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EIF: Deering Says Only 3 Of 10 Games Recoup Costs

At the Edinburgh Interactive Festival, former Sony Europe boss Chris Deering said current development costs mean only 3 out of 10 games recoup their expense, exacerbated by the decline he sees coming for software sales -- even while worldwide console user
Former Sony Europe boss and current Codemasters chairman Chris Deering says the growth of PlayStation 3's worldwide active userbase will outpace the Xbox 360's by 2011, speaking during the Edinburgh Interactive Festival, of which he's also chairman. PS3's install base will jump to 70 million, Deering says, as opposed to Xbox 360 set to grow significantly - but not nearly as fast - to 40 million. By 2011, he adds in the Gamasutra-attended lecture, the industry's audience will comprise some 2.5 billion players with "some sort of device" that can play games, a significant increase from the 500 million he sees currently, including users of emerging game platforms like the iPhone. Despite all this growth, however, Deering warns that current development costs, currently in excess of $10 million for major titles, are unsustainable, given that less than 3 out of 10 games actually recover their costs. Moreover, he says software sales may decline even as hardware proliferates. "Traditional revenue sources will not be sufficient to fund games development," he says. "Especially as global retail sales will be 20 percent lower in 2011 than in 2008." Development costs on major games now exceed $10 million, and Deering says less than 3 out of 10 games recover their money. During this talk at the Edinburgh Interactive Festival, Deering also made numerous other predictions on the evolution of new media, internet and gaming - forecasting internet video to become the fastest growing segment of media, while the expansion of mobile networks will create massive portable social networks.

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