Analyst: Tomb Raider must sell 5-10 million to profit

Speaking to investors this week, analyst Billy Pidgeon has said that Tomb Raider must sell in the region of 5-10 million copies in order to turn a profit.

Pidgeon’s comments come following Square’s latest financial results, where the Japanese publisher revealed that the adventure reboot had sold 3.4 million copies in just under four weeks.

As impressive as that figure may seem, Square noted that the game actually failed to hit its sales target -- something which Hitman and Sleeping Dogs also failed to achieve.

"Square Enix's franchises are well established and require ever-higher production budgets to match and surpass past performance. The latest Hitman and Tomb Raider sold in the three million unit range and got Metacritic ratings above 8. Those numbers would rate as successful for JRPGs that earn more from vendors as exclusives and have manageable budgets," said the analyst.

"But for games with development budgets approaching $100 million to be truly profitable, ratings have to be above 8.5 and sales need to be in the five to ten million unit range."

Pidgeon said part of the problem lies with the increasing competition Square faces in the single-player market. However, he also noted that the publisher is also trying to survive in a climate where multiplayer games are proving to be the most popular attraction.

"The AAA market is extremely competitive," offered Pidgeon. "Most of Square Enix's franchises are single player games, which are less popular than multiplayer. Square Enix has been a leader in that sector, but now faces stronger competition from multiple publishers, both large and small, including Bethesda, Capcom, Xseed, Atlus and Level 5."

"On the positive side, the company has made investments in online, social and mobile games including free-to-play games," he continued.

"Some of these have done well in Korea, which is a very competitive and mature market, but Square Enix's micro-transaction-based role playing and collectible card games haven't performed well in Japan or in the West."

Yesterday it was announced that long-time CEO and president, Yoichi Wada, had resigned from his position with Square Enix in light of the company’s financial woes.

via GI.biz