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Rising game dev costs put squeeze on mid-tier studios
- Thread starter Poetic.Injustice
- Start date
CalamityPixel
Member
Yup. It's getting pretty bad.
I'm no economist, but this sounds like some kinda bubble has formed/is forming at a rapid pace, particularly in these past few years. And we all know what bubbles do...
At any rate, if this keeps up, double-A development doesn't seem like likely to continue. We've already seen a decline in those kind of games since the new generation came around.
At any rate, if this keeps up, double-A development doesn't seem like likely to continue. We've already seen a decline in those kind of games since the new generation came around.
Succinct Verbosity
Member
Did we ever find out what Hellblades budget was, because I feel like whatever route they took is the best way forward for mid-tier devs.
Also I disagree with that game pushing out mid tier studious. Quite the contrary.
Also I disagree with that game pushing out mid tier studious. Quite the contrary.
Deeke[VRZ]
Member
Now we see why microtransactions are so commonplace.
JordanN
Banned
Deeke[VRZ];251843891 said:
Microtransactions would be pennies unless you sink your teeth on some whales.
It's not like cosmetics cost the same amount as a game ($60). What if a dude buys a $5 in-game shirt and that's it? The game is still going to flop unless you can bring the amount of players (and who want to spend serious money) up.
Huge dropped since PS2/Wii. Licenced games have been almost dead this generation other than Lego or mobile.
Antiwhippy
the holder of the trombone
OmegaDL50
Member
If you look at a small development studio of 5 to 10 people.
Using the average of 10,000 per person a month. So at the max 100,000 a month for 10 people.
These costs are not just for the creation of the game, but the expense budget just to operate the business as a whole. This factors everything into employee wages, equipment (computers and development tools), workplace costs (rent, utilities, maintenance and upkeep). All of these things are a factor.
Just like any good business they also have personal financing and accountants doing the number crunching to manage these budgets. Even a small team of developers has a means to manage their expenses.
Or that rely on something like Kickstarter and pray the public buys into what you are potentially offering (i.e Larian with Divinity: Original Sin for example)
Greigor The Fellhand
Member
I'm interested in seeing a Line item break down of how its hitting 10k+ a month
Cow Mengde
Banned
This has been an issue since the start of the PS3 and 360 generation. Tons if companies died because of HD. Nothing was done to solve the issue this generation. Things will only get worse.
Costs rising is real, but I have to question the whole thing a bit. Why are they rising? What is the specific component that drives prices up. It's gotta be graphics, right? Rising expectations are cited, but tbh I haven't seen this in real life. It seems like the games that sell gangbusters are many times pretty damn primitive when it comes to visuals, at least when compared to the AAA-crowd. It just doesn't seem to me like the market at large is demanding better and better graphics, especially from mid-tier studios. So am I just a stupid fucking idiot or could there be some self-imposed aspects to this as well?
I literally don't know anyone IRL who demands for better and better graphics. Do they like them when they see them, of course. All my friends are hard core gamers and most of the games they seem to play are way behind the curve graphically. I hear even less demands for better graphics from the more casual call of duty crowd.
To be fair, I am a graphics whore through and through as in I really admire good well done graphics, but they don't get me to buy games nor do they deter me from buying games if they look fun.
I literally don't know anyone IRL who demands for better and better graphics. Do they like them when they see them, of course. All my friends are hard core gamers and most of the games they seem to play are way behind the curve graphically. I hear even less demands for better graphics from the more casual call of duty crowd.
To be fair, I am a graphics whore through and through as in I really admire good well done graphics, but they don't get me to buy games nor do they deter me from buying games if they look fun.
HP_Wuvcraft
Banned
You're gonna have to clarify this.
KawabataSan
Member
The replies in this thread are something else.
We really need more education as to how games are made and how much they cost to make.
Nope. Every game company is clueless. They should hire you so you can show them the light.
We really need more education as to how games are made and how much they cost to make.
Nope. Every game company is clueless. They should hire you so you can show them the light.
Deeke[VRZ]
Member
Another huge thing gamers don't usually think about when making games: taxes. (Unless you're Take-Two 
)
)Deeke[VRZ]
Member
100% this. Blood, Sweat and Pixels has changed how I see gaming, and this article helps add merit to my new perspective.
Velocity:Design:Comfort
Banned
How big was the witcher 3s budget? Does being located there reduce costs a lot?
Graphics is certainly a big part of it. But it's really all aspects. Everything is high fidelity and unique. Producing high quality usually means using high quality talent which means high salaries. Especially for engineers, the starting salaries for entry level outside of gaming for engineer is six figures in parts of the country. Someone with years of experience would be significantly higher. An engineer is probably costing 15k a month minimum when you include their equipment and benefits expected.
ArkhamFantasy
Member
Deeke[VRZ];251843891 said:
Ironically its not the Ninja Theory's that are doing it, its the biggest and most successful publishers pushing micro transactions and lootboxes.
Poetic.Injustice
Member
Somehow I don't think the solution is for every studio to downsize to 12 people.
Crossing Eden
Hello, my name is Yves Guillemot, Vivendi S.A.'s Employee of the Month!
Man if only game devs pressed the "cut on costs in places" button more often then they wouldn't be in this mess.
JamesHolden
Banned
Imagine an Industry where labor costs grow with inflation and where new technology needs to be invested into a product that is sold for a cost that does not rise with inflation into a market with greater and greater saturation.
Evil Monkey DTT
Banned
AA might go away but our indie games are growing, and honestly it's getting harder to tell indie products from AAA in terms of presentation and quality. It's a shame for AA studios but I do think it's possible to win here.
Didn't we go over this in one of the recent Blood, sweat, pixels threads?
Salary of a decent software engineer in CA - averages out to $100k (far higher for good senior talent). That amounts to $8.3k a month. Then on top of that you have benefits (inc health/401k/ancillary). Then on top of that, you have the cost of running the office they're in, including IT/HR/Office staff. It adds up.
Obviously, there's staff that's lower cost than that, but the overheads are pretty consistent for the officespace/support. More senior staff? Higher costs.
Work in other parts of the country? Changes the equation slightly, but not by much. Changes your talent pool too, obviously.
If it's costing you $120k per person, per year, and you've got 75 people working on a project for two years? $18 million?
Transistor
Banned
Wow, is that how many people made Hellblade?
mugurumakensei
Member
That's what the slide shows with a max of 15 members at any point in time.
Also, they don't make the full price of every copy sold. 30-50% of the retail price goes to the distributor. At $30, to break even for your amount, they'd have to sell nearly a million copies. Of course, your math doesn't even include stuff like marketing, middleware licenses, IDE/tool costs, art assets that need to be purchased or in house artists that need to get paid, etc.
baxter2231
Member
Maybe not set up shop in places where you need to pay someone 150k just to live in a 1 bedroom shack?
Randomizer
Member
Mid-tier development has been dead for some time. That's why Kickstarting games became so popular.
Purple Cheeto
Member
How do you get and retain talent if you aren't in a location where it exists or can't pay for it?
Remote development is pretty rare in games and almost non existent if you do console work.
I feel like there's more mid-tier stuff than there has been in a while, it's just that people call it "big indies" and the like now. Kind of feels like mid-tier is having a renaissance.
Honestly I don't think dev costs are that crazy, but you hear the marketing budget for some games and I'm like "what in the fuck are you thinking?" Wasn't the story with Bioshock Infinite that dev was around $80M and the marketing budget was over $100M? That seems completely illogical. I know Infinite wasn't mid-tier, but you hear the same rumblings and worse about AAA dev.
Honestly I don't think dev costs are that crazy, but you hear the marketing budget for some games and I'm like "what in the fuck are you thinking?" Wasn't the story with Bioshock Infinite that dev was around $80M and the marketing budget was over $100M? That seems completely illogical. I know Infinite wasn't mid-tier, but you hear the same rumblings and worse about AAA dev.
whateverblah
Neo Member
Hopefully the Switch can become a haven for mid-tier devs.
epeternally
Member
If marketing didn't bring a return on investment, publishers wouldn't do it. No one is wasting money by spending it on marketing. Figuring out an optimal marketing budget is done by paid professionals whose job it is to balance these numbers. They know what they're doing. Everyone on here needs to get the idea that marketing costs are ever the problem with game budgets out of their heads immediately.
Also it's completely bizarre that folks rag on publishers incessantly for daring to spend money on marketing, but then also complain when games like Evil Within 2 and Prey don't get a lot of marketing. Which is happening because they've determined that extra marketing spend wouldn't provide a return on investment. People with degrees and years of experience are working full time to figure these things out. You don't know better than them.
I don't think it is a market bubble by standard business definition.
foxuzamaki
Doesn't read OPs, especially not his own
I'm really hoping the switch helps with this somehow
Im one of those people that figures out what marketing spend you need (not in gaming) and its an art not a science. There are elements that are scientific, but measuring ROI is very difficult.
This compounded for something like a movie or video games because you basically have one shot to get it right and everything must culminate with release day.
Typically, most companies in those types of business will overdo it a bit, because they would rather have a bit too much advertising then not enough, and the way the launch works, it will be hard to tell if the money was worth it after the fact anyway
Coriolanus
Banned
We don't. It is fine if people want to learn about it, but we do not need to, and most consumers will never give a single fuck how they're made or how much they cost to make. All that will matter to the majority is if it looks like something that they want to play.
This is not a problem that the consumer has to worry about. It isn't with the movie industry, nor with the car industry, nor with any other industry. This is solely a problem for developers and publishers, and they'll have to find a way to get around it if they want to keep working in these titles. Because this is a problem that the majority of consumers won't ever worry about.