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New games under financial squeeze

Sequels, movies are recipe for fast cash

Videogame manufacturers are unlikely to make a profit on new titles until 2008, according to a published report.

According to U.K.-based media analysts Screen Digest, high production costs and long development periods are eating into profits.

The most successful business model for videogame developers is to concentrate on sequels and games based on popular films, where consumers are already familiar with the concept.

And while many game creators produce product for a variety of consoles, Microsoft is working with third-party companies to produce games exclusively for the Xbox 360. Currently, Epic’s “Gear of War” is exclusive to the Xbox 360 and selling well.

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