The Problem...Is That Developers Make Too Much?

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A recent article on the Examiner.com asks a simple question. Is the gaming industry broken because it pays its talent too much? The writer, Alexander Hinkley, goes on to list a veritable boogeyman's roll call of issues facing gamers today, including micro transactions, on disc dlc, online passes and the publishers fight against used games. He advocates that developer's salaries get cut in half to reduce the cost of making AAA games and hopefully get rid of those bugbears. Needless to say, he has ruffled a few feathers.

While the budgets of many AAA games do reach in to the hundreds of millions ( Tomb Raider's budget alone ballooned to over 300 million dollars. ) the vast majority of those costs are funneled into marketing. The cost of development itself has remained relatively stable over the past decade, and Alexander's article seems like a misguided attempt to shift the blame towards the people who actually make the experiences we know and love. Has he even heard of indie games?

Scroll down to the comments section of the article to see a smorgasbord of backlash against Hinkley. But the article still makes for an interesting, if a little condescending, read.

EDIT: The comments section on that article seems to have been removed entirely. YOU ARE NOT ALLOWED TO DISCUSS THIS!!!!!

Source: http://www.examiner.com/article/the-problem-with-the-gaming-industry-is-that-developers-make-too-much?fb_comment_id=fbc_678249835525211_9537241_679996265350568#f28a9aab9c9267

Sounds like another journalist with their head up their ass. I mean hell, it seems like every other week there's a story about how some developer or another can't make pay or that they're working 90 hour weeks for 40 hour pay just to get the game out at the deadline the publisher is setting.

I know we like to point fingers at the marketing bogeyman, but marketers do the statistics. People don't invest in advertising blind and they've got a lot of data showing the returns you get off X investment.

There is an arms race to marketing, in that if everyone wants it it drives the prices up to compete effectively before you need to drown out your competition so that they buy your game. But it's almost guaranteed that if they hadn't invested that money into Tomb Raider the sales would have been absolutely slashed. Marketing is hugely important, remember this is the public who didn't realise that Modern Warfare 2 was a sequel to Modern Warfare 1 during the period when IW had tried to do away with the CoD suffix.

As to costs. Developers are well paid, the average salary always beat the national average and games are typically made in rich countries and very rich areas of those rich countries (I think this is probably one of the big advantages to the eastern European dev scene, a more niche game can still break even with the rates of exchange and stuff). But then development is highly skilled technical work that would naturally demand higher wages.

And the OP has a good point individual wages seem fairly stable, the average seems to have risen from $65-70 000 ish to $80 000 over the last decade which doesn't seem particularly huge. If there's no big increase then it can't really be put down to overpaying

Thoughtful_Salt:
The cost of development itself has remained relatively stable over the past decade

I take it you mean the average wage instead of the cost of development itself right? Because development costs have grown significantly with each console generation. What 40 men could push out as an AAA title a decade ago takes 100+ people now)

EDIT

Mister Six:
Sounds like another journalist with their head up their ass. I mean hell, it seems like every other week there's a story about how some developer or another can't make pay or that their working 90 hour weeks for 40 hour pay just to get the game out at the deadline the publisher is setting.

Indie devs aside, game developers aren't paid poorly at all. Apart from the QA department, even the entry level wage is £18,000 - £25,000 which is only just below the national average salary for anyone in the UK. At the senior level they make £35,000 - £70,000+ which is much more than many people can ever expect to pull in in a year in their entire career. It's a skilled job and it's paid accordingly.

Oh no games developers are getting too prosperous, let's cut their salaries so we can make even bigger profits and keep them dependent! Yeah, I bet certain greedy executives would love to take his advice whilst doubling their pay in the process.

Why are developers making so much money? Their job isn't life threatening like a police officer's is and it's not important to the future of the nation like a teacher's job is. It might be tedious or even grueling at times and require long hours and lots of commitment, but working in the video game industry is generally fun. People should be working in the gaming industry because they want to create awesome games. Not because they want to become rich. When did the gaming industry become so corporate?

Why do footballers and film stars earn millions? Surely it's just fun, they should work purely out of the goodness of their heart on an average wage!

They shouldn't hope for any luxuries as a reward for the income they generate. Generally, they should just work for far less than the market value of the games they produce. And never mind the investors, they just donated all that money and expect no profits in return. Even if they did make a profit, they'd give it all to charity, so games developers aren't losing out either way.

This guy is a fucking tool.

MammothBlade:
Oh no games developers are getting too prosperous, let's cut their salaries so we can make even bigger profits and keep them dependent! Yeah, I bet certain greedy executives would love to take his advice whilst doubling their pay in the process.

Why are developers making so much money? Their job isn't life threatening like a police officer's is and it's not important to the future of the nation like a teacher's job is. It might be tedious or even grueling at times and require long hours and lots of commitment, but working in the video game industry is generally fun. People should be working in the gaming industry because they want to create awesome games. Not because they want to become rich. When did the gaming industry become so corporate?

Why do footballers and film stars earn millions? Surely it's just fun, they should work purely out of the goodness of their heart!

Devs don't even make that much... seriously this person has no idea what they are talking about. And for the record sports players and film stars probably shouldn't earn millions. They provide a solid level of entertainment sure but there's no reason for them to be making the amount they do. Even really good but less popular actors made far less then film stars, and there's nothing like that in gaming, publishers take most of the profits from any game and pretty much everything the developers earn they more then deserve.

doomed89:

MammothBlade:
Oh no games developers are getting too prosperous, let's cut their salaries so we can make even bigger profits and keep them dependent! Yeah, I bet certain greedy executives would love to take his advice whilst doubling their pay in the process.

Why are developers making so much money? Their job isn't life threatening like a police officer's is and it's not important to the future of the nation like a teacher's job is. It might be tedious or even grueling at times and require long hours and lots of commitment, but working in the video game industry is generally fun. People should be working in the gaming industry because they want to create awesome games. Not because they want to become rich. When did the gaming industry become so corporate?

Why do footballers and film stars earn millions? Surely it's just fun, they should work purely out of the goodness of their heart!

Devs don't even make that much... seriously this person has no idea what they are talking about. And for the record sports players and film stars probably shouldn't earn millions. They provide a solid level of entertainment sure but there's no reason for them to be making the amount they do. Even really good but less popular actors made far less then film stars, and there's nothing like that in gaming, publishers take most of the profits from any game and pretty much everything the developers earn they more then deserve.

Perhaps they shouldn't, perhaps they should, but either way this guy should be talking about multi-millionaire celebrities and executives before he even thinks of criticising developers.

With that crunch time? No way in hell.

Why don't you take a pair of pruning shears to the marketing instead, or invest in optimization?

I use to work there. They're crap. It's not a reliable source to look into, just sensationalist buzz.

Read an article a little while ago, written in '09, about a study that determined what the most effective form of advertising likely was.

http://kotaku.com/5428141/word-of-mouth-sells-the-most-video-games

The anecdote to lead off the article reminds me of Tom Emmer, a recent failed GOP gubernatorial candidate from Minnesota. He was advocating for sub-minimum wages for tipped employees because one restaurant owner claimed that three of his servers were taking home 100k a year.

Meanwhile, the mean wage for full-time servers in the state of Minnesota adds up to less than 20k a year.

Generally speaking, when you hold up the exception as the rule, from the fucking jump, your article is probably a total waste of time.

I think the problem with AAA game development is the swing-for-the-fences mentality combined with <dun dun dun> too-low game prices. Way too many publishers are pushing devs to deliver the next COD, but there's only ever one such franchise in gaming. Until COD recedes, there's no point trying to push for that level of penetration/success. You're just going to flush your marketing dollars down the toilet because you can't compete with the current biggest bear.

As regards game prices, I think a AAA game should be priced higher than a more modest offering - but that cost differential should result in tangible, worthwhile value. If it costs $5 more for voice acting, maybe the game shouldn't be voice acted. If it costs $5 more for a sweeping 1000 piece orchestral soundtrack, maybe whip out the casio. They've gotta start shaving costs somewhere, but I don't think the people putting the actual goddamn game together should be the first target.

I don't think you can say that an industry that pays well under the average for any particular skill set is overpaying the talent. Just because a handful of superstars collection big paychecks doesn't mean the average developer in the trenches is getting anything significantly above a living wage.

Individual Developers certainly don't make too much. The problem is that studios throw too many developers at a project in order to get a marginally faster release schedule. Thereby increasing the cost of the game without any real return or benefit (or often to the detriment of the game from rushed development). It's not that they pay developers too much. It's that they spend too much on developers. They pay 300 developers to make a game that should only need 50. It's a poor use of funds that only bloats the costs to no benefit. All parties involved would be better off with 6 50 man teams making 6 different games. Even if they are on a slightly slower schedule.

Thoughtful_Salt:
Needless to say, he has ruffled a few feathers.

Only a few, and like 100% of the game devs I know.

Suffice to say, like 3 people referenced in the industry with sports cars (the guy surmised to be at Riot, John Carmack and CliffyB) compared to the other 99.99% of the industry isn't the norm. The average salary he references also is based on submissions, is the data itself can't be used as a reference point since it differs based on the cost of living of various places. Obviously San Francisco has a much higher cost of living compared to say, Austin, but a large majority of game studios are in California...so...

And of course, he claims the high salaries are pushed onto the consumers via various costs, nevermind all those things are optional. I think someone worked out that since prices haven't changed much for the past 20 years or so, if you adjusted game prices for inflation they should actually be in the $130 range or something?

Of course, it doesn't factor in that even in our off hours, we're still doing stuff to improve our skills, reading papers on new technology, taking classes, or just practicing at home. We're on the clock all the time.

Or playing other games for research. ;)

http://www.alexsdbzrpg.com/

If this is the best he can do, he has no right to talk about quality in games.

The main problem with software projects (at least from my experience) is that the higher-ups change the requirements at a very late stage in the project, resulting in a whole load of extra work for the developers & testers. Good developers are worth their weight in gold & are very hard to come by, but that's not going to reduce the cost of a project if some moron is micromanaging it constantly.

MammothBlade:

Why do footballers and film stars earn millions? Surely it's just fun, they should work purely out of the goodness of their heart on an average wage!

They shouldn't hope for any luxuries as a reward for the income they generate. Generally, they should just work for far less than the market value of the games they produce. And never mind the investors, they just donated all that money and expect no profits in return. Even if they did make a profit, they'd give it all to charity, so games developers aren't losing out either way.

This guy is a fucking tool.

Hey hey, from one extreme to the other there. Income level isn't a binary thing that you switch between "more money than five generations could feasibly spent" and "has to beg for food". At least not yet. And I think those folks are paid so much mainly because people are stupid and don't think there's a problem with it *snicker*

I do agree that this guy is a massive tool, though. A tool so massive that I'd only use it if I deliberately wanted to do an incredibly ham-fisted job.

I'm sorry, did someone sneak into that article when the author wasn't looking and replace all the "publisher"s with "developer"?

As far as I know, pretty much all the monetisation and marketing and game substance problems are because of publishers sticking their statistics where they don't belong, failing to understand the market, getting greedy, and spending too much on the wrong things. Although developers probably aren't all visionaries who would make wonderful new experiences every time if it weren't for interference, I do think most of them know their audience better than their publisher does.

Well it's this general lack of information that can make such nonsense ring true, it wasn't until recently that some studios disclosed the actual budgets for development were 50% or less of what publishers displayed publicly, biggest piece of the pie is actually garbled up by marketing and accountants who contribute nothing to the game, also CEOs who pocket several millions on their own.

It's about time someone breaks down the actual product cost and all the useless overhead.

No

However...

I think we hire too many people. It seems we are substituting talent with numbers, and that's an endless money drain. When games like 'Dust: An Elysian Tail' can take ONE person to make, we have to start asking ourselves hard questions, like "Why do many games that look only half as good and play only half as good (as Dust) require small armies!?" Again, I believe we are substituting talent for numbers.
I don't believe half the people working in the game industry today should be. Yes, they have degrees for what they do, but what they basically have is a piece of paper that says they can make polygon pillars and guns, so they get hired to do just that. That isn't talent, it's just rudimentary knowledge to make a process happen. Of course if you get enough of those people together you can get a pretty game, a hollow game with no soul in it's aesthetics, but a pretty game. Hiring an army of those people is going to break you financially. What you should do is find a few people who "paint their own realities". Make water into wine, give the sky amazing and obscure colors; yet still make it look practical in the world. Then give them ample time to freely do what it is they do best. It will take longer, but in the end it will cost less and look nicer.

Oh, dear Lord... I'll hold my opinion of this man private (some things should not be shared in ANY company), and simply add his name to the list of people who's opinions can be safly written off as worth less than the time it took to write them out.

The market is self-correcting.

That's it really. If there are people being paid too much, it's only a matter of time before it gets reduced or they really are worth that much. Corporations don't pay more than they have to, that's for sure.

Here's another idea. Cut marketing pretty much entirely. Let them work with a bit of imagination and what the developers give them, use in game footage or cinematics instead of doing TV ads noone gives a shit about. Stop throwing a huge part of a game's budget on telling people in the most expensive and ineffective way that there's a new game out there.

xPixelatedx:
No

However...

I think we hire too many people. It seems we are substituting talent with numbers, and that's an endless money drain. When games like 'Dust: An Elysian Tail' can take ONE person to make, we have to start asking ourselves hard questions, like "Why do many games that look only half as good and play only half as good (as Dust) require small armies!?" Again, I believe we are substituting talent for numbers.
I don't believe half the people working in the game industry today should be. Yes, they have degrees for what they do, but what they basically have is a piece of paper that says they can make polygon pillars and guns, so they get hired to do just that. That isn't talent, it's just rudimentary knowledge to make a process happen. Of course if you get enough of those people together you can get a pretty game, a hollow game with no soul in it's aesthetics, but a pretty game. Hiring an army of those people is going to break you financially. What you should do is find a few people who "paint their own realities". Make water into wine, give the sky amazing and obscure colors; yet still make it look practical in the world. Then give them ample time to freely do what it is they do best. It will take longer, but in the end it will cost less and look nicer.

THIS

In a sense, I sort of see what he's saying. We've got some things in the industry that are well paid much. Anyone remember Dead Space 3?

And considering that I mention that, it brings me to my point that in the long run, I don't buy it. The industry is failing because there's too many safe endeavors, controversies up the kazoo, and just the simple fact that AAA development has no idea how to stay afloat other than throwing money at games and expecting to be recompensated in full for a product that may not be all that great in the end.

(I opted to mention controversies as well, as people are trying too hard to please one side or the other without getting it right.)

So there's my take on this article.

I think that there should be more teams going without publishers because as we can see in the case of publishers like Activision or EA because they (falsely) believe there is no market for x game therefore completely deny anything that falls out of their 'perfect' formula (shooting and football). The developers are making next to nothing compared to the publishers. There could be such a massive cost cut if they either increase the time that it takes to make the game (by cutting all of these teams) or perhaps start investing in small 'exploratory teams' which release smaller and more artistically free games. Yes these games will be lower income projects but idealistically have drastically cut production costs (thus evening out the profits). Developers are sometimes being too constricted by the publishers, who push for the same 'White, Male, 17-45 and Likes Shooters' demographic that they see as the only existent gamers, which is by todays standards an outdated view. More people are becoming interested in the artistic small scale projects -evidenced by popular artistic projects like Journey, Minecraft and Super Meat Boy, and popular mainstream mobile games like Angry Birds and their developers/publishers Zynga or Popcap (which, lets face it make a lot of revenue and need smaller teams).

deadish:
The market is self-correcting.

That's it really. If there are people being paid too much, it's only a matter of time before it gets reduced or they really are worth that much. Corporations don't pay more than they have to, that's for sure.

This is true, but I also think it must be said that a lot of the publishers and investors are so out of touch with the consumer base that they frivolously spend money on things that are simply not necessary.

Multiplayer would be a perfect example. They still haven't figured out that every single game doesn't needs a multiplayer mode. In fact, they often detract from the core experience.

The amount of money they piss away on development costs creating MP for something like say Tomb Raider is just stupid.

Vegosiux:

MammothBlade:

Why do footballers and film stars earn millions? Surely it's just fun, they should work purely out of the goodness of their heart on an average wage!

They shouldn't hope for any luxuries as a reward for the income they generate. Generally, they should just work for far less than the market value of the games they produce. And never mind the investors, they just donated all that money and expect no profits in return. Even if they did make a profit, they'd give it all to charity, so games developers aren't losing out either way.

This guy is a fucking tool.

Hey hey, from one extreme to the other there. Income level isn't a binary thing that you switch between "more money than five generations could feasibly spent" and "has to beg for food". At least not yet. And I think those folks are paid so much mainly because people are stupid and don't think there's a problem with it *snicker*

I do agree that this guy is a massive tool, though. A tool so massive that I'd only use it if I deliberately wanted to do an incredibly ham-fisted job.

Yeah of course not, I was just pointing out that he is being ridiculous to expect people to take less pay just because he thinks it's a "fun" job.

Programmer, like football player, make what they are worth. They are worth what someone is willing to pay to get them to work for them instead of someone else. When you factor in benefits and payroll taxes a good developer is worth A LOT of money. However, studios continue to be short of qualified and experienced employees. This means that wages will continue to increase....

If the model changes to decrease the resources that go into a game(as many agree it must) those resources will likely come out of graphics, functionality or features(or a shift to less expensive features). This will mean one of two things. Either less employees and resources will be needed resulting in lower wages and less employment for developers OR more games will be made at less cost with an expectation that more games are purchased by consumers. More than likely it will be a mix of the two.

Things like wages are kind of like a force of nature- they aren't really set by employers, or people attempting to find some kind of abstract value in what a person is worth(football players being paid too much for example). They are set by supply of talent and demand of said talent. This is why football players are paid so much and professions like janitorial work(which can be done by nearly anyone) are paid much lower.

Games are some of the most complex pieces of software that a member of the general public will run on a home computer. Creating such software requires skilled computer people to create, many of whom could get equally well-paid jobs working for a non-gaming software company. If you drastically lower the pay of game devs, you risk driving away all but the very dedicated and the very bad. And there are a lot more bad programmers than dedicated ones out there.

The problem is, as stated before the money is being spent wrong.
Many games have millions pissed away on marketing when they could easily make a smaller game.
Take a look at the games being funded on kickstarter, if they made games on more of that scale then they could make more, cheaper games and I reckon that they would make larger profits in the long run.

Most game devs are way overworked and underpaid compared to programmers working in other fields. And they have a high turnover rate from quitting for those above reasons. So the problem is the opposite.

In my opinion, most game marketing can be done rather cheaply by word of mouth and youtube anyways. They spend way too much on that end of the game and way to little on the talent that is making the game great. Also, like Obsidian pointed out, AAA games are largely irrelevant to the average dev.

ThriKreen:

Thoughtful_Salt:
Needless to say, he has ruffled a few feathers.

Only a few, and like 100% of the game devs I know.

Suffice to say, like 3 people referenced in the industry with sports cars (the guy surmised to be at Riot, John Carmack and CliffyB) compared to the other 99.99% of the industry isn't the norm. The average salary he references also is based on submissions, is the data itself can't be used as a reference point since it differs based on the cost of living of various places. Obviously San Francisco has a much higher cost of living compared to say, Austin, but a large majority of game studios are in California...so...

And of course, he claims the high salaries are pushed onto the consumers via various costs, nevermind all those things are optional. I think someone worked out that since prices haven't changed much for the past 20 years or so, if you adjusted game prices for inflation they should actually be in the $130 range or something?

Of course, it doesn't factor in that even in our off hours, we're still doing stuff to improve our skills, reading papers on new technology, taking classes, or just practicing at home. We're on the clock all the time.

Or playing other games for research. ;)

Exactly this. Also, according to the game dev salary chart that gets reported every year, I'm making less as a 3d artist at my job than the average QA tester, and that's not even getting into the whole "female vs male salaries" thing. Even if those self-reported stats were fairly accurate, I would fully expect the huge cost of living difference in California to mess with those numbers to the point where it makes me in Texas look like a homeless scrub.

This guy just came off as massively butthurt that there's people out there who are making a comfortable living off their hard and skilled work, doing what he wishes he could.

I also liked the part about how many game studios employ "thousands of people", that was a pretty interesting factoid indeed. I also found it ironic that the article itself was surrounded by like 50 ads.

like it or not, this guy had some noble intentions when he wrote this article......the problem is that he targeted the wrong people.

SeventhSigil:
Read an article a little while ago, written in '09, about a study that determined what the most effective form of advertising likely was.

http://kotaku.com/5428141/word-of-mouth-sells-the-most-video-games

Um no offense but that study is complete BS. Here's why nobody says they buy something because of ads even if they do, because nobody likes to admit that ads work on them but companies wouldn't spend billions on them if it didn't work. Second most people don't even realize ads work on them, it's a subconscious thing that breeds familiarity with a product which makes the consumer more likely to buy it just because they keep seeing it rather then having an objective comparison. So in any survey people are of course going to answer most often that word of mouth or demos sell them on games over ads.

ron1n:

deadish:
The market is self-correcting.

That's it really. If there are people being paid too much, it's only a matter of time before it gets reduced or they really are worth that much. Corporations don't pay more than they have to, that's for sure.

This is true, but I also think it must be said that a lot of the publishers and investors are so out of touch with the consumer base that they frivolously spend money on things that are simply not necessary.

Multiplayer would be a perfect example. They still haven't figured out that every single game doesn't needs a multiplayer mode. In fact, they often detract from the core experience.

The amount of money they piss away on development costs creating MP for something like say Tomb Raider is just stupid.

Well, it's shareholder money they are pissing away and therefore their head that's on the line.

Suits who don't know what they are doing won't be keeping their job long.

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