By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Gaming - How to stop increasing development costs?

ChichiriMuyo on 19 July 2009

Gears of War cost 10 million because they didn't account for one cent of the cost of developing Unreal Engine 3. If they added the development costs for it in, it would have gone well beyond $10 million. Comparable games from companies that build their own engines easily hit the $20 million mark. No other game on the quality level of the Gears series is even close to being that cheap to develop.

 

Also, in case you forgot we just recently learned that Crackdown failed to post a profit even after 1.5 million sales. How are comparable games supposed to make a profit at 1/3 of that number?



You do not have the right to never be offended.

Around the Network
Kasz216 on 19 July 2009
disolitude said:
ChichiriMuyo said:
disolitude said:
I don't see why high development costs are a bad thing.

High development costs = more money spent in the industry = more people getting their hands on that money in the industry and feeding their families.

Lets do some math...
Invisible walls on gametrailers confirmed this week that average ps360 game is sold to Gamestop, Walmart...etc...for 48 dollars!
And the console licensing fee for consoles is 5-10 dollars depending on the game/console.
So that leaves 38 DOLLARS! per game that goes between the publisher and developer.

According to this math, an average game that sells 500,000 copies just made 19 million dollars. I sure would hope they would invest that money back in to gaming and spend it on the people in the industry making better games...rather than spend it on Ferrari's.

Too bad that math is increadibly faulty and doesn't take into consideration packaging, shipping, advertising or a range of other costs nor does it account for the investment that went into making the game in the first place.  Only one in five games that goes to market makes a profit, and only one in 25 games that goes into production makes a profit.  That means that even IF your math was even remotely correct most publishers and developers would be bleeding money from all of the games that don't meet those sales numbers or don't get completed.

 

http://www.shacknews.com/onearticle.x/56081

 

First of all, your whole argument is this article which says that some "guy" said that 20% of started games get made and 20% of finished games make money...so 4%. Its great that you can summerize and attention grabbing article that some no-name site posted to get more online advertising.

Secondly, who says that I didn't consider the finished product. I am saying that 19 million dollars is needed to develop a game, ship it out, package it...if a game is estimated to sell 500K. That is highly doable.

Sure, some games will lose money...but consider that gears 1 cost 10 million dollars to make. You can gave great, acclaimed games that have moderate to high budgets and still be very successful. For example...even games like FEAR 2 and condemned should make money selling less than a million units across all platforms as they were made with in house engines and should sell enough to warrant production cost. Not every game made is made for more than 50 million dollars...

You do realize gears didn't really cost 10 million to make right?

They didn't coutn ANY work they put in that involved upgrading the unreal engine.

Which if your epic and you can liscence your enginge is great.  If your everyone else though.

Nor did it cost how much it would cost in money and revenue to lease it... and numerous other factors.

 



NJ5 on 19 July 2009

The engine licensing business is probably much more profitable than the game making business... which is why companies like Epic and Id Software would probably not be in financial trouble even if their games sold like crap.



My Mario Kart Wii friend code: 2707-1866-0957

Procrastinato on 19 July 2009

The publishers are already on the road to solving these issues.

(A) Digital distribution. By cutting out the middlemen (retail & distribution), net revenue will about double, assuming prices stay in the same ballpark, for the same grade of product. More income justifies more dev cost.

(B) Lots of small, cheap titles as downloadables, and only a few blockbusters in heavily cemented "stock" genres (i.e. shooters, sports, etc.)

(C) More investments in handheld titles, as handhelds really are taking off.

and something console manufacturers are doing to support small devs:

(D) Lots of appealing options for startup devs to self-publish via PSN, XBLA, WiiWare.



In the next few years, you'll see publishers *really* pushing downloadable titles, and the retailers will be up in arms over it (since it will eventually cost them their business).



 

Kasz216 on 19 July 2009
NJ5 said:
The engine licensing business is probably much more profitable than the game making business... which is why companies like Epic and Id Software would probably not be in financial trouble even if their games sold like crap.

No probably's about it.  It's supposed to be like a Million + Royalties to liscense UE3.  Or close to it.

There are dozens of games that use it.



Around the Network
disolitude on 19 July 2009

^
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



Procrastinato on 19 July 2009
ChichiriMuyo said:

Gears of War cost 10 million because they didn't account for one cent of the cost of developing Unreal Engine 3. If they added the development costs for it in, it would have gone well beyond $10 million. Comparable games from companies that build their own engines easily hit the $20 million mark. No other game on the quality level of the Gears series is even close to being that cheap to develop.

 

Also, in case you forgot we just recently learned that Crackdown failed to post a profit even after 1.5 million sales. How are comparable games supposed to make a profit at 1/3 of that number?

The Crackdown developer stated that, not the publisher.  There's a huge difference in the meaning of "breaking even" from those two very different perspectives.  You should read the thread on it.

http://www.vgchartz.com/forum/thread.php?id=80080&page=9

 



 

ChichiriMuyo on 19 July 2009

And royalties, disolitude. For UR2 they still take 3% of whole sale price minus console licensing costs. For UT3 it is very likely higher. That means for every copy you sell Epic takes a cut.



You do not have the right to never be offended.

ChichiriMuyo on 19 July 2009
Procrastinato said:
ChichiriMuyo said:

Gears of War cost 10 million because they didn't account for one cent of the cost of developing Unreal Engine 3. If they added the development costs for it in, it would have gone well beyond $10 million. Comparable games from companies that build their own engines easily hit the $20 million mark. No other game on the quality level of the Gears series is even close to being that cheap to develop.

 

Also, in case you forgot we just recently learned that Crackdown failed to post a profit even after 1.5 million sales. How are comparable games supposed to make a profit at 1/3 of that number?

The Crackdown developer stated that, not the publisher.  There's a huge difference in the meaning of "breaking even" from those two very different perspectives.  You should read the thread on it.

http://www.vgchartz.com/forum/thread.php?id=80080&page=9

 

And this is a threadt about development costs.  Thank you, and have a nice day.



You do not have the right to never be offended.

Kasz216 on 19 July 2009
disolitude said:

^
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

1 million + a cut of revenue.

Plus adjustments you need to make the engine to fit your particular game.