In all honesty, even 250k would be a bad figure.
Let me explain why:
- Yes, Deep Silver likely didn't lose money on Shenmue 3. KS covered half of the budget, Epic paid them a hefty amount of copies.
- Yes, not every games need to sell millions.
But the problem is the opportunity cost. For the amount invested in a project, companies often look at the prospect of which decision will make more money. Shenmue 3 made money I'm sure of it. How much is the question. And low benefits when another project could've generated more is important too.
On top of that, a project that manage to not lose money because they had a deal with Epic and money from KS is a scaring project for new partners. Why ?
Because if Shenmue IV were to be made, it'd have to be on new funds and likely more than what DS put into III because there wont be a big KS to cover up that money next time.
And when you take into account that sales next time might be even lower, this raise many interrogations for potential partners. "I can inject 4 to 5 millions into Shenmue IV, which I may not see all that money back... I can also barely make money on that game... Or I can inject 1 to 2 millions in a smaller project that might make more money".
That's what we have to keep in mind: What Deep Silver will say will be really important.
Hard to argue too much with that, but I’d see S3 as having been a low risk project from their point of view, both in terms of cost and man hours.
They seem to have a preexisting relationship with Epic when it comes to exclusivity deals and probably had a good idea how much they could make on that front. In all likelihood, that deal alone brought in more than their initial investment of $5m (give other take).
In terms of man hours, they seem to have done the bare minimum in the way of promoting the game and have relied heavily on Epic for much of the games advertising (which came in the way of significant bought media). They did pump some money into marketing as shown by the Facebook and YouTube ads, but they came very close to release and didn’t stick around for too long.
In all likelihood, DS will probably end up at least doubling their initial investment in S3 when all’s said and done.
When it comes to a potential S4, there are 3 considerations. They will probably have to invest more, there will probably be 50k-70k sales as a result of backers having not pre-purchased this time around and Epic may not be willing to put up as much (if any) for an exclusivity deal.
If (and it’s a big if) production of S4 is already happening, it’s likely that development time would be much shorter (no need for recruitment, learning how to use UE, building the game engine within UE and designing character models for key characters). A shorter production time will likely mean a smaller budget, but how much is anybodies guess.
It really depends on what Yu is asking for and whether the number of copies sold of S3 and the number of backer copies indicates that the game is likely to bring back the budget and enough profit to make the endeavor worthwhile.
Personally, I’m still fairly positive that S4 is already being worked on and could be with us within the next year.
