What $60 for a Game REALLY Buys

You just plunked down $60 for game, grumbling at the cost of maintaining your hobby, especially when you plunk $60 down at a regular rate to keep playing. Did you ever wonder where that $60 goes?

An interesting graphic from the LA Times, courtesy of Steve Perlman of Onlive, breaks it down for us:

Another way to look at it is to say publishers such as Activision and Electronic Arts receive $45 after retailers take a $15 cut. Publishers turn around and pay a $7 licensing fee to console manufacturers such as Microsoft, Sony and Nintendo. The cost of making, packaging and shipping game discs to stores carves up another $4. Finally, not all games sell, so the expense of returning unsold inventory eats up another $7.

That leaves publishers with about $27 per disc sold for development, marketing and other expenses. These are, of course, back-of-the-envelope averages. Each of these numbers can vary. For instance, a publisher could negotiate a smaller licensing fee with console manufacturers. And by deploying the Goldilocks method of inventory (not too much, not too little), they can also minimize returns. Tinkering with the margins in these ways lets companies tune their bottom lines.

Can I just send the publisher $27 and be done with it?