For the companies that do put next-generation titles out early, making a profit is tough. Namco Bandai president Takeo Takasu said his company needs to sell at least 500,000 copies of each PlayStation 3 game it creates to make a profit. Analysts predict that some other publishers will need to clear 1 million units to get in the black--and start making about $1 per game sold.

The remaining $59 per game goes into many hands. The biggest portion--nearly 45%--goes toward simply programming and designing the game itself. Then the console maker, retailer and marketers each get a cut. Add in manufacturing and management costs, and depending on the type of game, a license fee. Some gamemakers also have to pay a distributor to help get their titles in stores.

There is considerable flex to those costs. Licensing fees for companies attempting to promote home-grown intellectual property--games without Spider-Man, for instance, or NFL teams--may drop down to zero. On the other hand, games that have familiar franchises often have lower marketing costs--no need to explain to most gamers what Halo is. Game publishers who survive the first couple years of the console swap-out may do awfully well. In 2011 alone, videogame industry revenue will reach $44 billion, according to DFC Intelligence analyst David Cole. That's up from $29 billion last year.

In the meantime, publishers are sniffing around for new profit streams, such as in-game advertising. Ads inside games can bump up the profit margin about $3 per unit, according to Jonathan Epstein, chief executive of in-game ad agency Double Fusion, which has inked deals with game makers like Take-Two and THQ. Other cash-generating businesses on the horizon for publishers include subscription fees and micro-transactions for small pieces of game content sold over online channels like Xbox Live and PlayStation Network.