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.