Why waste millions of $$$ on advertising for huge games?

[mizzou]

This is why you're not a CEO.

Nerds in a gaming forum who know about every game 2 years before it's released != the general public

this is true...shit, I wouldn't have known about "The Last of Us" if it wasn't for advertisements.

I"m sure I would have heard of it, but I would have thought it was just another dayz clone

 

[Dumac]

Are you kidding me? Marketing has a huge effect.

Just take a look at Titanfall. That game has the most manufactured hype out of anything I've seen recently - it's almost purely marketing.

 

[Lonyo]

GTA5 would have made just as much money with a 1/100th of the marketing budget. Same as Bioshock Infinite, Last of Us, or any other huge game. They could save a lot of money on game production costs by just not doing any of that wasteful spending. We don't need to see a tv commercial or billboards for these games.

The assumption is that for every dollar you spend advertising, you make at least one extra dollar in profit to cover that advertising cost.
That doesn't always work in practice, but most companies publish more than one game, so they have more data points to look at to see how effective their marketing is, while we just assume it's stupid and unnecessary.

It's not like they throw millions at marketing just for fun. They hope that the money they spend will more than pay for itself.
If you make a game and it costs $10m and makes $10m after sales costs, that's covered its costs. Fine.
If you make a game and it costs $10m and you spend $10m on advertising and it makes $25m profit, you've made an extra $15m by spending $10m, so you're $5m better off. You have +$5m from where you started, rather than $0.

So, why do you advertise? Because it's supposed to generate more extra money than it costs. Duh?
Maybe some companies over spend, or could get the same end result with less because they have diminishing returns on their budget, but that doesn't mean advertising doesn't make sense.
You assume GTA5 would have made the same with 1/100 of the budget, because you pulled random numbers out of your ass with no basis.

Worldwide it took 6 weeks to outsell GTA4's lifetime sales (GTA5 29m vs GTA4 25m in 5 years).
Do you REALLY think that GTA5 would have sold that well if it hadn't had a large marketing budget? Since the previous data point, GTA4, indicates no, it would not have.

You also have to remember that when a game sells at launch, it sells for a higher price than if it's a 5 year old game being sold, so 29m sales right at launch is an even higher amount of money more than 25m sales over 5 years.

So, why did it have a massive marketing budget? In order to make a massive amount of money. And no, it wouldn't have made as much without the marketing budget.

 

[smackababy]

^GTA4 also had an additional PC release to help sales numbers. GTA5 isn't even finished moving units.

Obviously, marketing works. Otherwise, companies wouldn't do it. How much money does a game that you've never heard of make? Much less than that which has a commercial played every 45 minutes on TV.

 

[Father Torque]

BioShock Infinite wouldn't have sold half of what it did if it weren't for that commercial.

 

[KentState]

Working in the industry, we can pretty much say how effective an ad is depending on placement with pretty good accuracy. Look into the concept of treat and control for example on how the industry can judge lift from engagement.

 

[Maximilian]

GTA5 would have made just as much money with a 1/100th of the marketing budget. Same as Bioshock Infinite, Last of Us, or any other huge game. They could save a lot of money on game production costs by just not doing any of that wasteful spending. We don't need to see a tv commercial or billboards for these games.

I don't think it would've sold as well tbh. Im not a fan of marketing and am not hugelyaffected by it but im aware its likely influenced purchases ive made when I didn't give a toss one way or the other, I went with the product I had heard of.

Picture it, mom is in asda, sons done good at school shes gonna buy him a game. She gonna pick GTA V she saw on the billboard or some other game?

Casual gamers might not even know it was out.

 

[greenhawk]

So they can hype their games which results in even more sales even if the game is complete garbage.

The first days sales make up for everything they spent and more so why would they not do it?

This then leads to the topic issue of advertising heavily for release day as it gets people interested in buying before word of mouth gets around that the game is actually crap. Without the increased sales on day one, there would be no other sales.

 

[BladeVenom]

It buys articles, good ratings, and keeps publishers from running articles about how bad companies like EA really are.

DRM sucks really bad, and made many games almost unplayable, but game publications completely avoided mentioning DRM. Advertising dollars bought their silence.

If big game companies didn't advertise, then game publications might start writing more about indie games. That would be bad for the big game publishers.

 

[Ns1]

Because 1BN in sales with 900m in marketing expense is a hell of a lot better than 200k in sales with 100k in marketing expense.

ex) you have all those games with their downloadable content and it becomes a # of users game, not a sales $$$ game.

In that above example, 1BN sales @ $50/game = 20MM users
Compare that to 200k sales @ $50 = 4k users

If you can make $1 dollar from each user after the initial sale...

 

[IEC]

I previously worked for a software company which did not advertise.

We had no problem raking in billions (yes, with a B). Prospective clients came to us because people who liked our software referred them to us. Sometimes your product is so good it practically sells itself.

OTOH, there is no substitute for making a good product. Even if your advertising is great and the "sizzle" is there if your "steak" sucks no one is coming back for a second meal.

 

[shortylickens]

Guys:


http://en.wikipedia.org/wiki/Marketing

http://en.wikipedia.org/wiki/Advertising


Quit mixing them up.