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sc94597 said:

$20 million isn't that little when you consider how short Pokemon game dev times are and how many staff FTE exist at GF. 

Suppose that the average employee who touches the game works on 10th Gen Pokémon for about 1.5 years (makes sense for a 3- 4 year dev cycle between main gen releases.) And let's assume the average labor cost per employee is ~$50,000 (+40% average Japanese salary of around $35,200 USD.)  

That would be $75,000 per employee for the game. At ~200 employees  about $15 million dollars. 

But realistically we would probably have to estimate only something like 60-80% of GF employees touch the game sufficiently.

That's about $9 million - $12 million. 

Labor is the overwhelming bulk of the non-marketing cost of developing a game.

Now if they spent an average of 3-5 years FTE on the game, it would approximate the typical game budget of an AA title $27 million - $60 million labor costs. 

Or Game Freak could double in size, but in aging Japan that is easier said than done. 

Or Game Freak could outsource a lot of work to vendors or other development studios, and we're seeing some of that with leveraging Monolith. 

The real problem is that a mainline Pokemon game should probably have a 5-6 year dev cycle rather than a 3-4 year dev cycle. But given that most of the profits come from merchandising that depends on more rapid releases, I don't think we'll see that. 

Edit: Comparing to American studios or studios with a lot of American staff of similar size probably isn't realistic because labor costs are likely double in the U.S what they are in Japan (mainly because of low inflation in Japan since the lost decade.) 

For Pokemon Sword:

Full production began in September 2017. Approximately 1,000 people from multiple companies were involved in the development, marketing, localization, and public relations. Around 200 Game Freak employees worked directly on the games, while about 100 Creatures Inc. employees worked on 3D modeling. An additional 100 worked on debugging and game testing

https://www.polygon.com/interviews/2019/10/24/20929597/game-freak-explains-the-1000-staff-missing-creatures-and-leek-size-of-pokemon-sword-and-shield/

For 400 full time employees across QA, developing and modeling for 18 months is already close to 30 million, even if they are on average paying as low as 50k USD yearly 

Don't know how they managed to keep mainline budgets around 20 million. My only theory is some of their development is outsourced, and they are hiring the cheapest labour they can possibly find