Friday, October 13, 2006

How much does it cost to make a game?

There’s quite a range of games being made. A simple flash game might take under one man month to develop all the art and code, whereas a high-end console game could take in excess of 2000 man months across all departments (e.g. 100 people for 20 months). If a game can generate a profit that covers the cost of development, marketing and publishing, then it is in one sense, a success.

I’m not very familiar with the money end of game production, but lets make up some quite inaccurate numbers for fun. Lets say that the average worker costs $60,000 per year. We’re working on a 1000 man month project. This means that the salaries for the team add up to $5 million. Then we add a marketing budget of another million. And lets throw another million on for things like publishing, middleware and recording of music and voices. So in total this makes $7 million. I think this number is in the right ballpark, but many games will have a far higher budget, and the trend towards more and more impressive games keeps on pushing it up higher.

If the game is selling in the high street for $40, let’s say that half of that money makes its way back to the publisher (I’ll treat the publisher and developer as one entity for simplicity). That means we need to sell 350,000 copies before we start to make a profit.

I don’t have a particular point or statement to make, I just like throwing numbers around and explaining roughly how things work. You can see from the above that developing large scale games is a risky business. There’s potential for a lot of money to be made if you have a hit, but it’s expensive to build the game in the first place, and if you fall short of the numbers then you can fail to make back your millions.

Working on small-scale games on the other hand gives less risk, and generally speaking, less potential rewards. This said there’s a lot of interest in casual games these days and money being made.

One thing I like is that there’s quite a large spectrum of games being made – cell phone games, hand held consoles, next generation console games, Xbox360 Arcade games, serious games and casual games. It means lots of different niches for different groups of companies, rather than everyone just trying to make high-end console games.

Note: This post contains a lot of made up numbers. They’re just rough guesses built up from working at a few different companies.


Envy said...

Thanks for writing this article.

I wondered how it is for people who make these games. It seems so hard, sooo HARD to make your money back in this industry.

You go to a video games shop and look at their title rack for PS2 games which sell for less than $2. These games can go for $0.01 on Amazon. You wonder how much it cost to make these games man.

Mark Pope said...

Most boxed games don't make a profit, then some break even and some are break out hits.
Publishers rely on having a few hits to make up for the ones which don't do so well.
You're right though, it's not an easy industry. Big publishers like EA and THQ have been cutting back / closing studios over the last couple of years.
There's a lot of evolution going on though too - the resurgence of PC/online gaming, iPhone, different business models like 'free to play, with micro transactions' etc.
There's still going to be room for big publishers doing expensive boxed titles, but there's a lot of other stuff going on too.
You're right though. It's not easy. :)

Kamil S. BAJDAK said...

I just would like to know hom much could cost remake (a new game engine, reproduced starnard locations and added new ones, much updated graphic, a new part (continuation) with new locations and opportunities, license, etc.) of old platform games such as Oddworld and Rayman?

An example of remake:

Mark Pope said...

It's hard to say. The example video is for a fairly simple 2D scroller. Some of the main areas which will take time are the game code, the tool pipeline for building the levels, and all the 2D art required.
A big variable is what kind of engine you're starting with. You might start with a game engine and 2D map editor which allow you to just work on the game part from early on, or you might write the whole game and tools from scratch.
I'd take a wild guess at a game like that taking 3 programmers, 3 artists and perhaps 2 designers for 9 months. So about 6 man years. Multiply that by the average salary (I guessed at $60K above, but that might be low.) and that would give $360K.
This said - often indie games will be made by people working for free in the hopes of getting rewards later, so while it still costs a lot of time to build, it may not cost a lot of dollars.
Again, all this is 'finger in the air' stuff. The individual situation of the team and game makes a big difference.

Mark Pope said...
This comment has been removed by the author.