Only one in five video games make a decent profit
ONLY 20 PER CENT of released video games ever make sizable profit according to analysis outfit Electronic Entertainment Design and Research (EEDAR).
Strangely enough, the data only really garnered much attention thanks to being completely misquoted by Forbes. The site ran an article using EEDAR’s data stating that only four per cent of games ever turned a profit, when what the data actually said was that only four per cent of all games that ever entered into production make a profit. This is significant because the majority of games which go into development, don’t actually come out the other side and never actually make it to the shelves in the first place.
Of the games that do actually make it through to production, however, an astoundingly low 20 per cent of them actually make a "significant profit".
EEDAR blames the lack of profits on the fact that game developers and publishers tend to spend over 60 per cent of the allotted game-making budget on redesigning aspects of a game until deemed ready for action. EEDAR co-founder Geoffrey Zatkin even went as far as saying developers had "gone in blind as to which features would sell the game better".
Perhaps, however, in times of economic turmoil, developers would do better to turn their attention more to the task of making games profitable, rather than face a possible game over. µ
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I've been a long time gamer (over 20 years) and one thing that is often the choice is to have super duper effects without story line. There are timeless games... solitaire, tetris, worms, ... that although their graphics are not all that super or duper they still captivate the player and often for hours so graphics and effects don't really make the game.... cough cough Duke Nukem (taking) forever.

I will say though that every so often some games come out and are just awesome... if you like zombie bashing check out valves new one Left 4 Dead, w00tz0rz :).

Seriously though games need to be less like each other, more captivating and have more hardware optimizations so it plays smooth. Crysis is a good game but the fact that it isn't all that well optimized means it plays like crap even on the best of systems out there. I don't play games to have a slide show but to have super smooth game play, heck when I play CSS I dumb down everything so I get the most FPS possible, it's not about how nice things are in that game its about pwning the other guy and rubbing it in their face ;)
How much of the game price is actually going to the console developer?
is why Microsoft are closing Ensemble Studios who have never sold less than 3million units of any game its ever produced and its "Age of Empires" games have given such a MASSIVE profit !?!?

Of all studios out there you would think that Ensemble must be one of the most profitable studios there is!
I guess because of the economic turmoil the Duke (Nukem) will again be late for the party?
Who decides what a "decent profit" is? Investors? Publisher? Developer? Or some analyst trying to make a "decent profit" of selling analytical services to publishers & developers? ;)
1 in 5 from EA's games huh? I though the number should be much lower >xD

Seriously, they make a lot of crap games. Perhaps by Fifa 2031 they will understand.
its a shame that only 1 in 10 are any good, so if 2 in 10 make profit they are doing well
Seems pretty could to me, considering only one in 20 games are actually good...
More cookie cutter games is just what the industry needs. I want more shooters that are guaranteed to sell!
Make GREAT games, instead of glitzy crap that just looks pretty. By great games I mean games like starcraft, Diablo 2 (both still played today 10 years later despite looking like CRAP). Lets put it this way: Design a REALLY FUN GAME. Then try to make it as pretty as possible without ruining the fun. That game will make money.

Today however, game makers design a game to LOOK PRETTY first, then hope to make it fun later, and if not ship it anyway. If it's not fun we quit playing and tell all our friends. If it's FUN FIRST we tell friends to play because its sucking the life out of us and "looks pretty good too". Note the emphasis is on THE FUN PART in that statement, the graphics to us are just a "we hope its in there" thing.

MAKE FUN GAMES AND THEY SELL. MAKE PRETTY GAMES THAT SUCK AND GO OUT OF BUSINESS.

Get it? Look at EA vs. BLIZZARD/ACTIVISION. Get the point? EA remakes games with new rosters and some graphics updates...All the same bugs as last year. Blizzard makes games with almost no bugs, and every game is KILLER! EA lost 340mil (if memory serves) while Blizzard makes 180mil. And a lot more after Diablo3/Starcraft2 come out. Lich King addon just sold 2.8Mil copies in ONE DAY. Great games sell. Don't tell me World of Warcraft is a graphics masterpiece. It's selling because its so damned fun.
Doom, Starcraft - enough said
What percentage of Blizzard games are profitable? id? Valve? Near 100%.

The 1/5 statistic is useless in terms of predicting the profitability of a given game because it ignores how widely success varies by company.
As long as everyone is getting paid and having fun, who needs a "significant profit"?
Don't forget to factor piracy into the profitability equation. 
For instance - 
World Of Goo, a fun, well-designed game, sells for a reasonable price and is DRM-infection free.
Alas, the authors estimate it has an 80% to 90+ % piracy rate. :-(
aren't all that bad. Compared to other entertainment media it is actually pretty good. What percentage of finished films make "a significant" profit? Not very high. How about those 3 billion bands you can listen to online, how many records make "a significant" profit? A rather quite few. Far, far less than 20% of all that is released. Having one in every five products make a "a significant" profit is more than enough to pay for development of all those who didn't.
Nice to see someone blaming failing sales on something besides teh evil warez piratez.

Seriously, the games industry can pretty much be summed up by EA, The Sims 2 is on its 128th expansion (or thereabouts) and when they're not flogging a successful title to death they're releasing complete turds like NFS:Undewhelmed and Sporn. Its no surprise they fail to make a profit on the majority of released titles when the majority of those titles are fail on a disc.
I like Serious Sam The First and the Secound Encouner.
Budget games but huge manic fun!
At the end of the day if these game devs make good games then they will win because ultimately word of mouth (or type) can make or break a game.

Dev's like EA need to wake up and smell the court cases. They do what they want, not what the customers want. They make the boxes bright and jarring and kids buy them but they quickly fall by the way side.
EA produce so much crap its amazing they are such a big company.

Look at Bethesda. Its a tiny company but it produces some of the most in-depth and beautifull game worlds ever conceived. Fallout 3 and Oblivion have sold millions of copys for a reason.

Far Cry was a great game, they produced a great engine with lots of interactivity which made the game replayable. Far Cry 2 was a sack of crap. Yeah its kind of pretty but its the most repetitive and boring game I have ever played. I think they spent most of their time building a map editor and the last 5 minutes making a game.

Dev's need to realise that we decide ultimately what is good and what is not. If they can't adapt, then they will go bust and to be fair, no one will miss them when they are gone.
How does this comparer with other industries? Particularly the film industry.
But 1 in 5 EA games, which is quite a difference.
Now let's see what games EA Games has on the catalog.
Uh, there's about a zillion versions of FIFA and co, a million NHL iterations, ten billion add ons for the Sims (don't tell me that didn't sell well), a whole catalog of Need for Speed titles, the unending Tiger Woods series, the undying Madden series, the incomprehensible UEFA series, etc, etc.

Gosh, maybe if they tightened up the catalog a bit they wouldn't be in such a spot, and we wouldn't be hearing such nonsense.
Valve has made solid benefits from a single initial idea : Half-Life. It has grown its catalog gem by gem, carefully mining the seam and polishing each find like mad before release.
Counter Strike ? Brilliant. Portal ? Sheer genius. I doubt very much that Valve only has a 20% success rate, whatever metric you may choose.
Blizzard has . . do I really need to say it ? Blizzard is the only game company that can boldly say "when it's done" when talking about a release date and have its fans hollering and cheering with glee. They wouldn't want it any other way.
EA is the other kind of game shop : the one that throws shit on the wall and sees what sticks, then copies that to death. With DRM.
Despite that kind of management, you say EA still gets one title out of five right ?