This isn't neccessarilly true--it all depends on the game's set budget. See, Sony or some smaller third party company could create a Sudoku app, or a Majong game for the PS3 and it could sell 10,000 coppies and still profit.
It's the bigger games that require such a huge budget (Think Resistance, MGS 4, White Knight, etc...) that will need to sell 500,000 units to profit. Though royalties and the like are part of such big expenses, those aren't the main reason. Graphics, Sound, play the biggest role in driving costs.
So, like I said--It depends almost entirely on the particular game. Red Steel cost something like $13 million to make afterall. Red Steel will need to sell something like 300,000 coppies to profit...and it's on the Wii with it's insanely low development costs. :-P
...just sayin :wink:
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