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Slimebeast on 10 January 2009
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Squilliam said:
jammy2211 said:
A break down of where someones $49.99 / $59.99 purchase of a retail game goes and how much retail, publisher, developer, production costs go to.

A better idea of how much games cost to develope would be useful too.
  • 25% (aka $15) goes to pay the art and design guys. = developer
  • 20% ($12) goes to pay the programmers and the engineers. = developer
  • 20% (also $12) goes to your friendly neighborhood retailer. EB / GameStop, whoever.
  • 11.5% ($7) goes to a "Console Owner Fee" - ie. whichever one of the Big Boys made your hardware (Sony, MS, Nintendo.)
  • 7% ($4) goes to marketing, and puts Mad World and Marcus Fenix on MTV.
  • 5% ($3) goes to "market development" -- paying for cardboard Standees of the Gears Crew and elbowing other games out of the way for shelf space at your local retailer.
  • 5% ($3) goes to actually manufacturing and packaging the disc.
  • 5% ($3) is spent paying the Man for IP licenses or maybe hiring some big name voice actors. If your game isn't an original IP, here's where you get dinged by Marvel, Disney, or Ray Liotta's agent.
  • 1.5% (just $1) goes into the publisher's pocket.
  • 1.5% (also $1) goes into the distributor's pocket.
  • 0.3% (about 20 cents) goes into corporate costs. Management, overhead, lawyers, etc.
  • 0.05% (less than 3 cents) go into the cost of paying for the Developer's Hardware. Who knew an SDKs can cost tens of thousands of dollars?

And there you go. $60 of Gears, a la carte. http://www.1up.com/do/newsStory?cId=3156044

 

 

 That breakdown is bullshit. At best it can be applied to the spicific game Gears of Wars with very important details we don't know - such as an explanation about the ridiculous low amount of money that goes to publisher and distributor (did Epic as a developer get a spectacular deal?).

I've heard that it's much more common with an economic model where the developer gets funded by a publisher, has a set budget to create and deliver a game, but then doesn't get much royalties at all from game sales.

Let's imagine a case where the developer of a specific game isn't owned by the publisher.

Let's say their game had a budget of $30 million.

Scenario 1:

It sold 1 million copies, in this case all of that $28 developer/publisher headroom would go to the developer.

1 million x $28 = $28 million which is < $30 million, (which means game didn't break even):

developer gets $28 per copy, publisher gets $0 per copy (and actually lost $2 mill on the game).

Scenario 2:

Game sold 2 million copies, which was target goal when the deal was made between the dev and publisher (and the budget was set).

dev gets $15 per copy, publisher rakes in the rest which is $13 per copy

Scenario 3:

Game sold 3 million copies and a dev bonus comes in effect (= developer gets royalties):

dev gets $12 per copy (3 million x $12 = $36 million, means dev made $6 mill profit), publisher gets $16