^
Correct me if im wrong, but I read that Unreal engine 3 is 1 million to license. Also you have to get resources devoted to familiarize yourself with the engine. So lets say if Gears was developed by someone else, it would have cost 13-14 million. You need a great game idea, good efficient development team and some luck...and your studio will be just fine in the industry.
The only other aspect not covered here is advertising budget. This can be quite high...but consider that halo 3 advertising budget was 10 million. And that is considered the most advertised game this gen... Most games meant to sell under a million units don't even have million dollar advertising campaigns. I work in online advertising btw and see budgets for some games handled by my agency... Its peanuts compared to established brands like VW
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