Delaying a game like this relatively last-minute and giving it an extra year of development is waaaay more expensive than the bonuses would have been.
Is it still more expensive if they just shelve it and pretend to give it extra development? I haven’t seen any details on why it wasn’t ready for release or what they are changing or adding? A quarter billion dollars in savings seems like pretty good motivation for a company to park a project for 6 to 12 months.
Agreed. Subnautica 1 steam revenue breakdown offers a bit of perspective on why they might want to play pretend.
“How much money did Subnautica make?
We estimate that Subnautica made $274,113,745.92 in gross revenue since its release. Out of this, the developer had an estimated net revenue of $80,863,555.05. Refer to the revenue table for a full breakdown of these numbers.”
Bloomberg reported that the bonus was tied to revenue targets. So the $250,000 estimate must be estimating significantly higher revenues for them in 2025.
What you posted is just the sales on 1 platform for 1 game, whixh came out in 2018 when games were cheaper.
It’s far and away their most profitable game to date, so it would make sense to get some perspective from it. Can you offer anything concrete about their other platform sales? I’m not familiar with any tools for that
According to one of the articles above the publishers operating profit last year was “only” $300m so that bonus would make the shareholders mad I guess.
Yes. Like, it’s not even a question it’s more expensive to delay it. First of all, they are choosing to pay for 6-12 months of extra development, which alone is probably several times more money than the bonus that they would have paid out. I don’t know what their payroll is, but we don’t need to know because math.
If the bonus was for 1/2 annual salary per person (which would be insanely high), then the cost of the bonus would be the same as 6 months of additional payroll. Meaning that with any longer delay than 6 months or smaller bonus structure than 1/2 of annual salary, it becomes more expensive to delay the game. Both of which are incredibly likely in my opinion.
And that’s just salary. It’s possible the studio was planning on laying people off after release, but more likely that they would have moved to a other project that is currently wrapping up pre-production. So this is causing a cascading effect unless they hire additional staff to catch up.
Then you have marketing costs. The rule of thumb in the industry is that half the overall budget is marketing. There are all sorts of contracts they probably had- digital stuff like banner ads on websites, on the console digital storefronts, partnerships with twitch streamers and YouTubers and review websites, physical stuff like cardboard cutouts and fliers. They may have started printing for boxes for physical releases (though I’m not sure whether this game would have had one or not). They may have started acquiring merch inventory: shirts and stickers and backpacks and flashlights and more perhaps. Some of these contracts they may be able to postpone or cancel, but they certainly aren’t getting back 100% of what they paid.
And in all of this time they aren’t getting the huge revenue spike they were expecting. The vast, vast majority of a game’s revenue comes at launch (excluding live services, which this hopefully will not have). They need to survive another year on the trickle of revenue coming in from the sales of their other games, or Krafton may need to pump more of their own money into Unknown Worlds. Or debt.
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Is it still more expensive if they just shelve it and pretend to give it extra development? I haven’t seen any details on why it wasn’t ready for release or what they are changing or adding? A quarter billion dollars in savings seems like pretty good motivation for a company to park a project for 6 to 12 months.
Agreed. Subnautica 1 steam revenue breakdown offers a bit of perspective on why they might want to play pretend.
“How much money did Subnautica make? We estimate that Subnautica made $274,113,745.92 in gross revenue since its release. Out of this, the developer had an estimated net revenue of $80,863,555.05. Refer to the revenue table for a full breakdown of these numbers.”
$274,113,746
GROSS REVENUE
ADJ. REGIONAL PRICING
$24,670,237.13
DISCOUNTS
$54,822,749.18
REFUNDS
$32,893,649.51
STEAM CUT
$48,518,133.03
VAT / SALES TAX
$32,345,422.02
NET REVENUE
$80,863,555.05
Bloomberg reported that the bonus was tied to revenue targets. So the $250,000 estimate must be estimating significantly higher revenues for them in 2025.
What you posted is just the sales on 1 platform for 1 game, whixh came out in 2018 when games were cheaper.
It’s far and away their most profitable game to date, so it would make sense to get some perspective from it. Can you offer anything concrete about their other platform sales? I’m not familiar with any tools for that
According to one of the articles above the publishers operating profit last year was “only” $300m so that bonus would make the shareholders mad I guess.
Yes. Like, it’s not even a question it’s more expensive to delay it. First of all, they are choosing to pay for 6-12 months of extra development, which alone is probably several times more money than the bonus that they would have paid out. I don’t know what their payroll is, but we don’t need to know because math.
If the bonus was for 1/2 annual salary per person (which would be insanely high), then the cost of the bonus would be the same as 6 months of additional payroll. Meaning that with any longer delay than 6 months or smaller bonus structure than 1/2 of annual salary, it becomes more expensive to delay the game. Both of which are incredibly likely in my opinion.
And that’s just salary. It’s possible the studio was planning on laying people off after release, but more likely that they would have moved to a other project that is currently wrapping up pre-production. So this is causing a cascading effect unless they hire additional staff to catch up.
Then you have marketing costs. The rule of thumb in the industry is that half the overall budget is marketing. There are all sorts of contracts they probably had- digital stuff like banner ads on websites, on the console digital storefronts, partnerships with twitch streamers and YouTubers and review websites, physical stuff like cardboard cutouts and fliers. They may have started printing for boxes for physical releases (though I’m not sure whether this game would have had one or not). They may have started acquiring merch inventory: shirts and stickers and backpacks and flashlights and more perhaps. Some of these contracts they may be able to postpone or cancel, but they certainly aren’t getting back 100% of what they paid.
And in all of this time they aren’t getting the huge revenue spike they were expecting. The vast, vast majority of a game’s revenue comes at launch (excluding live services, which this hopefully will not have). They need to survive another year on the trickle of revenue coming in from the sales of their other games, or Krafton may need to pump more of their own money into Unknown Worlds. Or debt.