Only the top 5% of games make a profit

People love statistics like that.

There are two possibilities that I can see.
a) this figure is a heinous lie - since if it were true there would be no gaming industry, everybody would be failing
or
b) this figure contains more than it tells you - since there are a large number of independent and not-for-profit games out there, they may be included here to bias the answer in favour of staggaring statistical conclusions

Either way, it doesn't accurately reflect the state of the gaming business, so don't take it too seriously. I don't have a link for ya to prove one way or another, sorry.

Are you worried cuz you don't think you can make a profit with your game? That kind of thinking isn't helpful at all, if you believe in your game project keep goin with it. Statistics are meant to be broken =P

As ever,
***Cosmic***

Also, on a generalized common business misconseption side note:

Saleries are costs required for production!
If you do not make a profit, but all of the employees get paid well, does it really matter?

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Original post by Cosmic One People love statistics like that. There are two possibilities that I can see. a) this figure is a heinous lie - since if it were true there would be no gaming industry, everybody would be failing

Why is that? If the top 5% of the games make enough money, it can cover the expenses for the rest of the games, and the publishers can at least break even.
I don't see why that can't be true.

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b) this figure contains more than it tells you - since there are a large number of independent and not-for-profit games out there, they may be included here to bias the answer in favour of staggaring statistical conclusions

Of course, countless games are made and sold online or as shareware or similar, and no, I don't believe they count. The 5% figure is of the ones sold in stores, I believe. That means it covers the big games, but not the huge number of tiny more or less independent ones.

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Either way, it doesn't accurately reflect the state of the gaming business, so don't take it too seriously. I don't have a link for ya to prove one way or another, sorry.

Doesn't it? It does accurately reflect that it's damn hard to make a profit if you want to make big games, but don't sell as well as Blizzard. It accurately reflects the fact that an awful lot of games *do* end up earning less than they cost to develop. Of course, it doesn't matter to the developers on the short term, but it matters because the publishers are losing money, and then they're less likely to take chances and fund *your* project. So yes, I'd say it matters, and it does reflect part of the industry today.

something tells me 5% is just to round to be true ... 4%, 4.3%, 5.4%, 8% would all be believable ... but 5% is just not likely very accurate .... it may be closer to 5% that 0 or 10% however ... which is probably true ...

and from reading game dev magazine and gamasutra, I believe it is true that the few blockbuster hits subsidize all of the other games a publisher creates (well over 90% of the big publishers' earnings come from less than 10% of their catalog ...) This doesn't necesarily mean that they don't "break even" or "make a profit", but they make so little that the publisher would gladly quit making all of the games they make if they could just pick 2 hits instead ... but they can't, so they product 50-100 games a year to make sure they have the 2-5 hits they need to keep going.

I'm sure that the 5 percent figure isn't true. I know people who are making money from selling games as shareware or even on store shelves. Just look at a website like Garagegames, their authors are making good money.