perfect science. There's no magic formula, and unfortunately that means game development nowadays is very, very risky. Millions upon millions of dollars can be invested in a game project, and sometimes the company is lucky to break even, let alone make a profit.

In fact, according to Electronic Entertainment Design and Research (EEDAR) – as reported by Forbes – roughly four percent of video games that make it to market are actually profitable. To think that 96 percent of video games only break even or lose money for publishers is somewhat alarming. Geoffrey Zatkin, who designed games for 11 years before co-founding EEDAR, noted, "Every game I have ever worked on, we've gone in blind as to which features would sell the game better." 

Reworking or redesigning parts of a game can comprise 60 percent of a game's budget, according to EEDAR. Sometimes including an extra feature or mode can really make a difference but other times it might not. Zatkin, for example, said that not knowing for sure if the inclusion of multiplayer would be worth an extra $500,000 "would scare the crap out of me."

"No one or two things can determine the success or failure of a game," Zatkin noted. But a number of factors can point to a greater chance of success, such as release timing, the developer's pedigree, the genre, the platform(s) and the promise of downloadable content.