The document summarizes how revenue from the sale of a £39.99 AAA video game is distributed among the various entities involved in the development and distribution of the game. 30% of the revenue goes to the publisher who owns the development studio. 20% is paid as a license fee to the console platform owner, 17.5% is VAT, and the remaining revenue is split between the retailer, distributor, and marketing costs, with the developer studio receiving around 20% of the total income or £8 per copy sold.

1. FOR EXAMPLE:
Big budget ‘Triple A’ game Where the money goes
For a game that costs £39.99 in the shops
The people who If they are independent it all
make the game
Developer depends on the deal with the
Publisher - could £3 per game or
25% of what the publisher makes
GAMES INDUSTRY STRUCTURE
The developer is minus deductibles
Infinity Ward - a studio
Responsible for owned by Activision. £12.00 (30%)
the marketing The distribution was goes to the
Publisher and promotion of
handled by Activision-
Blizzard Distribution.
Publisher
the game This means the NBThese
£1.35 (4%)
publisher - Activision percentages are
- is a VERTICALLY goes to cover averages - for
INTEGRATED Marketing (which each game the
Sorts out the COMPANY* is usually done by the figures could
logistics and
Distributor
Publisher)
be different
delivery of the £0.65 (2%) goes depending on
game to retail deals made,
to the distributors distribution
and/or consumers methods,
marketing
The console/ £8.00 (20%) strategies etc
machine/format license fee goes
Platform you play your Look at the flow of
cash to the right -
to the platform
game on the advantages of owner (eg. Sony,
Microsoft, Nintendo)
being a VERTICALLY
INTEGRATED
The outlet where COMPANY is that £10.50 (27%)
company can have goes to the
Retailer consumers
exchange money
more control over
the process from retailer
for the product development to
consumer and also £7 (17.5% )goes
take a larger share of in VAT
the money
The ‘audience’ - Consumer pays
or the people who £39.99 upfront in
Consumer buy the games. exchange for the
game
*Definition: The integrating of successive stages in the production and marketing process under the ownership or control of a single management organization.