Study Claims Average Game Budget Is $23 Million

Study Claims Average Game Budget Is $23 Million

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An independent study claims that the average cost to develop a AAA multi-platform game is around $23 million.

M2 Research is an analyst group which specializes on reporting statistics for the videogame industry. According to Develop, M2 Research released information stating that the average budget for a multi-platform next-gen (meaning current generation) game is between $18 million and $28 million. A single platform game is reported to cost an average of $10 million, according to the same study.

Many high-profile titles cost more than that, with budgets as high as $60 million. Develop points to Gran Turismo 5 costing almost $60 million and Modern Warfare 2's budget of almost $50 million.

Taken by itself, this information is fairly innocuous to the regular gamer. What is important is how the rising cost of making games can ripple throughout the industry. With budgets soaring like this, it is clear why the price point for games is also rising. If the trend continues, we may see games costing $70 or even $80 in the near future.

Why are games costing more? Time is an important factor, which is connected to the rising cost of skilled labor. In the infancy of the gaming industry, coders, programmers and artists were happy to be working on games at all and so they were willing to accept low pay and/or incredibly long hours. Now that labor conditions have generally improved (Rockstar San Diego excluded), that means that labor costs have also gone up. Also, the amount of time and effort needed to make games look polished in this current generation has also gone up.

Not all of this is grim news. As different sources have pointed out, games are generally of higher quality than they were ten years ago. The rising budgets of games just proves that all of that quality is not cheap.

Source: Develop

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What was Bayonetta's budget? because they have some filmstrip cutscenes, and I want to know if it was budget issues or if they were going for a style with them. Because they're actually pretty cool to watch.

OT: Wow. I don't think we should spend that kind of money. Makes it harder to risk making new IPs like Mirror's Edge and to get a profit.

oh ffs, we are in the middle of a recession, i will rather have games with less impressive graphics and afford them rather than knowing that there are super pretty games out there i can never afford.
also

Onyx Oblivion:
Wow. I don't think we should spend that kind of money. Makes it harder to risk making new IPs like Mirror's Edge and to get a profit.

that is so true, and while i didn't enjoy mirrors edge at all, its sad that new ideas will be rarer because off all the extra eggs in the basket (i really love that metaphor).

swaki:
oh ffs, we are in the middle of a recession, i will rather have games with less impressive graphics and afford them rather than knowing that there are super pretty games out there i can never afford.

To be fair games are still rather cheap, there wasn't a real increase with price from the previous gen to this one (xbox --> 360 gen). Going by my experience 40 is sitll the maximum charged for a new game (with some going over, e.g MW2) and I'd say its safe to say the content of the this games has "improved." By improve I just mean more stuff their (whether you like it or not is irrelavent it's still there), such as better voice actors (in some cases), online features (main change), improved graphics and physics engines

I'm actually rather curious if the budget increase is primarily a result of the rising cost of labor, or if it has something to do with the level of detail having to go into every aspect of a game these days. Obviously a game today has a much higher poly count than a game 10 years ago. On the other hand, it's also much easier to create said models than it was 10 years ago.

I'm guessing it's probably a bit of both, although the one other major factor that nobody ever mentions is inflation. I'm honestly surprised we haven't already seen games go up another $10 in the US.

Increasing the price constantly will just increase the number of pirates, thus decreasing profits even more. So they are going to need to find a way to keep prices down.

Thats alot of money o.o Well, I suppoe big business these days so it cant be helped but Jesus!

Average cost of a Hollywood movie is more than $100 million
http://news.bbc.co.uk/1/hi/entertainment/3564377.stm
Bear in mind that the article was written 5 and a half years ago so it may have gone up (I don't know much about the costs of movies, could be that new technology cost = the cost of old technology when it was new, though that's probably false)
Movie ticket = $8 or $9 if I'm converting correctly
Game cost = $60

Sort it out.

Oldest fallacy in the book is that if you want in increase revenue you increase prices... it simply doesn't work that way. If prices go up less people will buy the game at launch price; a higher proportion will rent, buy pre-owned, wait for a cut price re-release (Platinum/classics range) or even pirate the game which is becoming a serious problem for consoles too.

The proportion usually goes down so much that net revenue from sales go down overall, then there is a chance of entering a vicious cycle of increasing the unit cost even further to recoup lost revenue.

Each game disk is cheap to print, the problem is getting enough people to buy at launch price but really how many people have $60 or 40 to spend on a game and how often do they have that much money? Especially spending on a game that may turn out to be over-hyped crap.

I can guarantee you if games sold at half their price I'd buy more than twice as many of them!

I know when Steam had it's major blow out sale I went insane and must have spent 10x I had ever intended to spend and got games I'd likely never have gotten at their normal price.

Dudeakoff:
Average cost of a Hollywood movie is more than $100 million
http://news.bbc.co.uk/1/hi/entertainment/3564377.stm
Bear in mind that the article was written 5 and a half years ago so it may have gone up (I don't know much about the costs of movies, could be that new technology cost = the cost of old technology when it was new, though that's probably false)
Movie ticket = $8 or $9 if I'm converting correctly
Game cost = $60

Sort it out.

That's pretty moronic logic...even a linear shooter lasts you around 6 - 8 hours through a single playthrough - not including online. Even then, you can constantly re-play your game - you'd have to buy a new move ticket...you're getting pretty good value for money with that game of yours - especially if it's an RPG.

And people wonder why game companies don't take risks by making lots of new IPs.

archvile93:
And people wonder why game companies don't take risks by making lots of new IPs.

They don't take risks because most game companies that have a successful series want to keep making money. Therefore keeping a series alive. (E.G. That tortured overused example, Halo.)

Edit: Oh wait, sarcasm? Sarcasm is hard to tell with text. x.x

I'm not surprised. I really think this ties into the industry's obsession with shiny, realistic (read: brown) graphics, which need both more experienced programmers and artists to render.

Higher quality games (graphics) = more moolah. Usually also means shorter games....

I think they will run into a price ceiling, or companies will only make a AAA title once or twice a year just to sell consoles and push indie games the rest of the time.

Greg Tito:
The rising budgets of games just proves that all of that quality is not cheap.

And unfortunately, often very little of the budget goes to quality.

Gaming's still one of the best bangs for your buck when it comes to time-wasting. With the advent of multiplayer, it's only gotten better. The real concern is not how much it's going to cost us, but how it limits creativity. Even then, if I get Mass Effect's and Uncharted's coming at me a few times a year, I'm happy.

that's a lotta dough

The_root_of_all_evil:

Greg Tito:
The rising budgets of games just proves that all of that quality is not cheap.

And unfortunately, often very little of the budget goes to quality.

amen to that

wow. High end video games only cost 1/4 of a high end film, and they are usually 5-10 times longer than a movie. Imagine what a game would be like if a company poured all the talent and technology of a high-profile film into a 2-hour game...

Short game, but I bet it would be dynamite, gives me the shivers.

lolwut

1. Quality over quantity.
2.I don't need super pretty graphics.
3. Why did you have to set my expectation so high for the graphics in first place, I remember when halo 1 looked like most realistic thing ever.
4. Well no one is gonna experiment with the amount of money it might cost.

Jesus Christ, it cost IW $50mil to make MW2 and they couldn't make more of a campaign or at least more MP maps? I honestly feel bamboozled. This really makes me not want to buy a new game.

if games cost $80 id be happy, in australia i'm currently paying between $100 to $120 for a ps3 game and around $90 to $100 for a pc game.
and since the excahnge rate for USD to AUD is damn close its not that.
$80 USD = $86 AUD

but i bet most of that money goes to maketing. (Dante's Inferno anyone XD)

Wait a sec. Let's do some math really quick.

Therefore, if these reports about how much it takes to make a game are true, I'd say there is some price gouging going on. Maybe not so much in America, but certainly in other countries.

Low Key:
Wait a sec. Let's do some math really quick.

Therefore, if these reports about how much it takes to make a game are true, I'd say there is some price gouging going on. Maybe not so much in America, but certainly in other countries.

To toss some more numbers at you. you have to sell your game to a middleman in which I assume you getting no more than 60% of the 59, you have to print disc, then you have to pay MS and sony a royalty. All in all your getting at most half of the 60, then you have to sell 750k copies to break even.But wait you have to advertise your game. No idea what it cost to run ads on IGN, escapist, and Gamespot, but for a primetime slot on the week before your game releases (122k for the big 3) then you do this on 3 channels ESPN, ABC, and G4tv for 3 days and your looking into the millions, then you have material support for your game, showing at all the gameshows, tokyo, e3, PAX, etc. Suddenly your game has to go Gold (or whatever they call going over a million) to even break even.
Just to add to your salary considerations, you have to pay a staff for 2-3 years till your game gets finished.

sneakypenguin:

Low Key:
Wait a sec. Let's do some math really quick.

Therefore, if these reports about how much it takes to make a game are true, I'd say there is some price gouging going on. Maybe not so much in America, but certainly in other countries.

To toss some more numbers at you. you have to sell your game to a middleman in which I assume you getting no more than 60% of the 59, you have to print disc, then you have to pay MS and sony a royalty. All in all your getting at most half of the 60, then you have to sell 750k copies to break even.But wait you have to advertise your game. No idea what it cost to run ads on IGN, escapist, and Gamespot, but for a primetime slot on the week before your game releases (122k for the big 3) then you do this on 3 channels ESPN, ABC, and G4tv for 3 days and your looking into the millions, then you have material support for your game, showing at all the gameshows, tokyo, e3, PAX, etc. Suddenly your game has to go Gold (or whatever they call going over a million) to even break even.
Just to add to your salary considerations, you have to pay a staff for 2-3 years till your game gets finished.

If you take a look at my noted comment in the spoiler, you'll see that I did take into account the licensing fee, marketing, and pressing of the game. I don't know how much the middleman would make from selling a video game, but I can't imagine it makes it out of the low single digits per unit. Gamestop makes most of their money from used games, and places like Target and Walmart make much more money on other stuff, which is why they only have maybe a rack or two in the store.

They spend that much money and most companies can't even hire a decent writer?
Or good voice actors?

Most of the time they spend it trying to make the prettiest graphics.

It would be interesting to see what would happen if they focused more toward better story/gameplay than better graphics.

Because if sales numbers of consoles are any indication. No one gives a damn about the prettiest graphics.

If they did, the Wii wouldn't be stomping the 360/PS3, and there would be far more PC gamers.

Everybody already said the graphics thing, so I'll keep my grip to the claim of "improved quality".

I once had a look at the list of bugs for Fallout 3, not counting system compatibility issues, there were about 162.

I think gaming is going to have to use procedual generation more and more sooner or later and whilst it didn't quite work out for Spore (ouch), it overall could help make some very good games.

I mean you could, for instance have a weapons system in a game where you could have like a "rusty" "master" "sword" or a "perfect" "balanced" "dagger", with a random generation system using keywords and areas of manufacture to make truly unique items based around economy and other such things you think would effect item creation.

You could then use a similar system to randomly generate huge portions of a sandbox, placing bandits due to economic conditions, trade routes, placing villages in lush areas, randomly generating envrioment-based quests to help them, etc.

A simple key-word based procedual generation system could save a lot of trouble in making a game.

D_987:

Dudeakoff:
Average cost of a Hollywood movie is more than $100 million
http://news.bbc.co.uk/1/hi/entertainment/3564377.stm
Bear in mind that the article was written 5 and a half years ago so it may have gone up (I don't know much about the costs of movies, could be that new technology cost = the cost of old technology when it was new, though that's probably false)
Movie ticket = $8 or $9 if I'm converting correctly
Game cost = $60

Sort it out.

That's pretty moronic logic...even a linear shooter lasts you around 6 - 8 hours through a single playthrough - not including online. Even then, you can constantly re-play your game - you'd have to buy a new move ticket...you're getting pretty good value for money with that game of yours - especially if it's an RPG.

I was making an argument against those who said that games need to cost more for consumers because of the rise in cost of producing a game, not the amount of time you use on the thing equalling how much it's worth (which I would call moronic logic).
The way I see it, the cost of games should be going down thanks to the increasing use of digital distribution to sell games, cutting out the real-world retailers who take a fairly significant slice of the $60 pie.
I hear a lot of people saying they don't care too much about graphics, and from that I'd be interested to know how much trying to get the best possible graphics for a game actually costs the developer.

Dudeakoff:

I was making an argument against those who said that games need to cost more for consumers because of the rise in cost of producing a game, not the amount of time you use on the thing equalling how much it's worth (which I would call moronic logic).

You'd only call if moronic logic if you yourself were to foolish to understand the meaning - you're getting a far greater amount of content with a game than a film, thus the price is increased.

The way I see it, the cost of games should be going down thanks to the increasing use of digital distribution to sell games, cutting out the real-world retailers who take a fairly significant slice of the $60 pie.

Digital distribution is still very low key compared to game stores - people like buying copies of games rather than downloading them - that's like saying "We should lower the price of food because you can buy it online instead of going down to the local store" - it's not going to happen because it doesn't work like that, besides you want cheaper game prices - you're going to get cheaper studio budgets, thus worse games.

I hear a lot of people saying they don't care too much about graphics, and from that I'd be interested to know how much trying to get the best possible graphics for a game actually costs the developer.

A hell of a lot - besides, a lot of people do care about graphics, heck, games basically get scored on graphics nowadays - to the point where games like Crysis get an easy ride in reviews and sales due to its graphical capabilities.

You'd only call if moronic logic if you yourself were to foolish to understand the meaning - you're getting a far greater amount of content with a game than a film, thus the price is increased.

Can't wait for them to jack up the price of books...

Digital distribution is still very low key compared to game stores - people like buying copies of games rather than downloading them - that's like saying "We should lower the price of food because you can buy it online instead of going down to the local store" - it's not going to happen because it doesn't work like that, besides you want cheaper game prices - you're going to get cheaper studio budgets, thus worse games.

I direct your attention to the music industry where downloading is very much a big thing despite early arguments saying that people wanted a disk copy. You also have analysts stating all over the place that digital downloads will play a much bigger part in the years to come. Hell, Sony is even trying to get ahead of the pack by releasing a download-only handheld console. I'm not saying it's big now, but it's going to take off sooner or later. Also, look at PC gaming.
I find it odd that you don't think a lower cost in the process of getting a product out to consumers can't result in a better prices for those consumers, simply reasoning it as not working that way. Kotick would love you.
Hilarious that you think that smaller budgets = worse games by the way.

A hell of a lot - besides, a lot of people do care about graphics, heck, games basically get scored on graphics nowadays - to the point where games like Crysis get an easy ride in reviews and sales due to its graphical capabilities.

http://www.metacritic.com/games/platforms/ps2/killzone?q=killzone%202
http://www.metacritic.com/games/platforms/ps3/lair?q=lair
http://www.metacritic.com/games/platforms/ps3/genji2?q=genji#
http://www.metacritic.com/games/platforms/xbox360/darksector
http://www.metacritic.com/games/platforms/xbox360/turok?q=turok
Even ones with stylised graphics that reviewers usually eat up get trashed:
http://www.metacritic.com/games/platforms/xbox360/afrosamurai?q=afro%20samurai

 

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