Why companies have to sell as many copies as possible

[Blinkman987]

A little background first: I work in marketing for a large company that does game development and publishing. We license a lot of IPs, including some video games. We do not produce video games, but work closely with video game companies.

It's crucial for companies to make the most money they can from their products. Costs aren't coming down anytime soon in the video game industry, and the money it takes to hire the best is certainly going up. Top producers are seeing big money across the board for the first time, and the cost to market games is going through the roof. It's a highly competitive market, and it's only getting more competitive.

The Home Run
This is what most companies do. You spend your money making a few games, hoping one of them is a home run. The profits from the home run's revenue can fuel development for other games and make up for the majority of games not selling well. Some games are just not going to sell, no matter how good they are. Production costs of games is rising at an alarming rate as the technology increases and expectations rise. The majority of the money is reinvested in development and paying the staff. Some is kept for ready cash and other projects, but for the most part the money earned is put right back into future games.

The Double
If your company can't afford to spend a bunch to try and release a AAA title, some companies spread the cash around multiple IPs to try and just hit doubles. Shovelware is a good, yet bad example of this. They release solid games and have much less cost to recoup. While you'll probably never release a giant hit, at least you have consistent cash coming in. Even here, revenue is typically reinvested into the company and allocated in the next year's budget for new titles or to help struggling teams.

Either way, it's important for a company to maximize revenue. More revenue means that you can keep your staff happy, develop more titles, and develop better titles. You need extra cash for when development goes over the planned timeframe, you need to train more staff, or you have bad luck and you have a few games that just don't sell.

Excellence doesn't come cheap, and companies need a reasonable return on their money. Why even be a company if you're going to see low returns? You could invest in a good hedge fund and get 20% returns on cash without having to produce a thing or hire a single person. The big hits fuel the smaller games and make them possible. When someone said in another thread that Final Fantasy 13 40mil vs 50mil copies didn't matter, that's just a ridiculous statement. The cash from an extra million copies is going to go to the investors (if you're publicly owned) and to DEVELOPING BETTER GAMES. The more money you have, the more money you can spend.

Where do you think that extra revenue goes? It goes to making better games and to the employees. S-E employees have bills to pay, groceries to buy, and kids to send to college. They're making a product and want as many people to enjoy their product. S-E doesn't care about some fan flaming war. They simply did what was best for the company. You people are far too unrealistic on how a company works and your unrelenting "moral code" doesn't apply here.