New research suggests development budgets are soaring dangerously fast
The average development budget for a multiplatform next-gen game is $18-$28 million, according to new data.
A study by entertainment analyst group M2 Research also puts development costs for single-platform projects at an averge of $10 million.
The figures themselves may not be too surprising, with high-profile games often breaking the $40 million barrier.
Polyphony’s Gran Turismo 5 budget is said to be hovering around the $60 million mark, while Modern Warfare 2's budget was said to be as high as $50 million.
The new figures put into focus concerns often fired out by the development community.
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Robert Walsh, the CEO of Australian outfit Krome, recently told Develop that game budgets are rising at a frightening pace.
“I think that’s one thing that the press, to a certain extent, is forgetting,” said Walsh in an interview.
“They’re saying sales have increased over ten percent since last year or whatever; I mean, dev costs have probably doubled or tripled in the console transition.”
Walsh’s Krome studio has recently announced layoffs across all three of its studios, citing poor sales that – presumably – failed to satisfy investments.
And me here looking for work and willing to do it for minimum wage... Its so hard to find entry level work.
Surely game development costs are under the control of game developers. Assuming that these spiralling costs are the result of keeping up with increases in hardware capabilities... it's up to the devs to step out of the rat race. In fact, it's all the new high tech features that make games run WORSE rather than BETTER on most people's machines, and new tech leads to new bugs and lower quality games.
I think if they developed just a little further behind the tech curve, the games would run better and be more stable, the player would perceive game quality as better instead of worse, development costs would be lowered, prices could come down and sales would go up.
GT5 and FFXIII have larger costs simply because these are the first iterations on the PS3. The game engine(s) have been built from the ground up and that takes time. With each new (within the same generation), the cost goes down simply because a good portion of the laborious work is done (aka, building the engine). I'd imagine whatever SE makes next (on the PS3) will utilize the engine powering FFXIII and the same goes with PD and the GT after GT5 (whenever that comes... :)
How come that a single platform "next gen" (I assume this means X360/PS3) project costs 10 million, whereas a multiplatform project can cost more then double this amount? Most of the game assets (graphics, sounds, etc) are being reused, the design costs don't double because it's essentially the same game, and even some parts of the code can be ported and not necessarily be re-written.
Not to mention the fact that game engines are being re-tooled for multiple projects now. If your first "next gen" game required building an engine from scratch and designing all your content, a big amount of it can actually be reused in a sequel (or another game running on the same engine).
This just doesn't add up.
They're clearly talking about the dev's budget here, not actual costs. $50m for a sequel using the same (tho updated) engine makes no sence at all. Infinity Ward prob has 100 employees max. Thus making 250k a year each! where do i apply?
I've never seen so much money squirted up the wall on development costs as gaming companies....in a production there is 'preproduction' then 'production', not panic redo and recrew endless.
look at all the layoffs/mergers/closures of game companies due to not recouping costs. 3 fucking years of this and when nintendo gave them an option to develop for them for cheap + larger userbase, what did they do? snub them like they did for the past ~15 years.
250K salary not.
First half the budget could be marketing. Then you have to count office space, health insurance, and payroll taxes. So if they are spending 250K per employee average salary is probably 85k, and junior QA will be making close to retail worker's wage. A senior game developer engineer will be making 130, maybe. That same senior person, given payroll tax and health insurance , equipment, software, and office square footage will probably cost 160. Of course in some companies the management will be making millions, but those companies have more games to support that president with...
The Game industry has overtaken the film industry in revenue - so why is this such a surprise? Games include cut scenes and expensive motion capture as do many movies these days. Thats not free. It's bloody expensive.
If your developing for a platform like PS3 or Xbox 360 at least you know everyone has the same* standardized hardware. Then port the game to high to mid range PCs that may or may not run them LoL.
What's the big deal about these development costs? Farmville didn't cost them $50,000,000 (all of zingas games still seem to be in Beta phase) and it runs in a browser - you can't put all video games in one basket.
New business models will and are emerging.
@ Gil.
You could be right, you could be wrong. This article is so vague that you can't take anything from it. By development budget do they mean just costs associated with making it? Or does it include marketing costs (my company those two are seperate.) Does it include the royalty payment to Sony/Microsoft which you have to pay upfront (which will explain why costs soar on multiplatform games) or not.
You can't really take anything away from this article, but Russell is right, most of those games (like MW2) had extensive motion capture etc and GT5 has likely been redesigned several times (hence its taken so long to make) so costs have soared rather than they expected to pay that much.
To add a bit of perspective, developers who create there own engines pay far more than those who rely on middleware. Also, Sins of a Solar Empire (admittedly PC only BUT features 'next gen' graphics from a technical perspective) has very rich gameplay, good graphics and is in fact less buggy than most 'major AAA' games... developed for less than $1 million.
Point proven (from a GT5 position anyway) - http://fidgit.com/archives/2010/01/gran_turismo_5_put_in_the_shop.php
I would think that the budgets are accurate enough. If you look at the SEC filings you can see that many times their costs begin to stack up when you consider other factors like not meeting deadlines. Take actually spends more money on marketing than it does in development, which I found weird. I quoted the article on the matter of budget costs (http://totisk.blogspot.com/2012/05/why-videos-games-are-expensive-and.html). Developers struggle all every time they make a game. Making the sale while used games are out on the market make their goal of reaching a certain quota ever harder.
