What income models are available for Xbox games?

Question

There are number of income models available for different games on various platforms - income from ads, paid games, paid DLCs, microtransactions and so forth. What sources of income are available for developers of Xbox games (both on physical discs, Live Arcade and Live Indie)?

Answer 1

This is not an exhostive list, and will ignore some extraneous things such as T-shirts, figures, posters, etc..., and any costs will be given in US$($1 = 80 Microsoft points) for MSRP, and will discount profit margin/cut, and distributor cut (some of these must be directly negotiated by medium)

Physical Media:

considering that the average Xbox game retails for $60 these usually are purchased by the retailer in bulk (1-10 thousand at a time) up front (independent on actual sales), and distributed among locations (usually 5-10 copies per location). Keep in mind that in order to release any physical media game on the XBox Microsoft must give it a green light, and to have it placed in any store requires that the owner give permission by purchasing them.

these can have digital material in addition to the physical media (see DLC for details)

XBox live:

• A full game that is released physically (that retails for $60) can be sold over Xbox live for $40 (though these can still sell for $60 depending on several factors that I will not address here)
• A smaller game (XBLA) can be sold for anywhere between $10-$20 these costs generally do not shift to often, but Microsoft can chose to put the game on sale at their discretion.
• A game that is on physical media, download, or XBLA can feature add-on content distributed through the Xbox live market place. (see below)

DLC:

• expansion/episode/add-on: a game can feature content on the Xbox live market place that increases functionality of the game (adding locations, abilities, levels, etc...) these generally cost $10
• map-packs: these simply add maps to a multiplayer experience. they cost from $5-$10
• themes: these modify the appearance of the Xbox, while on the dashboard. these generally cost free-$15

I am not directly sure as to if there are any direct influences from Microsoft for anything beside the general game. they have the right to not allow a game to be released for their system by just a single word.

As to the actual successfulness of any of these different options that will actually very from IP to IP, and could very well be dependent on the exact game. you could probably go and find the top sellers for physical media games, and downloaded games, and probably see that some game types sell better as physical media while others sell better as downloaded games. For a time it was sited that thousands of people were buying an Xbox360 just to play Bejeweled though this most likely will have changed.

Though this might not be what you wanted to hear, but like many things in popular culture the success, or failure of a given IP, or game can be determined not on its features, development time, or means of release, but on its ability to be that "flavor of the month" granted some IP/games have more of a staying power they are still just the current "flavor of the month".