Economics of a 2D Adventure

[z3lda]

I orginally found the link on ->http://games.slashdot.org/

Article can be found here -> http://grumpygamer.com/4904226

Just thought some people might be intrested in this read.

[tentons]

The interesting part is that this assumes the retail publishing model, which shows how much overhead is involved. An Indie team could do it for a fraction of the cost in the same time and make their investment back quicker. Aren't you glad to be an Indie? :)

[cliffski]

absolutely. the figures some people throw around make me laugh. I heard a top UK developer yesterday claim that next gen titles will cost at least $15 million.
thats insane. its a totally broken business model.
yes I am VERY glad to be a (part-time) indie (as well as a full time wage slave ;()

[Jim Buck]

It's because of the size of the teams and how long they need to work in order to make a game. Salaries are the most expensive part of a game development company.

[tentons]

Salaries are the most expensive part of a game development company.
It's the biggest development expense. But $500k is a little marketing/placement budget by retail standards. That's half the price tag right there. Any less for marketing and you're barely going to be seen in the retail channels.

Edit: I mean in reference to the article originally cited. $15 million for the next gen game is probably due to the insane amounts of art required to make all that fancy new hardware sing.

[Jim Buck]

Yeah, that's what I was referring to. :) More complex machine requires mega amount of art data to be created. PC is, for now, the only platform where you can get away with making games that don't tap the hardware.. hence the existence of the indie movement. :)

[Anthony Flack]

The future looks good. $15 million to develop a game? Makes me laugh, that does. A business just waiting to collapse.

It always amuses me the way developers carry on like they are forced to make games more and more expensive, against their will or something.

Anyway, I've only just started reading, and already


Building the game in 3D is a much more costly endeavor that brings with it a whole slew of complications which I won't get in to in this article.

Er, what? I don't believe it. Doing the necessary animations etc in 3d is much easier and less time-consuming than producing the masses of commercial-quality cel animation needed for a 2d game.

[Jim Buck]

It's the consumers that demand it. You couldn't put out a PS3 type of game for much less than that price without some real comprimises or cutting of corners.

[Anthony Flack]

Whether the consumers are demanding it (or you feel like they are) doesn't make any difference if you can't make your money back.

If rising production costs aren't sustainable, then production costs will just have to stop rising, no matter what consumers are demanding.

The most obvious thing that will happen is that big games will stop being made in the US. Things are already moving in that direction of course.

But nobody is forcing anyone to make $15 million epics. No-one cares what the thing cost, as long as they like the end result. Sure, the mainstream industry has for some time based itself around this technological arms race that is pushing production costs through the roof, but if it ceases to be the most profitable way to do business, they'll change.

The budget PS2 game business in Japan is booming. And of course, the online casual game market has exploded. Moving the mainstream to the $15 million mark just opens up more opportunities for everyone else in the sub-$15 million market.

I say that it's perfectly possible to make excellent, fun games, with high production values, for under $1 million. You just might not be able to make the huge, content-driven epics that we've come to expect... but then, an awful lot of people don't really want that sort of thing anyway.

You can still make games that are just as fancy, and look just as good... but just aren't as big. You'll need to maximise your replayability in clever ways, rather than just make 150 huge levels to plough through.

As technology improves, in a lot of ways making games just gets easier and easier.

[Sybixsus]

The budget PS2 game business in Japan is booming.

Yup. I find it hard to believe that Katamari Damacy had a $15,000,000 budget, or indeed anything approaching it, yet customers don't seem to be shunning that. Same goes for games like Mr Mosquito, and even bigger rpg titles like Disgaea have shown that it's possible to make a very playable, addictive game which has a much lower media requirement than Final Fantasy etc.

[cliffski]

Personally I hink the market is very diverse with variable levels of return.
if you spend $10 making a game you might not sell any, you will have lost $10 or 100% of your budget
if you spend $1000, you might get $2000 in sales. thats 100% return on your investment. you might sell none and lose $1000
if you spend 15million you *might* make 20 mill. thats a cool 5 mill profit (hurrah) BUT you might also lose maybe $13 million (ouch)

These numbers are total guesses, but what I'm saying is that there are various budget points with different opportunities for success and failure.
EA might want to gamble $15 mill to make $5mil profit. but that DOES NOT mean that you can't make money on a $50k game. If your board of directors demand you make a 5 mill profit, you HAVE to go for the 15 mill investment.
but as an indie, you can gamble $5k on maybe making $50k.
$50k is a pretty good pile of cash.
Just cause EA don't want it doesnt mean I dont. All the better that they dont compete on my terms ;).

[Jim Buck]

Well, people will have very high expectations for what they see on the PS3, so companies are absolutely gearing up their dev teams to be pretty big (internal teams anyway - they still would obviously like 3rd party to do things "on the cheap"). I'm not talking about the markets that Mr. Mosquito and Katamari Damacy cater to.. I'm talking about the markets that see commercials for games on tv during the superbowl, etc. THAT'S where the big companies with the 15mil budgets are trying to make their money. (Note I'm talking PS3, not PS2 where you could still get away with making a game for a few mil at this point.)

Which is why, like cliffski said, it opens up a whole arena for guys like us. :)

It's the reason why I switched for PS2/PS3 development to working on the PSP. I don't believe in this huge model myself anymore.. teams are WAY too big for development to move forward at a reasonable pace. I agree that the budgets of these high-end games will probably burst their bubble soon but not as long as some big dev companies are making serious bank with it.

[oddvark]

I keep hearing of comparisions of games to hollywood. Overly large budgets dont stop them from putting out loads of movies...and I dont see THEM dying anytime soon. In games, what I hear about is tons of failed ventures, and a few big hits. But thats enough to keep them going I suppose.

Anyhow, I like it that way. AAA title games are great, thats why I buy them :). Smaller games are just cool for a different reasons I guess, thats why I buy a few of those myself.

But then what do I know??? I'm just a nut.

[Anthony Flack]

Ah, but the movie market is much broader, far more accessible to more people, they can charge you $10 for 2 hours of entertainment, there are no compatibility issues or competing hardware issues, and they have a lucrative DVD sale/rental market as a second tier. And movies aren't becoming 4 times more expensive to make every 4 years. If they were, I expect they'd soon reach a point of unsustainability too.

I'm sure we will see some extremely expensive games made for the PS3. But for the same reason I expect the budget PS3 market to become huge.

[andyb]

$50k is a pretty good pile of cash.
Just cause EA don't want it doesnt mean I dont. All the better that they dont compete on my terms ;).

lol, i agree wholeheartedly :D