# V2 Market Rationale — Audience, SKU Strategy, Monetization, Break-Even

Status: planning baseline, adopted 2026-06-12. Fills the "no cost model"
portfolio gap (`V1_V7_PLAN_SET_AUDIT_2026-06-12.md` §6.1(4)) for V2
specifically, and supplies the one-mega-SKU vs separate-titles analysis the
audit found missing.

Market figures below are approximations of publicly announced numbers as
known through late 2025; they are inputs to planning, not audited data, and
**every derived figure is a planning assumption adopted 2026-06-12** with its
derivation shown. Production-cost inputs come from
`content-production-model.md`; tier definitions from
`minimum-lovable-launch.md`; licensing from `rights-strategy.md`.

Owner-roles: **FIN** Finance Director (model owner), **BMD** Brand &
Marketing Director, **EP** Executive Producer, **LOps** Live Ops Lead.

---

## 1. Genre comparables

| Title | Launch | Units (approx., public announcements) | Steam peak CCU (approx.; consoles excluded) |
| --- | --- | --- | --- |
| Street Fighter 6 | 2023-06 | ~1M in days; ~2M month one; ~3M within ~9 months; ~4-5M by mid-2025 | ~70k launch; 20-30k sustained around season beats |
| Tekken 8 | 2024-01 | ~2M month one; ~3M by ~1 year | ~49k peak; 10-15k sustained |
| Mortal Kombat 1 | 2023-09 | ~3M in the first ~6 weeks | ~30k peak (franchise skews console) |
| Mortal Kombat 11 | 2019 | 15M+ lifetime — the premium-genre ceiling | — |
| Super Smash Bros. Ultimate | 2018 | 35M+ lifetime — proof of crossover-roster pull, on Nintendo's terms | n/a |
| MultiVersus | 2022/2024 | F2P, 20M+ players at beta peak; collapsed, relaunched, shut down 2025 | cautionary: crossover IP alone does not retain |

Readings: (a) a well-executed premium fighter this generation sells **2-3M in
its first quarter and 3-5M lifetime-to-date**; (b) only MK11 has cleared 10M;
(c) crossover rosters demonstrably expand reach (Smash) but do not save a
weak core loop (MultiVersus); (d) sustained CCU — matchmaking liquidity — is
concentrated in 1-2 titles at a time.

## 2. Audience sizing

- **Premium FGC buyers, this generation:** SF6 + T8 + MK1 + second-tier
  premium fighters (Strive, KOF XV, GBVSR) gross roughly 13-16M purchases;
  de-overlapped (genre enthusiasts buy 2-3 of these), the unique premium
  buyer pool is **≈ 10-12M people globally** (planning assumption adopted
  2026-06-12; derivation: gross purchases ÷ ~1.4 average titles owned per
  buyer).
- **Adjacent reachable audience:** WWE 2K and UFC annual buyers (the
  wrestling/MMA rulesets are V2's differentiator — those audiences are
  *not* in the 10-12M pool) add an adjacent ~8-10M annual-sports-fighter
  buyers; platform-brawler casuals (Smash's 35M) are real but
  Nintendo-locked and price-sensitive.
- **Segment revenue:** premium fighting (units + DLC) runs **≈ $1.5-2B/yr
  globally** (planning estimate: ~8M units/yr × ~$60 blended gross + DLC
  tail).
- **V2 serviceable target:** a new-IP premium fighter with strong reviews
  historically lands 1-3M year one. V2's breadth pitch (MK + SF + Tekken
  feel in one SKU, plus wrestling/MMA) justifies the top of that band only
  if each shipped ruleset genuinely hits its feel bar
  (`V2/V2_features.md:208-209`). **Planning unit case: 2.5M units year one;
  upside 4M; downside 1.2M.**

## 3. One mega-SKU vs separate titles

The audit correctly flagged that V2 assumes the mega-SKU without argument.
Both sides, then a recommendation.

**For separate titles** (e.g., "V2 Duel" SF/MK-style, "V2 Ring" WWE/UFC,
"V2 Steel" SC):

1. Each SKU gets a clean identity and review framing; a weak third of the
   product cannot drag the Metacritic of the rest.
2. Smaller, sequenced launches de-risk the ~$300M concentration (§5) and let
   marketing speak to each audience in its own language.
3. Licensing optics improve: a wrestling SKU does not look like an MK
   substitute, partially softening `rights-strategy.md` §1's substitution
   problem.
4. Cert/ratings worst-case union (CERO Z gore in the same SKU as a
   Smash-adjacent pitch) is avoided per SKU.

**For one mega-SKU:**

1. **Matchmaking liquidity is existential and indivisible.** Fighting games
   die from empty queues, not bad reviews. Splitting the audience across 3-4
   SKUs fragments ranked populations below viability everywhere outside the
   top regions; one SKU pools all rulesets' players into one social/online
   backbone (one Battle Hub, one crew system, one ranked population per
   ruleset with shared infrastructure). This is the strongest single
   argument and it is one-directional — you can always *add* SKUs later, but
   you cannot merge divided player bases.
2. The shared backbone (roster, creator suite, netcode, services —
   `V2/V2_features.md:210-211`) amortizes only if it ships under one roof;
   separate SKUs each re-pay integration, cert, and live-ops cost.
3. Cross-pollination is the thesis: the WWE-audience buyer who discovers the
   SF ruleset is incremental engagement no separate SKU produces.
4. One live-service calendar and one DLC pipeline (52-week cadence) instead
   of three half-funded ones.
5. "The default fighting game" positioning is only available to a product
   that contains the genre.

**Recommendation (adopted):** **one mega-SKU, entered via the MLL ladder.**
The ladder converts the mega-SKU's concentration risk into staged
investment: MLL-0/1 is, functionally, the "separate title" (a duel-focused
core) that the separate-titles strategy would have shipped first — but
inside one SKU, so every later ruleset lands as a free major update into an
already-pooled population rather than as a new box fighting for shelf
attention. Deferred rulesets ship as headline free updates (CCU resurrection
beats, per §1's reading (d)), not paid SKUs. The separate-titles option is
retained only as a contingency if MLL-0 itself underperforms (< 0.8M units
in 6 months), in which case the deferred rulesets pivot to standalone-priced
expansions rather than free updates — a decision gate at launch + 2
quarters, owner **EP** + **FIN**.

## 4. Pricing and monetization model

Consistent with the editions already specced (`V2/V2_features.md:1503-1506`),
platform-store-native commerce + PPP regional pricing (`:1739-1761`), the
F2P-conversion-is-roadmap-only-year-2+ stance (`:1774`), and Game Pass / PS+
inclusion as a documented negotiation option (`:1773`).

| Component | Price (US baseline; PPP-adjusted per `:1755-1761`) | Notes |
| --- | --- | --- |
| Standard edition | $69.99 (MLL-2) / $59.99 (MLL-1) / $49.99 (MLL-0, with credited upgrade path) | `minimum-lovable-launch.md` §5 |
| Deluxe | +$30: Year-1 character pass + alt-costume bundle + currency grant (`:1503-1505`) | |
| Ultimate | +$50 over Standard: Deluxe + cosmetic packs + announcer/emote packs, itemized transparently (`:1505-1506`) | |
| Year character pass | $39.99 for 6 DLC fighters (genre norm: $30-45 for 4-6) | DLC fighter à la carte $7.99 |
| Partner-IP DLC fighter | $7.99 à la carte, premium-positioned | 15-30% royalty to rightsholder per `rights-strategy.md` §4 — DLC structure keeps attribution clean |
| Cosmetics | $3.99-$19.99 direct purchase; ≥ 500-item launch wardrobe (`:1046`) feeds the pipeline | **No paid loot boxes / gacha** — avoids GRAC/Belgium/NL gambling exposure and keeps the cert surface clean (cross-ref R-12, R-03) |
| Stage/announcer/music packs | $4.99-$9.99 | |

Live-service revenue assumptions (planning assumptions adopted 2026-06-12,
derived from SF6/T8-style pass economics): **35% of unit buyers** purchase
one season pass or equivalent over the first 18 months at **$40 average
spend** → lifetime DLC/MTX **net** contribution ≈ 0.35 × $40 × 0.7 platform
share ≈ **$10/unit**, plus cosmetic tail ≈ $4 net/unit → **≈ $14 net
DLC/MTX per unit sold**.

Per-unit net at launch price: blended gross ASP (editions up, discounting
down, PPP mix) ≈ **$58** on a $69.99 base → ×0.7 platform share ≈ **$40 net**
($30 net on the $49.99 MLL-0 base, blended ≈ $44 gross). **Lifetime net per
unit ≈ $54 (MLL-2) / $44 (MLL-0).**

## 5. Program cost envelope (assembled from `content-production-model.md`)

Planning assumptions adopted 2026-06-12; labor at a blended fully-loaded
**$150k per person-year** (mix of internal ~$180k and outsourced ~$100k).

**MLL-2a program (plan-of-record full launch):**

| Block | Person-years | Basis |
| --- | --- | --- |
| Content (roster 60 + 30 stages + 402 cinematic min) | 142 | `content-production-model.md` §8 |
| Core gameplay / engine / netcode / tools engineering | ~315 | 90 FTE avg × 3.5 yr (7 rulesets, rollback per R-01, creator suite, open-world modes) |
| Online services & live platform | ~105 | 35 FTE × 3 yr (matchmaking, ranked, replays, anti-cheat, telemetry — the ~50 service libs) |
| Shared art / UI / VFX / audio systems | ~120 | 40 FTE × 3 yr |
| Systems & mode design, balance | ~105 | 30 FTE × 3.5 yr |
| QA (functional, cert, network, balance support) | ~150 | 60 FTE × 2.5 yr |
| Production/management overhead | +12% | |
| **Total** | **≈ 1,050 person-years** (peak ≈ 400 FTE) | |

Cost: 1,050 py × $150k ≈ **$158M labor** + non-labor (mocap stages/vendors
≈ $8M; VO ≈ 2,500 studio-days × ~$2.5k ≈ $6M; licensing MGs ≈ $5M
(`rights-strategy.md` §4); devkits/software/build farm/cloud ≈ $15M;
localization, ratings, cert, legal ≈ $8M) ≈ **$200M development**, plus
global premium marketing **$80-120M** → **program total ≈ $280-320M, central
case $300M.**

**MLL-0 program:** content 46 py + systems subset (~60% of engineering —
no open world, creator suite, story pipeline, 5 of 7 rulesets) + QA subset
≈ **420-460 py ≈ $65-70M labor**, ≈ $85M development all-in, marketing
$35-45M → **total ≈ $120-130M.**

## 6. Break-even framing

| Scenario | Program cost | Net per unit (lifetime, §4) | Break-even units | Verdict vs comparables (§1) |
| --- | --- | --- | --- | --- |
| MLL-2a mega-SKU | $300M | $54 | **≈ 5.6M** | Above every modern premium fighter except MK11's lifetime; requires top-2-in-genre-history performance, i.e., the breadth thesis must genuinely expand the market, not just take share |
| MLL-2a, downside marketing ($340M) | $340M | $54 | ≈ 6.3M | — |
| MLL-1 | ≈ $200M | $50 | ≈ 4.0M | At the SF6 lifetime trajectory — plausible only with strong reviews + DLC tail |
| MLL-0 | $125M | $44 | **≈ 2.8M** | Inside the demonstrated SF6/T8/MK1 first-year band — fundable on genre-normal performance |

Sensitivities (central MLL-2a case): ±20% program cost moves break-even
±1.1M units; DLC attach falling from 35% → 20% adds ≈ 0.6M units; Game Pass
/ PS+ inclusion (a `:1773` option) trades unit revenue for reach and is only
rational post-break-even or as a downside-recovery lever.

**Conclusion.** The full-scope mega-SKU does not close on year-one unit
economics alone under any defensible comparable; it closes over a 3-year
tail (6M+ units plus live-service revenue), which is precisely the bet the
MLL ladder is designed to stage. The financially conservative path of
record is therefore: fund to MLL-1 economics, hold MLL-2 content
greenlights behind the velocity and netcode gates
(`minimum-lovable-launch.md` §4), and let the upside case — not the plan —
pay for the uncut vision. **FIN** re-runs this model quarterly against
production actuals and any executed license; **BMD** owns the positioning
consequences of the tier actually shipped.