How can Atlus be profitable?

They are releasing alot of games, but their sales are always way way below 1 million.

Persona 4 may be different but even then it took a long time to get high numbers. So I am curios how can they be so profitable, because from what I heard they are actually doing pretty good. They sell some niche products and if we compare their sales to what western publishers would expect from a game they seem to be doing pretty bad, but that is not the case, and they always turn a profit.

I know that releasing on handhelds will keep costs down, but they still have a lot of voice acting in some of the games aswell as high production values.

Demon's Souls didn't hurt. I don't know, they also have (had?) a reputation for releasing games in limited quantities. They probably turn a steady profit in Japan as well.

Japan Dev living cost

Catherine sold like less than a million and that is enough for them.

don't they have almost everything inhouse? Art, Music, VO studio, they localizes their own games.

ALSO MAKE GOOD DAMN GAMES, dont have ridiculous budgets

Maybe they are really good at budgeting games? Because it sounds poor planning shoots production costs through the roof in the case of a lot of games. They also publish a lot of games that they don't develop, which is probably more profitable for them.

Because they don't spend ridiculously high amounts of money making sub-par games.

Releasing the same games three or four times probably helps a lot. Their games are probably pretty cheap to make too and even brand new games are filled with years-old assets.

Smaller companies like NIS seem to do okay and generally sell even fewer games than Atlus. Make games on low budgets, sell at typical market prices, do a bunch of direct sales and low-cost but high market value collector's editions, shitloads of dlc or re-releases, take few risks and spread them across a bunch of games - follow these simple steps and you too could be a niche Japanese game company!

I should preface this by saying this all applies to Atlus USA as I don't know how things run in Japan.

They are just really good at budgeting.

They mostly use the same affordable voice actors for their projects.

I would assume it doesn't take too much technical prowess to change text and replace voice clips.

And probably their most valuable asset, they don't flood the market with tons of copies of the game. They don't really have trouble with used game sales. This one kind of sucks though, because if you don't buy it at launch you could get price gouged as little as 3 months post launch.

They have budgets and stay well within them. Atlus is old enough and has a small but very loyal fanbase that allows them to accurately estimate how many units they'll move and set budgets accordingly.

The reason that a lot of other console developers need everything to sell millions of copies is that to make HD, polygonal games, you need to have legions of employees that you're paying for months and months.

Have you seen Atlus games? Aside from Catherine, they've basically never had to make anything with more advanced graphics than a PS2 game. So they're saving a fortune on artists, and I assume their development costs are much lower than some other developers, because keep in mind that even selling in the high hundred thousands may work out to a profit if their development costs were only a few million.

In particular, I assume stuff like Etrian Odyssey, a dungeon crawler with 2D sprites with next to no animation (plus it gets away with recycling environment art a lot because it's a dungeon crawler) must have relatively low budget. They jump right into development because they don't exactly reinvent the wheel each time, bang out some art, then boom, dungeon crawler fans buy zillions of copies of this game that cost them probably little time and money, relative to other projects.

They probably do take a loss on some projects, but keep in mind they've been reissuing/porting the fuck out of Persona 3 and 4 (and the earlier ones to a lesser extent), and those probably sell like gangbusters, with fairly minimal time and money.

@indiana_jenkins said:

Pretty much all of this. Budgeting is super important to making decent profits.

Etrian Odyssey IV actually uses polygonal models for enemies.

@hailinel: So it does. I was still thinking of the battles for EO III, I guess.

Still, like I mentioned earlier, little to no animation (like Persona and Pokemon and so on), so all you're really doing is paying a 3D artist to make a model.

It is possible to have a profitable release for a game that only sells 100K. They just need to be smart about how distribution (lean heavily on digital instead of physical) and marketing (instead of a 'media blitz' focus on a few popular, reputable, sites and personalities).

The shadiness probably helps.

They re-use assets, and have realistic sales expectations and budget games for profit. I know that sounds strange but it works for them...

They use their assets very wisely.

Pretty simple

Revenue-(COGS+OE) = Profit

As long as your revenue exceeds your total costs, you make a profit.

Just because a game has huge revenue does make it profitable, and just because a game has low sales does not necessarily make it unprofitable.

Isn't that basically why they've switched to the handheld market? The costs to produce the assets for them are lower than going console so they can produce games on the scale of their typical jrpg without stretching more than the kind of budget they had on the ps2. Also, the audience for handheld games in japan, from my understanding, is fairly large relative to the console market.

I doubt the audience for an atlus rpg is large enough to sustain HD console budgets profitably.

Cause they can make games cheap and then they only print a limited run of them.

Many smaller Japanese developers and games are only expected to sell 100k copies in Japan and never come out in the rest of the world. Compared to that Atlus is swimming in sales. P4A sold really well for example.

Atlus seem sensible when it comes to there games, they budget for their audience and release just enough to make money. They fact they can make so many good to great games and still survive should be evident of that.

Drugs. They sell hardcore drugs.

Atlus are able to think up a bunch of great ideas to maximise profit. First they take a hit of their Persona 4 branded hallucinogenic drugs, they then decide which Persona 4 branded item they want to make next. After this they relax with a nice refreshing Persona 4 branded citron drink.

Persona 4 guys.