Next-Gen Development Costs

[shams]

The figures are really hard to know - and vary a lot. As someone mentioned, if you want to - you can spend any amount of money (i.e. more than needed), developing any game for any platform. Red Steel is an extreme - Im glad Ubisoft choose to R&D so much (trips to Japan, etc..) but I think a lot of it was overkill. Im sure Rayman cost about half (maybe less) to develop. Gears of War is another "extreme" title - whenever a tech provider creates a game, using that tech - its a LOT cheaper than for another studio. And its not just the cost of licensing - familiarity with the tech, being able to extend it (etc). ... The profits per unit sold are also WAY off. Firstly - there is NO correlation between development costs, and the publishers costs. Marketing is a HUGE part of the budget (usually the most). There are also various other costs that have nothing to do with development. Manufacturing costs I believe are around $6-$10 / unit (no idea of costs / machine). Note that this isn't actually WHAT it costs, just what the manufacturer charges (i.e. Sony, MS). There are also a bunch of other costs - legal, freight, testing services, in-house marketing, packaging/labelling (etc). For a $50US title - retailers usually buy this at around the $28-$33 mark - this varies. They want to make a profit as well ;) Games that start getting expensive also go through a wholesaler or importer - especially for imported (etc), or even 3rd-party titles. So... say it costs about $10US to manufacture/ship a unit. And they sell it to a retailer for $30 - that is a $20 margin. Developers usually operate on "work-for-hire" - that is, they get paid a fixed amount to develop a title for a publisher. For big games, this can be any sort of amount - 1-2mill up to 20-30mill. For companies like Ubisoft (Red Steel) - they OWN the developer. So its a lot cheaper - everyone gets paid a salary, and development budget is much smaller. So 12mill for a launch Wii title is fairly reasonable - includes R&D, and other components. Not sure if they share tech through the company(possibly). For a big title - Gears of War lets say - MS probably paid them a shiteload of cash ($10-$20mill?), and may also be offering them a royalty stream to keep them happy (no idea really). ...just wanted to share.