Hi-Rez CEO addresses high cost of game development

Hi-Rez CEO addresses high cost of game development
Craig Chapple

By Craig Chapple

September 16th 2013 at 12:10PM

Company CEO reveals how past titles have struggled to break even

Hi-Rez games Tribes Ascend and Global Agenda struggled to break even and make money, the CEO of the studio has admitted.

In an frank appraisal of the studio's recent history on Reddit, Erez Goren went into detail on the difficulties of making a successful game, and how the developer’s past efforts had almost driven the company to closure.

Goren said he personally funded the studio’s game development to the sum of $30 million, while only generating around $10 million in revenue from Tribes and Global Agenda.

He made the comments in a bid to tackle what he called “misinformed conclusions” about the company’s history and level of success.

“The first and most important thing to note is that MOST games fail (remember that most people tend to remember the ones that did well), SOME games break even, and a tiny number of games are very successful. That’s the nature of the gaming industry. So for every WoW, LoL, CoD, and TF2 there are hundreds of games that are dead,” said Goren.

“Global Agenda was our first game and it lost a lot of money. It was not a total loss since we did build significant technology and platforms that would help us develop our next games (Tribes & Smite). We continued to fund Global Agenda for more than a year after it was released and losing money, we continued to create content and new features but no matter how much work we did the user base kept declining.”

Hi-Rez is currently working on MOBA title Smite, which is currently in a closed beta. Goren countered claims that the company was milking players of Tribes: Ascend to fund the creation of Smite by claiming that without developing a new title, the studio and servers for its titles would have closed.

He added that despite past failures in generating revenue, Smite was continuing to grow every month, and had almost reached a profit despite not being released yet. This meant the studio was able to expand the team on the game from 15 staff to 80, while publishers such as Tencent have also snapped up the rights to bring the game to China.

“Smite is one of those rare games that’s actually growing every month, and is also profitable,” he said.

“This is allowing us to grow the Smite team and deliver weekly updates and content (from 15 people initially to about 80 people now). In addition, many outside publishers were interested in Smite and we are fortunate enough to have made a deal with Tencent who is the most prestigious partner we can have for our type of game.

“Given everything we know Smite should have a long and successful future which is why we are very excited as a company and continue to work our butts off to make Smite the best Moba game in the world.”