Originally Posted by bettieblue
Think of it this way. Let say there are 50 million Xbox's out there and maybe 50% of those play Halo. Vs 100 million iOS devices and 50% of them play Angry birds.
Halo cost $59
AB cost $.99
Which cost more to develop?
Which cost more to support?
In the end game makers want to make money. Making money is sales - cost = profit
You know how retail & wholesale work, right? And that you can't treat retail price = profit?
If they sell a disc-based Halo at $59, MSFT/Bungie don't make 70% of that like they do on the App store. I know in the Toy & Game industries, the retailer generally takes 50% of total retail price. So your $60 goes to $30 immediately. You have manufacturing and shipping (from China and to store) costs that probably are anywhere from $2-5/unit. To play on a console, games have to pay licensing fees to offset the (commonly) loss-leader nature of console HW. Pay for marketing, advertising, and promotions to make your channel happy.
Now pay all of your lawyers, voice actors, 3D modelers, programmers, real estate, and other costs.
Also, you assume that every title they spend millions on is a hit like Halo. Most companies making AAA titles have to offset popular titles with ones that didn't do so well (Rockband 3/GH5, I'm looking at you).