Jim Raynor Comes to Korea!!!

[flak4321]

Advertising costs can look steep as a lump sum, but are not so heavy when the ads do their job and the cost can be spread over millions of units sold and become very little, as GnaRwffotsirk just noted. An illustration:

Let's assume hypothetically that the mentioned $100 million figure includes current ad costs of $15 million, and we'll add another $50 million for the rest of the year. Let's assume 90 million copies sell between 7/27/10 and 1/1/11. That's about 72 cents per copy (USD).

This brings an interesting note that many people miss. Any production and ad costs incurred in 2010 do not get carried into 2011's product price. This repeats when 2011 moves into 2012. This is why we see so many games drop in price or get re-released in War Chests and other such packages after 3 to 5 years. Once the advertising sweet spot passes, these expenditures no longer mean anything to sales and can be eliminated. Only reprinting costs carry year to year beyond this point plus costs for patches and a generally smallish amount to be used elsewhere in the company.

[TheEconomist]

Uncharted 1 & 2 cost 20 million each and God Of War cost 44$ million. These numbers are so low because Sony sucks at advertising and has somewhat given up on it recently. Where as game like Halo 3 may cost less to develop, the overall costs are well over 60 million. For StarCraft 2 to cost 5-8 times some of the biggest budget games, we know we're getting a good deal at 60$. I hope this silences the complainers.

[MulletBen]

*Ahem*

Advertising is only done if it increases the profit for the company. They obviously think that it's worth it to advertise, or else they wouldn't have done it.

How does advertising increase profit? First, it tells people, "Hey, look at me, I'm this thing you could buy." That's directed to people who don't know about the product in the first place. Then it says, "Hey, look at me, I'm this totally awesome thing you could buy." That's directed to anyone who knows of it's existence, (including those people it just told) but are unsure whether or not it's anything worth getting.

Are you either of those people? No, since A. You don't live in Korea and B. You're on a Starcraft fansite. So it can be easily understood why you think it might be better not to "make us pay." However, if money was not spent on advertising, the cost would be even higher (or if it did not change, Blizzard would make much less money).

Think of it this way. Blizzard makes X amount of money off each copy of SC2. Blizzard lowers the price, making 1/2 X on each copy. Everyone who would have bought the product at the higher price, buys the product at a lower price. Let's call these people A. Other people who were undecided now decide to buy, because the price is lower. Let's call them B. Lowering the price does not affect the buying decisions of those loyal, or those who had no idea the price was changed or the product was even there. Blizz makes 1/2 X(A+B)

Now, scenario 2. Blizz still makes X profit on each copy. Blizzard now spends 3,000,000 X on advertising. This does not affect the buying decisions of A. This does, however, generate hype among those undecided, and many of them determine they will buy SC2. It also generates hype among C, the very largest group, who previously had no idea about SC2, but now and are interested. For many of these people, the cost of the product is not a real issue. Many C's become B's, while many of them skip straight to A. Now, you have a new model for profit: X(A+B+C) - 3,000,000X.

I can guarantee you, 1/2 X(A+B) < X(A+B+C) - 3,000,000X. The advertising may cost a lot; a WHOLE lot. You will win far more loyal customers with a building sized ad than with 1-2 USD off the price tag.

[Hammy]

@Noctis:

What about the obvious fact that SC2 is a trilogy and the sequels won't cost NEARLY as much? Consider how much the sequels will cost to produce, and bring in through sales, and then average it out. That's your total...

Also, the genre isn't the issue here. There's more than that. Unlike Uncharted and God Of War, Starcraft is a highly competitive game designed for esports. It's a game concept which will provide long term returns... not a one-time solo game liks chrysis that'll only produce sales for 6 months and then fade out from the top sales lists (even if people are still playing it, they won't be sending in any more money).

[dustinbrowder]

huge ad, but it doesn't beat the airplanes though!

[mikill]

Blizzard should put a bigger ad on the Empire State Building! That would show those Koreans!

[Progenitor]

Im liking blizzards methods of advertising. First the planes and now this!