Less than three out of ten games recover development cost, former Sony exec says

Chris Deering, former SCEE executive and current Edinburgh Interactive Festival (EIF) chairman, delivered a speech to open this year’s EIF where he called for the industry to look for new revenue sources, saying traditional revenue sources will not be sufficient to fund development.

“My guess and analysis shows that less than 3 out of 10 games recover their development and marketing costs with boxed goods sales,” Deering said. “So what’s going to have to happen? Creative use of hybrid online and offline advertising revenues, online offline transactions with consumers – these business models must be explored.”

Like Microsoft and Sony, Deering thinks the next big thing will be the digital revolution, and also predicts that there will be a growth in mobile social networks, TV, GPS and advertising which will offer more resources to developers trying to get that cashola.