Game Room - If i Were Rich 2.0, The Offers i'd Make

Just for "fun" i decided to revisit the compilation vs. Game Room argument.  It is too bad that Game Room has been in stasis for a while - i kind of miss it.  However, do you know what has been in a form of stasis even longer?  The compilation disk of 80s and early 90s games.  It seems that there really haven't been many released since 2007.  i'm hoping that digital compilation (like Game Room) can pick up the slack.   

Just for fun i am going to try and break down just how successfully some of the previous compilation discs have been, though i decided to omit anything before 2007.  Some of my estimates may be in the ballpark, some may not be in the same solar system.  i am using $30 for the price of these compilations.  For development cost estimates, i will be using 15 salaried people (@ $50K each) working for 2 months.  i will use this for every compilation.  i will treat this as a constant ($125,000).  For the gross estimate publisher take i am using 45% (which is the estimate for a $60 game).  For the estimated net publisher take i am subtracting the above two numbers. The "Game Room" cash offer would be a one time licensing fee payable.  When i am talking about guaranteed revenue from unit sales i mean 50% (or $1.50) per unit sale.  The numbers i picked for Midway, Namco, Capcom and SEGA are mainly becuase the numbers of 2005 or so compilations they sold were at least 100K or because i didn't see a fitting compilation. 

For a post potentially involving a lot of numbers this will have many words.  i will also post what specific offer i would make to each of the publisher to try and get them on board with Game Room.  If i would have had the right 6 numbers, i might have been trying this for real.  But alas, it was not meant to be (at least yet...).

Let's start.  i am using data from vgchartz.com - it may not be totally accurate, but it seems to be the best i can find (as real data isn't easy to obtain, especially without connections).  Let the fun begin

Konami:
* Konami Classics Series: Arcade Hits (DS)
* Estimated Unit Sales (vgchartz): 30,797
* Estimated Gross Revenue (all levels): $923,210
* Estimated Publisher Take (Gross): $415,760
* Estimated Publisher Take (Net): $290,760
* Estimated Revenue Per Game (15): $19,384
* Game Room Cash Offer: $500,000 - $750,000 for 30-50+ games
* Game Room Offer: 30+ Games, guaranteed revenue of 2,000 unit sales each (first 12 months on service),  minimum total revenue guarantee of $500K

- If Konami got 50% of revenues from their sales on Game Room, they would currently have a publisher take of about $210K (could be higher).  Atari would be over $200K as well (probably higher as they did have unranked games too). 

Taito:
* Taito Legends Power Up (PSP)
* Estimated Unit Sales (vgchartz): 26,546
* Estimated Gross Revenue (all levels): $796,380
* Estimated Publisher Take (Gross): $358,371
* Estimated Publisher Take (Net): $233,371
* Estimated Revenue Per Game (20): $11,668
* Game Room Cash Offer: $350,000 - 583,000 for 30-50+ games (extra $75-100K if includes Space Invaders)
* Game Room Offer: 30+ Games, guaranteed revenue of 2,000 unit sales each game (first 12 months on service), minimum total revenue guarantee of $350K. 

Midway (WB), Namco, Capcom, SEGA
* Game Room Cash Offer: $750,000 - 1,000,000 for 30-50+ games
* Game Room Offer: 30+ Games, guaranteed revenue of 2,000 unit sales each game (first 12 months on service), minimum total revenue guarantee of $750K.

 
So, if i were rich and MSFT and the publishers were willing, my plan would be an outlay of $3.85 - $5.33 million.  Now i guess you can see why MSFT could have been somewhat hesitant to spend that kind of money on a service that could potentially make about $2 million in revenue a year.  The best way for MSFT would be to just split the revenue from sales with the respective publisher (50/50 or 40/60).