Found my notes. First off, we have to assume that successful games are generally extremely polished and HQ. For this, we're making a modest game with a modest budget with a modest team.
- People
- 20 people x $50k/year (our AVG) x 1.5 years (extremely conservative) = $1.5 million on salary
- Equipment
- 20 x $15k (consoledev kit, PC, ect) = about $0.3 million
- Overhead
- salary * 50% = $0.75 million
So that's about $2.5 million for a modest game with a modest team, but do remember we're cutting corners everywhere here. Now for the next part.
- Cost of goods (remember, these are special CD's and DVD's)
- CD's: $1.00
- DVD's: $2-4
- Game Disk$12-15
- 200,000 (copies) SKU x $15 = $3million
- Marketing
- $0.5million
- typically $2-10 million
- MDF (marketing development funds) 6% of the wholesale price
So that's about $7million to make a game while cutting every corner possible. Knowing what I said above about successful games are exremely polished and HQ, this game likely isn't but lets go on and pretend it is.
Assume our game is being sold at a $40 price point and we make $15 on every game, we would have to sell 470,000 copies to break even.
Assume our game is being sold at a $50 price point and we make a $25 profit on every game, we would have to sell 280,000 to break even.
So yeah, that's a very modest example, but it's a good place to start when trying to figure out why games are so expensive and why some things are priced the way they are.
