Quoted from wdpvideo:I do!
Pro $4,825
Prem $5,650 (If LE's go away)
LE $6,775 (Maybe do away with this all together)
Based on 1000 units per unit made except LE's 500:
Pro: $4,825,000
Prem: $5,650,000
LE: $ 3,387,500
Total: $13,862,500
Minus $4,000,000 to build (That's pretty high markup)
Total: $9,862,500
That's a pretty good market up I mean most of your parts are being used in each machine with some simple add-ons here and there.
I never get into these discussions, but, I do believe that wdp has a pretty good idea on the cost of parts. lets round up his 9.8M to 10M and multiply by 4 ( 4 releases per year) for a Gross Margin of say 40M per year. Now what still has to get paid, Mortgage, cost of capital, Taxes, Utilities, Salaries, benefits, Insurance, Inventory, Marketing, Equipment purchase/maintenance and I am sure I am missing several things. Where is their factory ( Chicago ) how many employees (100?)? The good news for Stern is that the 40M covers all that and and leaves a profit that is enough for the owners to put their own personal capital at risk. JJP a while ago was not that fortunate. The reasons others do not deliver games is that they underestimate these costs as well.
The Market sets the price of games. If the market does not cover costs,business close. There are lots of people both rich and not, that want to buy games brand new for just the shear pleasure of it. NIB owners win financially on games like Tron LE , ACDC, and lose financially on games like Transformers, X Men and Avengers. Second / Third hand buyers win the inverse financially. So we all have a choice NIB ?Second hand? If one does not want to pay NIB, then there are many options such a waiting or buying older games.
I do not blast companies on how much they are or are not making but decide how i want to spend my own personal money on this great hobby. If correct most of the time , one can have a lot of fun and still break even.