M-Rated Games Profitability Increased
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First, let's take a look at the E-rated console software increase. It seems likely that at lot of this increase could be attributed to software sales exclusively on the Nintendo Wii. Consider that Wii Play, Mario Party 8, and Super Mario Galaxy together generated more than $400 million in revenue in 2007. Those three games alone account for nearly half of the increase in revenue for E-rated console software in 2007.
Second, where is the revenue for M-rated console software coming from especially when fewer M-rated games were released in 2007 than in 2006? Here, again, three games seem to be critical: Ubisoft's Assassin's Creed, Microsoft's Halo 3 and Activision's Call of Duty 4. These three M-rated games sold a combined 11.7 million software units in 2007 (across all platforms) and each retailed for a minimum of $60. Together they accounted for a minimum of $700 million in revenue for 2007. When we look back at 2006, there was only one M-rated game in the top 10 software chart for the year Gears of War, ranked 7th. There simply weren't many best-selling M-rated games in 2006 and the M-rated console revenue for 2006 reflects that.
In fact, consider the following: using my estimates, the revenue for M-rated games might actually have dropped in 2007 if it weren't for those three big games (Assassin's Creed, Halo 3, and Call of Duty 4). Moreover their revenue is so abnormally large that they make the average revenue of $15 million per M-rated console game in 2007 somewhat meaningless.
