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Why Video Games Cost So Much To Make

Video game publishers are notoriously secretive about the budgets behind their games, but when a number does slip out, it can be shocking. Games like Call of Duty and Grand Theft Auto cost hundreds of millions of dollars to make, which is tough to fathom—until you do the math.

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ABizzel162d ago

$10,000 per person, per month.

Team of 100 devs over 24 months = 100* 24 * $10,000 = $24M budget

Rebel_Scum62d ago

To be fair it doesn't exactly work like that. In the beginning you wouldn't have 100 developers coding as the framework wouldn't have been developed yet. Developers would be added as the project rolls along.

Muadiib62d ago (Edited 62d ago )

I hope they're not paying them that much.

I know for a fact that most of the AAA gaming budgets go towards marketing, I never felt right about that. Surely the majority of the money should go towards the actual product itself, if it's good then the word will get out, I suspect if they didn't spend so much marketing the game, the sales lost would still add up to far less than what they spend on marketing.

It's not like they have to stop marketing either, much more creative and clever marketing would probably reach as many, as it can go viral pretty quickly and we all know that the internet will market things for you for free if it's interesting and original.

But I guess throwing lots of money at it is easier than being creative and original. This could apply to Hollywood as well.

dcbronco62d ago

It depends on the game, developer and engine. But big titles have big TV budgets. But only the big titles get the huge advertising budgets. CoD, GTA, Halo get huge budgets. Others are somewhere well under those.

Palitera62d ago

You think you know. It's very different.

agent453261d ago

Agreed but it is also spent on actors (with the whole mocap technology) which give their likeness and their voice.

Muadiib61d ago

OK, maybe I should've said "...with some AAA Publishers, the majority goes towards marketing...". I'd like to know how many are doing that and at what ratio. I'd like to pay my money to those that are not wasting my money thank you very much. That kind of wastefulness will bring down the whole industry if left unchecked, that along with the fact most of the top companies seem to be morally and creatively bankrupt..

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ChickeyCantor62d ago

>$10,000 per person, per month.

That's some high tier pay grade and only upper ranks get close to that.

1nsomniac62d ago

Stop letting the gaming industries propaganda make you look like a tit!

The indie phenomenon is bigger than ever. You have Mark Cerny & some of the other biggest names in the industry all saying how much cheaper it now is to develop games at developer conferences. Never has there been as many free development engines available to all. Digital is taking off so you're not actual buying anything physical you're only really renting. You've got modders creating games that are financial phenomenons.

If activision want to pay insane money to Conner mcgreggor & so on to star in their games that's their idea of successful business because they make such massive profit. Other companies like EA & Ubisoft we all know are crooks & speak shit so why do people believe all this rubbish. It's costing them less & less but they're charging more & more. It's just greed like any other company these days!

Big_Game_Hunters62d ago

Of course Cerny would be saying that, he doesn't have to pay some 25 or 30% of every game sale to the console manufacturer or online distributor. on top of shipping and retail costs. Why do you think EA and Ubisoft try to make games exclusive to Uplay or Orgin on PC whenever they have the chance?

Rebel_Scum62d ago (Edited 62d ago )

"Costing them less and less but they're charging more and more"

Got any evidence to back up that hyperbole?

For me games have never been cheaper. I used to pay $180-220 for a new Megadrive game, $120-140 for a Master System game. Nowadays new games are around the $89 mark. The change in moving from cartridge to disc format made things cheaper but the development teams got larger.

Video games are expensive to make. I think you forget that whilst these teams are making games over a few years, they aren't making money. Cerny saying it's cheaper to make games is not taking overheads into account, he's merely talking about the tools required.

agent453261d ago

But today gamers pretty much test the game via private/public betas, early access crap. Gamers market/hype games indie or AAA games via youtube, Skype, Twitch TV, etc. Gamers review games for free via steam, YouTube, Skype, Twitch tv, etc. Modders free of charge or through donations have made vanilla games into masterpieces. This leads to lower costs for making games; cryengine, unreal engine, etc. are free of charge. With the rise of digital no more manufacturing costs, transportation costs, factory overhead, etc. are out the window. The issue is a combination of greed but more importantly game developers have been unable to keep up with technology. Only during the midnities and early 2000 console games were at its cheapest price ever with map editors, free unlockables, mini games, alternate endings, multiple paths, etc. Now consoles are as expensive or equal to the NES, SNES era if microtransanctions, DLC , pay to play online is added. On PC while there is microtransanctions and DLC available, mods make DLC/microtransanctions irrelevant and not worth the cost. This explains Bethesda and the gaming media at large to put an end to free modding because it creates profits/revenue. ....

Rebel_Scum61d ago

@agent4532: This is dumb I can't just reply to you directly or tag you but whatever.

Those engines you mentioned are free but that is for the basic version. To get the "professional" edition for some you have to pay per user for a license. And for some once your game is a commercial product depending on the license you may have to pay royalties for the engine. So yeah...not free.

Pandamobile62d ago (Edited 62d ago )

Yeah it's cheaper to make a small or medium size game, but AAA games require immense amounts of manpower to produce before you even factor in marketing and distribution costs. Look at Uncharted 4 for example, there you have a game that probably has 150-200 people at Naughty Dog working for 2-3 years. Then you have to factor in external contractors (UC4 had 34,000 animations that needed to be planned, shot in mocap, refined, implemented and polished. 5-6 hours of interactive scenes, and 2.5 hours of cinematic cut scenes. They had 30 animators in house, and had a contingent of up to 44 other animators off site at Sony San Diego). Assuming their animators are paid fairly well, on a two year project your animation budget is going to be around $10 million just for staff.

Then you add up the other teams that make up a game production, add the cost of running a studio, external costs like marketing and it's not hard to see how games can end up costing upwards of $50 million.

Palitera62d ago (Edited 62d ago )

So you think a game like Uncharted, The Witcher or any contender to GOTY is doable with free stuff?

Lol at your admirable ignorance if so.

PS: try do a little good game, just once, and then you talk again about how easy it is to do something even remotely decent.

Pandamobile62d ago

That's not what I said at all. I was talking about Cerny's assertion that it's never been easier or cheaper to make a game. Anyone with the will to do so can make a game nowadays with free tools. Most of the barriers that existed 10 years ago have been torn down, so now literally anyone in any corner of the planet can create a game and publish it to the internet.

Also I found your little dig pretty amusing considering I've worked on AAA games. I am well aware of the complexity of developing both hobby projects and multi-million dollar productions.

Palitera61d ago

My answer was to the simplistic view of Insomniac, bad reply click. I pretty much agree with your pov.

agent453261d ago

There is no need for 150-200 people to make a AAA game. Is a waste of labor costs. Really 50-100 people can make any AAA game. Poor management and budgeting has kept making games expensive. I get it tv ads and billboards get the game more recognized but is expensive. The tech demos and cgi trailers don't help either because if the game doesn't look like it, gamers will complain or worse sue the gaming company for false advertising. There is a US law that the advertisement for products/services must be true. Gamers already advertise the game anyway for free via social media. That's one less cost to worry about; if gaming goes full digital game developers/publishers gaming costs will be even lower. That will mean the end of factory overhead costs, manufacturing costs, transportation costs, etc. That will mean $30-$40 per game. No more $60.00 games......😊

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Fist4achin62d ago

Well they are definitely a huge entertainment medium and I would say a lot of games are better than the crap movies being released. I kind of miss when there weren't movies coming out weekly and they actually took their time to put something of quality together. I'm always willing to wait and pay for my entertainment as long as it is good.

Emperor62d ago

Great games can be made for nothing more than the living expenses of the developers, plus some extra for basic software.

LandoCalrissiano62d ago

120 grand a year being an average developer?! That is hella high.

Palitera62d ago

AAA teams have some of the best programmers in the world. It's HARD to reach the level they're at.

LandoCalrissiano61d ago

They do have them, but I'm talking about your average dev. Your run of mill guy. This said the average cost is 10g which means the really good devs get paid more than that.

Pandamobile62d ago

That figure accounts for all the overhead of running a studio, meaning the cost of the building, the cost of licensing software, etc.

The average salary of developer is like half of that.

LandoCalrissiano61d ago

According to the article and top comment the licensing and other costs aren't yet included. They both said 10g per person per month.

Pandamobile61d ago

It says right in the article that that figure accounts for salary plus studio overhead: "That number—which might go even higher if you’re in an expensive city like San Francisco—accounts for salary, office rent, insurance, sick days, equipment, and any other costs that come up over the course of development."

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