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[Wiped89]

60 U.S. dollars * 4 million =
240 million U.S. dollars


it only cost 60 mil

I don't get it .

Lol that's because you don't understand basic economics.

EA does not take all $60. Not even close.

Of the $60:
-$5 for packaging and shipping
-$8 for platform holder's fee
-$20 to 30 for the shop/retailer's cut (really, the shop gets the largest slice by a mile)
The publisher is left with about $17-25 per $60 game. Less if there's taxes in the price too.

How it works is shops buy a bulk order of copies for a set price. So Amazon might buy 10,000 copies for x amount, working out at paying the publisher $20 a copy, then Amazon charges you $60. A smaller shop may only buy 500 copies, but because their order is small, they pay more like $30 per copy, making less profit for the shop but more profit per game for the publisher, but shifting fewer copies so making less money overall too.

This is how business works. Bulk = cheaper. Retailer margins = massive.

 

[Callibretto]

Silent Hill 2 is also a Playstation 2 title, which requires less development costs back in the day. With the HD gen, games became more complex; asset creation costs more for one and it skyrockets your budget. Working with new enigines etc. You can't compare the two.

I actually kinda want to see dev tried to make ambitious $30-40 games with PS2 (or PS3) level asset, just in 1080p 60fps

I'm guessing that's Squenix intent for I am Setsuna, to replicate snes/ps1 style game with lower budget in today's market.

but in their effort to make it low budget, they skimp on waay too much, story and characters not fleshed out enough, environment and music are not as varied, the art and everything just look cheap while you try playing FF9 now even with it's pixelated textures, it still look ambitious and expensive (for it's time) title

 

[Audioboxer]

This is what top SNES games cost in the UK over twenty years ago.

I'd be happy to pay that amount, and I don't get any games for free.

You aren't wrong

Here's the issue though, far more games exist on the market these days. While the market itself has ballooned in size with MANY more millions of gamers than the SNES/N64 days, so has customer variety. Indie/digital are a thing too. Gamers are spoilt for choice, and that's not our fault. That's what happens with a free market when there is vast competition.

Publishers can charge £80 as a base if they want, but they'll sacrifice a lot of traffic because many people won't pay that. On that note, unlike games of the past, today's are filled with DLC content, or they have multiple special editions that are £80~150. A base price of £80 is different from saying we have an £80 version.

So what can the industry do? Well, if it requires to, for some genres of games, like horror, they can scale back some of the production if it cannot be done on a reasonable budget. Otherwise, indie games will simply rise up to fill the void the big publishers create with their nonsensical claims that "horror games can't be made these days with smaller budgets".

The industry adapts or it some of it dies, and some of these big publishers still steamroll ahead thinking every game can bring them COD money and sales. Not a realistic reality. Accept that or take the criticism for mishandling your studios and shutting them all down. Don't blame gamers for that though. Blame yourselves and your outrageous expectations/projections.

 

[Spuck-uk]

For an example of a real fuckup, know that the license alone for the 1982 flop of a game ET (the one that got buried in landfill), cost $23 MILLION dollars.

 

[entremet]

AAA development for 3rd parties is a very interesting space. The platform holders can eat the costs more since they more rev streams, but as a 3rd party, you have much less flexibility.

 

[TheMoon]

This is what top SNES games cost in the UK over twenty years ago.

I'd be happy to pay that amount, and I don't get any games for free.

just did some fun calculations with inflation taken into account

SNES/N64 games on the top-end in Germany came down to the equivalent of today's US$120. I do not want to get back to that lol.

 

[Spuck-uk]

So what can the industry do? Well, if it requires to, for some genres of games, like horror, they can scale back some of the production if it cannot be done on a reasonable budget. Otherwise, indie games will simply rise up to fill the void the big publishers create with their nonsensical claims that "horror games can't be made these days with smaller budgets".

The industry adapts or it some of it dies, and some of these big publishers still steamroll ahead thinking every game can bring them COD money and sales. Not a realistic reality. Accept that or take the criticism for mishandling your studios and shutting them all down. Don't blame gamers for that though.

I think the industry needs to stop having a set $60 price point, and play with different pricing models, instead of the big publishers try to force most of their efforts into AAA hits.

I think Blizzard have done this really well in the last few years with the models for Overwatch/Hearthstone/HoTS all being very different. Admittedly they have more leeway than most because thier titles will make a shedload regardless.

 

[patapuf]

I actually kinda want to see dev tried to make ambitious $30-40 games with PS2 (or PS3) level asset, just in 1080p 60fps

I'm guessing that's Squenix intent for I am Setsuna, to replicate snes/ps1 style game with lower budget in today's market.

but in their effort to make it low budget, they skimp on waay too much, story and characters not fleshed out enough, environment and music are not as varied, the art and everything just look cheap while you try playing FF9 now even with it's pixelated textures, it still look ambitious and expensive (for it's time) title

Everything you ask for costs a lot of money.

FF9 almost certainly cost more to make than i am setsuna. FF's are among the most expensive games of their era. Square mentioned FF7 to have a budget of 45 million dollar.

I doubt the sequels where much cheaper.

You dont get High production values, variety and large game worlds (handcrafted) for cheap. Resolution and fps dont make a game more expensive.

 

[Audioboxer]

I think the industry needs to stop having a set $60 price point, and play with different pricing models, instead of the big publishers try to force most of their efforts into AAA hits.

I think Blizzard have done this really well in the last few years with the models for Overwatch/Hearthstone/HoTS all being very different. Admittedly they have more leeway than most because thier titles will make a shedload regardless.

They already do have different pricing models. As I said in that post and Jim Sterling satirised most games don't really cost $60 anymore. Not if you want the full game. Many are also stuffed with MTs and now things like loot boxes.

Gamers always have choice though, and if someone can spend £15 on Stardew Valley and have many more hours of entertainment than a AAA Michael Bay FPS experience, maybe that's just the reality some AAA pubs are going to have to live with. Adapt your budgets/scale back for SOME of your projects if you have to, or stop fucking up studios you THINK you can turn into COD before sacking them all for YOUR stupid expectations.

 

[Kill3r7]

Hellblade is less than a million, right? But I heard that the developers are fine with it.

EA is the problem. I hope Visceral make a good turn.

Compare the size of Ninja Theory to Visceral, then look at EA’s financial outlook and earnings call. There is your answer.

 

[TechnicPuppet]

Lol that's because you don't understand basic economics.

EA does not take all $60. Not even close.

Of the $60:
-$5 for packaging and shipping
-$8 for platform holder's fee
-$20 to 30 for the shop/retailer's cut (really, the shop gets the largest slice by a mile)
The publisher is left with about $17-25 per $60 game. Less if there's taxes in the price too.

How it works is shops buy a bulk order of copies for a set price. So Amazon might buy 10,000 copies for x amount, working out at paying the publisher $20 a copy, then Amazon charges you $60. A smaller shop may only buy 500 copies, but because their order is small, they pay more like $30 per copy, making less profit for the shop but more profit per game for the publisher, but shifting fewer copies so making less money overall too.

This is how business works. Bulk = cheaper. Retailer margins = massive.

If this is true why are digital games so expensive? Cut them to $50 in the US £35 in the UK to encourage people to switch. Publishers will still make a lot more per sale.

 

[tzare]

I did my part buying the game, i remember it came with Dead space Extraction to, no sure if that didn't help either since is is an added cost.

And haven't played the game yet, lol. Still sitting in my backlog

 

[FunkyDealer]

60 mill USD is the same amount as the full budget for Halo 3. Half of which was marketing.


Source: https://www.google.no/amp/s/www.eng...cer-halo-4-is-microsofts-most-expensive-game/

 

[Callibretto]

I'm not sure if this is a good idea or not, but I think 3rd part publisher should try to reduce their budget for visual and focus it on gameplay and scale, but increase the marketing budget like with cool cg trailer etc

I think a really cool looking CG trailer can do a lot to sell your games more than cool looking in game graphics. casual who don't really follow games like us in videogame forum probably only see some 3-5 minute trailers than looking at 20 minute gameplay demo.

you need those cool cg trailer to first attract attention before hooking them in with the gameplay.

 

[TRUE ORDER]

Wow, that's a lot.
A shame it wasn't enough though, it is a great game

 

[GOOCHY]

-$20 to 30 for the shop/retailer's cut (really, the shop gets the largest slice by a mile)
.

That is not true. Retailers make a couple bucks on new games. That's it.

 

[NEO0MJ]

That is not true. Retailers make a couple bucks on new games. That's it.

Source?

 

[weltalldx]

If this is true why are digital games so expensive? Cut them to $50 in the US £35 in the UK to encourage people to switch. Publishers will still make a lot more per sale.

In his mind, retailers are making off like bandits and many stores are opening up to take advantage of the ballooning retail industry space. Also in his mind, digital copies costing the same or more than physical copies is the result of retailers having to pay more for the associated cost of housing and maintaining binary digits.

 

[KillerMan91]

If this is true why are digital games so expensive? Cut them to $50 in the US £35 in the UK to encourage people to switch. Publishers will still make a lot more per sale.

Because retail is still huge part of game market and publishers have to please big retailers.

 

[GOOCHY]

Source?

http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/02/anatomy-of-a-60-dollar-video-game.html

That's just one quick one. After you factor in shipping costs, costs to return unsold merch, price decreases, it's a couple bucks per game margin on new software. Why do you think they push pre-owned games so hard? It's the only thing they make any real margin on.

 

[nynt9]

That is not true. Retailers make a couple bucks on new games. That's it.

See, here’s another misconception. They take a big cut, but they make a small profit because they have to pay their employees and all kinds of fees for the store. For second hand copies they don’t have to purchase them from the publisher so they can make a way bigger profit.

The cut they take is not the same thing as the money they make. You’re conflating the two things.

 

[Auctopus]

Wow, that's a lot.
A shame it wasn't enough though, it is a great game

I think the argument is that it wasn’t used efficiently, not that it wasn’t enough.

 

[KORNdoggy]

how is it ND can make uncharted games for $25 million and here's dead space costing $60 million

 

[Audioboxer]

how is it ND can make uncharted games for $25 million and here's dead space costing $60 million

1st party marketing/development (as in Sony/MS/Nintendo) is always going to be more efficient or have internal favours called in. DS2 should still not have been spending $60m on marketing if they blew $60m on development. $120m was just a ridiculous budget for this game, from whoever called the shots or decided that would be a good investment. Unless it was to be seen as a break-even/portfolio diverse title, which is clearly wasn't as it "underperformed". Like Sony see some of the games they make that aren't just getting made for profit. I doubt The Last Guardian, for example, is seen as a COD-profit machine.

EA can do that too considering they have complete cash cow games/series. However, it's abundantly clear EA want every game to be a cash cow. Good luck with that, you'll be left with FIFA/Battlefield/Battlefront/Destiny-Clones. Just please stop buying other talented studios who don't make games like that just to gut them a few years later. Studios, stop signing deals with EA. It doesn't end well if you value your artistic merit and aren't wanting to create FPS-whale chasing game number 946.

 

[nynt9]

how is it ND can make uncharted games for $25 million and here's dead space costing $60 million

Uncharted 2 didn’t have facial performance capture, was made for only one platform as opposed to 3, and it’s first party so they can utilize resources (tools, middleware, support) not available to third party devs.

The marketing for exclusive games is subsidized by the platform’s marketing as well.

 

[Callibretto]

Uncharted 2 didn’t have facial performance capture, was made for only one platform as opposed to 3, and it’s first party so they can utilize resources (tools, middleware, support) not available to third party devs.

The marketing for exclusive games is subsidized by the platform’s marketing as well.

I got impression that facial performance capture is actually cheaper than hand animating all those facial animation ala Uncharted 2 and 3, especially animating it at ND standard.

also, does Dead Space 2 even have a lot of facial animation? Isacc wear helmet most of the time, I don't think there's that many human npc either and you probably only see facial animation for cutscenes which again, I don't remember there being a lot of it.

 

[xrnzaaas]

It may look like they were burning through money too easily, but not if you remember where the studio is located. High costs of living have a huge impact on that figure.

 

[Wiped89]

If this is true why are digital games so expensive? Cut them to $50 in the US £35 in the UK to encourage people to switch. Publishers will still make a lot more per sale.

It is true.

And because they can. Businesses charge as much as they can get away with. Publishers make way more from digital. This is why we have digital pre order bonuses, digital special editions, etc etc. To push you into buying digital. There's also no competition on digital storefronts so there's no retailers fighting each other to bring prices down.

Why sell a game for £35 when you can sell it for £50?

In his mind, retailers are making off like bandits and many stores are opening up to take advantage of the ballooning retail industry space. Also in his mind, digital copies costing the same or more than physical copies is the result of retailers having to pay more for the associated cost of housing and maintaining binary digits.

I can't believe you're arguing about this. Retailers take a big cut but they have big overheads. Staff, rent, business rates, corporation tax, returns, unsold inventory, utilities. Honestly, it's clear from this thread that many of you have no idea about business. Which is fine, why should you if you never have been involved with one, but don't try to argue when you don't know what you're talking about.

 

[KarneeKarnay]

Lol that's because you don't understand basic economics.

EA does not take all $60. Not even close.

Of the $60:
-$5 for packaging and shipping
-$8 for platform holder's fee
-$20 to 30 for the shop/retailer's cut (really, the shop gets the largest slice by a mile)
The publisher is left with about $17-25 per $60 game. Less if there's taxes in the price too.

How it works is shops buy a bulk order of copies for a set price. So Amazon might buy 10,000 copies for x amount, working out at paying the publisher $20 a copy, then Amazon charges you $60. A smaller shop may only buy 500 copies, but because their order is small, they pay more like $30 per copy, making less profit for the shop but more profit per game for the publisher, but shifting fewer copies so making less money overall too.

This is how business works. Bulk = cheaper. Retailer margins = massive.

While I do think that assuming the 4 million copies was sold at $60 each, I do think you're not taking into account platforms like Steam or even applying your own use of bulk buying.

No way does an individual game disk cost $33-$44 to put on a shelf. If that were the case then assuming 1 million of the 4 million was physical, then they spent 33-44 millions dollars.

I've yet to see a budget break down, but aside from making the game, the thing that would have cost the most is marketing. I can see a game coming to 20 million or more. Halo 3 was around 27 million. However something here went massively wrong if it cost them $60 million to make Dead Space 2. That's almost half the budget of Capetian America: Civil War.

 

[jufonuk]

Dead Space 2 is honestly up there with Resident Evil 4 as two of the greatest survival horror games - a real shame it wasn't a bigger success.

I would say DS1 is better than 2 but those two games were some of the greatest Sci-fi horror survival games I played. the whole time playing it I was grinning and jumping and thinking this is like event horizon the game

 

[stranger79]

That is not true. Retailers make a couple bucks on new games. That's it.

Absolutely, I used to work in retail here in germany - and on new games it's more like 10 - 20 % of a 60 EUR game - nowhere near 20 - 30 EUR

The wholesale price the ratiler pays is usually about 50 EUR

 

[RoninChaos]

Aaaaah, San Francisco. Yeah let's set up shop in the most expensive part of the country outside of Manhattan.

I'm starting to think a large part of this issue is location in general. If it's too expensive to keep people in cali then setup shop some where else. I realize there's more to it than just moving but cost of living really needs to tie into this equation.

 

[TheMoon]

If this is true why are digital games so expensive? Cut them to $50 in the US £35 in the UK to encourage people to switch. Publishers will still make a lot more per sale.

These are debates from half a decade ago. Because you want retailers on your good side. And undercutting their price does not contribute to that, quite the opposite.

 

[fenners]

While I do think that assuming the 4 million copies was sold at $60 each, I do think you're not taking into account platforms like Steam or even applying your own use of bulk buying.

No way does an individual game disk cost $33-$44 to put on a shelf. If that were the case then assuming 1 million of the 4 million was physical, then they spent 33-44 millions dollars.

$60 retail game gets sold to the distributor for about $45. The distributor then sells it to retail. Sony/Microsoft typically charge about $15 for the platform fee + physical disc production. That leaves about $30 for the publisher. There's wiggle room based on the number shipped, the amount of co-marketing the platform holder kicks in, whether you own your own distribution etc.

For digital platforms like Steam, the platform holder typically takes 30%. So for a $60 game, they're taking $18, leaving the publisher with $42.

Digital prices aren't cheaper because retailers, where the bulk of initial sales are, want initial price parity to keep people coming to their stores.

This is not news. This is not made up. This is widely known in the industry, just poorly documented on the internet.

 

[sixteen-bit]

Never played DS2 but the first one was good. I gotta give it a try.

 

[Maxrunner]

So the dead space games are stuck in limbo with EA. Shame.

 

[TheMoon]

So the dead space games are stuck in limbo with EA. Shame.

Well, what else is new. The series was dead and buried ever since 3 came out and flopped.

 

[Wiped89]

While I do think that assuming the 4 million copies was sold at $60 each, I do think you're not taking into account platforms like Steam or even applying your own use of bulk buying.

No way does an individual game disk cost $33-$44 to put on a shelf. If that were the case then assuming 1 million of the 4 million was physical, then they spent 33-44 millions dollars.

I've yet to see a budget break down, but aside from making the game, the thing that would have cost the most is marketing. I can see a game coming to 20 million or more. Halo 3 was around 27 million. However something here went massively wrong if it cost them $60 million to make Dead Space 2. That's almost half the budget of Capetian America: Civil War.

Retailer margins are big because historically they have held all the power. All of it. Before the internet existed you literally couldn't sell a game without a shop. So shops could take a big cut. Hell, the reason games were set at $60 and not $40 was so that the publisher could make enough profit as well as the retailer.


But the shop is the one taking all the risk by renting a store, hiring staff, and taking a chance that your game will sell by ordering copies of it. That's why they have their margins. This is also why internet retailers have threatened stores; their overheads are lower so they can charge lower prices to undercut competitors.

 

[LordRaptor]

Here's the issue though, far more games exist on the market these days.

Not on consoles.

 

[MazeHaze]

The extreme ignorance on display in this threqd about how games are made and how business works is pretty astounding.

 

[fenners]

Not on consoles.

That chart's not showing what you said it is. It's saying fewer games released by the big publishers, but way more games in the market.

 

[gypsygib]

Time to outsource 60% of the tasks to China and India.

 

[TheMoon]

Not on consoles.

You're not reading the graph right. At all. It clearly shows there are a lot more games (hence the GAMES column being larger than in the past) but there are also more publishers, which is where the games-per-pub graph comes in that you misread somehow as there being fewer games. Actually reading what the elements mean helps.

But really though, even without a graph. Just looking at any storefront should tell you that what you said wasn't true.

 

[GOOCHY]

The extreme ignorance on display in this threqd about how games are made and how business works is pretty astounding.

Lay it all out for us, professor.

 

[Audioboxer]

Not on consoles.

That chart's not showing what you said it is. It's saying fewer games released by the big publishers, but way more games in the market.

Yeah, this.

If anything that chart is proving my point. Far more indie games and digital-only titles are arriving, some of which gain cult followings due to being quality/fun releases.

The big boys can cut down to their annual dudebro sports and shooting games if they want. I just hope this is a good warning for anyone approached by EA for a buyout.

 

[LordRaptor]

That chart's not showing what you said it is. It's saying fewer games released by the big publishers, but way more games in the market.

Overall title count has fallen, CosmicQueso needs to rehost his images not on photobucket.
There has been heavy consolidation in the console market, and digital only releases / indies have not even come close to making up the shortfall.

Like, it is hugely disingenous when talking about something like Dead Space 2 to be talking about "the industry" when a Dead Space 2 is not working in the same sphere as a Farmville, a Candy Crush or a League Of Legends.

e:

You're not reading the graph right. At all. It clearly shows there are a lot more games (hence the GAMES column being larger than in the past) but there are also more publishers, which is where the games-per-pub graph comes in that you misread somehow as there being fewer games. Actually reading what the elements mean helps.

Thats because the graph is framing things into PS360 / HD Twins / "Console core" only and ignoring Wii / Handhelds / Other.

People were more than happy for Ubisoft to take their profits from Just Dance / Imagine Babbyz and subsidise the development of Assassins Creed / Far Cry.
What happens when "the core" have to pay for their own unsubsidised titles? Endless bitching about how "nobody asked for bigger flashier games at the same price!"

 

[Linkstrikesback]

Not on consoles.

Er, the grey bar there is number of games released on consoles. It would have to be a very good argument to convince me that's getting smaller.

 

[TheMoon]

Overall title count has fallen, CosmicQueso needs to rehost his images not on photobucket.
There has been heavy consolidation in the console market, and digital only releases / indies have not even come close to making up the shortfall.

Like, it is hugely disingenous when talking about something like Dead Space 2 to be talking about "the industry" when a Dead Space 2 is not working in the same sphere as a Farmville, a Candy Crush or a League Of Legends.

e:

Thats because the graph is framing things into PS360 / HD Twins / "Console core" only and ignoring Wii / Handhelds / Other.

People were more than happy for Ubisoft to take their profits from Just Dance / Imagine Babbyz and subsidise the development of Assassins Creed / Far Cry.
What happens when "the core" have to pay for their own unsubsidised titles?

The thread you linked is also from 2014. Three years ago. The GDC graphic goes up to 2016, showing a huge rise between 2014 and 2016.

 

[KiNolin]

Hope that "Your mother hates Dead Space 2" marketing campaign was worth it

Oh man, that throwback you are giving me. I wouldn't have ever remembered this.

 

[Audioboxer]

Overall title count has fallen, CosmicQueso needs to rehost his images not on photobucket.
There has been heavy consolidation in the console market, and digital only releases / indies have not even come close to making up the shortfall.

Like, it is hugely disingenous when talking about something like Dead Space 2 to be talking about "the industry" when a Dead Space 2 is not working in the same sphere as a Farmville, a Candy Crush or a League Of Legends.

It is operating in the same industry as Until Dawn, Dying Light, SOMA, Outlast, Resident Evil, The Evil Within, Days Gone, etc.

Even System Shock is getting remade.

But but but these games don't have DS2s budget! Thatsmypoint. Be realistic about the horror game market, continue making games. Think everything can be COD, end up shutting studios under your own false expectations. EA is in the wrong here, not gamers. People need to stop trying to blame gamers for publishers dumb as rocks moves/expectations. Not everything can be Dudebro Sports 2018 MT "Games as a service" edition.