According to recent data compiled by analyst group Electronic Entertainment Design and Research,
only 4% of games are profitable
Sounds like gaming is one quarter-donated-to-a-street-Santa away from snorkeling through your dumpster, right? Unsurprisingly, no.
As it turns out, initial reports concerning the EEDAR findings in question got their words in a jumble. See, the 96% statistic came from this little number:
"Only 4% of games that make it to market actually make a profit, he says. About 60% of a game's budget is spent reworking or redesigning a game. Armed with all this data, companies can make those tough calls early in the development process."
According to a press release from EEDAR , that statistic should've read: "Only 4% of games that enter production will return a significant profit." However, 80% of games that enter production never make it to market, which kind of throws off the curve for the rest of the class.
Of the games that actually make it to market, then, a far less pukey 20% turn a profit. And while that doesn't exactly conjure up images of mansions and double-decker Ferraris, it's enough to keep the industry alive and ( mostly ) thriving.
So, that's that.