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Are Game Development Costs Set to Spiral out of Control?

Dealspwn writes: Last week we learned via a Eurogamer interview, that 2013’s Tomb Raider reboot only started to make a profit nine months after its March release date, despite selling 3.4 million copies in its first three weeks. If it takes that long for a game that good that sold that well to actually make money, how long can companies afford to make similar blockbuster big-budget games?

Tomb Raider’s budget was reportedly around £60 million ($100 million), which is probably why Square Enix set their sales targets so high (5 million units) in the first month, which would have seem them move into the black straight away.

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retrofly1399d ago

Set to? They already have.

badboy7761399d ago (Edited 1399d ago )

I call BS because didn't Microsoft help fund this game? Meaning Timed DLC and Exclusive Xbox 360 Tomb Raider Commercials.

Soldierone1399d ago

According to all the comments and statements I read, it was pretty much BS in a sense.

It was "making money" but not enough, so Square was downplaying it because investors were not happy with them. It made money, it just wasn't hitting outrageous goals Square had to make investors happy. They even wanted a brand new IP to sell this much, and were shocked when it didn't....

TomShoe1399d ago

It seems that rising game development costs is signaling the rise of Indies and Multiplats.

Most independent studios can't afford to produce exclusive games anymore unless given funding. That means more series will be going to multiple platforms. That's good in a sense, since no one will miss out on great games just because of what console they chose, but it makes exclusives even more important when it comes to defining a specific console's appeal.

1399d ago
zeal0us1399d ago

Well the cost of development have already became enormous compared to 10-20 years ago. However some of these publishers are not using common sense and poor management is to blame for games not meeting sales expectations.

Why would any publisher expect a reboot to sell 5million within the first month? Not only that but why give a reboot a high budget?

KonsoruMasuta1399d ago

When you reboot or make a new IP, you would usually put a lot of time and money into it to show off high production values and bring people in. And it's not like it's a new IP or a reboot of a IP nobody remembered. It's Tomb Raider, everybody know what that is.

The only mistake Square Enix made was setting their expectations too high. The game was profitable and made them money, it just don't make what they thought they were going to make. But the first game was in no way a failure, as they want you to believe. If it was, they wouldn't be making the sequel.

3-4-51399d ago (Edited 1399d ago )

Dev's listen up:

* Take your $100 million budget and split that into 4 games @ $25 million a piece.

* 4 Brand New IP's

* If you fail either way, you've wasted the same amount of money.

* If you succeed, in the first scenario, you are only pushing one IP forward.

* If you succeed with Option #2, you have now given people 4 new IP's to get excited about.

* One will take off more than the others and that will be the one you invest more in for a sequel.

* You've now just done in 3 years what takes others 10 years to do.

Introduce 4 new IP's.

Seriously somebody try this out. It will give us all the new IP's we want, and the Dev's can potentially find more new Franchises to make a ton of money off of.

It just makes too much sense for this to not have happened already.

* You make RPG's ? Cool, go make a SRPG, Turn Based RPG, Action RPG, and one that combines them all.

* You could then get more experimental, without having to risk your brand or popular IP.

Why isn't this happening ??

bass4g1399d ago (Edited 1399d ago )

It is. That's practically ubisoft's business model. They then annualise any new franchise they create so we can't have everything.

Shnazzyone1399d ago (Edited 1399d ago )

The crash is sadly coming. There's more incredible good games than any one person can play. We're very close to market saturation. People expect more and more. The good news is maybe we'll finally hit a point where gaming can plateau at a standard in graphics expectations that is affordable to make on. Then we'll finally have innovation in gameplay and story as a higher prerogative than how much better it looked in polygon numbers.

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DigitalHope1399d ago

Makes you wonder if/when the cost of buying a game is going up.

mydyingparadiselost1399d ago

Prices have already gone up just not on the MSRP. Between paying for online access, DLC & micro transactions the cost of getting the full package has definitely increased.

DigitalHope1399d ago

In a way yes but when does the cost go higher on the up front cost.

wonderfulmonkeyman1399d ago

I think it depends on the studio and the kind of graphics the games use.
I've noticed that a lot of games that go for photorealism have higher budgets lately. I don't think that's a coincidence.

rageus1399d ago

It's mostly due to overinflated marketing budgets. Payday 2 was making a profit before it was even released.

erathaol1399d ago

My conclusion on the issue is that the cost of games will grow as to accommodate for competing with games that turn in revenue worth risking high budgets.

Meaning if games can make 1 billion dollars, like GTA V, well your going to see companies aim at that target with everything they have.

Its worth pointing out that video games is a growing industry as well, while we may see some huge losses, we see huge gains as well.

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