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[Nirolak]

Is that all in? I.e. including marketing etc

Development. Mind, marketing is usually high efficiency digital marketing these days instead of expensive TV football ad buys, so some amount of cumulative spend has went out of marketing and into development.

Like if you imagined Horizon as an $80 million game with a $40 million marketing budget it would be the same as Dead Space 2’s $60 million development + $60 million marketing budget.

Digital margins also help a lot these days with cost recovery. See this thread about how The Witcher 3 saw 25% of its sales digitally, but those represented 50% of the revenue they actually saw from the game: http://m.neogaf.com/showthread.php?t=1116442

 

[DocSeuss]

The 'huge cut' involves printing, packaging, shipping, retail, returns, and a bunch of other stuff. I always find that kind of thing weird. I remember a guy on my team getting mad that retail takes a cut, and it's like... they got servers to run and stuff, like, that's just part of the cost. None of us were ever owed the total $60. That's the cost of manufacturing and everything.

Pubs get around $27 out of every $60 game.

That budget isn't actually too high. Shame that they couldn't make money from it. Making a comparable game today would probably cost at least 100.

How is $120m not too high?

Most linear games cost nowhere near that much.

Dead Space had pretty basic combat and enemies. There was a reason you could beat the game using just the plasma cutter (and it was the preferred weapon too).

Dead Space had more enemies, encounter variety, and combat specifics than Resident Evil 4, and iirc you can beat Resident Evil 4 with just the pistol. Sure, you don't have the QTE suplexes, but that's not really THAT much more in-depth than what Dead Space tries, and obviously Dead Space has way more depth with things like the telekinesis, stasis abilities, and enemies who just plain do more stuff.

 

[Uno Venova]

The MP was likely a fraction of the cost of the SP. Especially considering that it was made from SP assets. Do a breakdown really quick of each department and explain how they mishandled the budget?


According to what metric?

Well what was the average cost of AAA development in 2011? That would help us figure out the metric.

 

[Niceguydan8]

It is too high. 60 mio for the game, 60 mio to promote it. Thats insane for this game. Witcher 3 cost 30 mio. Zelda BotW would have been profitable if it sold 2 mio. If you have to sell 5 mio untill you make profit you probably shouldn't make the game to begin with, if it's not GTA 5.

You have to realize how poor some of these comparisons are, right? The Witcher was made in country that has entirely different rules/regulations/wages.

 

[Fafalada]

$150k/year sounds insane to me.

Typically(back when DS1 was out) cost of a headcount to the company could be estimated as salary*2 - at least for studios in US, so earnings would only be half that.
Chances are overhead costs are even worse a decade later, at least in areas like San Francisco.

 

[Audioboxer]

Getting flashbacks...


A horror game that was slightly adjusted to market trends AND was very heavily marketed. It wasn't mismanagement. It was an incredibly ambitious game.

Yes it was mismanagement if it didn't make a profit yet they thought the first game at 2 million sales was a success. The sequel managed twice that, that is a 100% improvement but EA somehow find themselves losing money?

What part of not making a profit isn't mismanagement to you when you seemingly managed it on the first entry, as a new IP with all the assets being created from scratch? Dead Space 2 didn't need to be created from scratch like DS1.

EA going from being happy at 2 million sales to stating 5m+ sales just to survive on a horror game is mismanagement of an IP. Visceral studios is now dead.

 

[The Technomancer]

So they made less than $15 per copy sold? Even allowing for a lot of copies being sold at a discount I thought it would be higher than that. Nevertheless, if this is a justification for trying to fleece consumers rather than address the industry's own bad practices it's a pretty weak one.

At retail? Yeah that's about right. Retail margins are big, then the publisher takes their cut, it all adds up aggressively.

 

[Memento]

It is too high. 60 mio for the game, 60 mio to promote it. Thats insane for this game. Witcher 3 cost 30 mio. Zelda BotW would have been profitable if it sold 2 mio. If you have to sell 5 mio untill you make profit you probably shouldn't make the game to begin with, if it's not GTA 5.

The Witcher 3 cost $30m?

If true... how?

 

[Joeku]

The Witcher 3 cost $30m?

If true... how?

Warsaw vs San Francisco.

 

[Cub3h]

I'm still slightly baffled at the $60M, not so much the breakdown of costs but more how other publishers seem to be able to produce high end games for much less.

Breath of the Wild was in production for what, five years? According to Nintendo they needed to sell only 2 million copies of that game to break even. Is that purely the cost of the Bay area vs somewhere else like Japan?

 

[nynt9]

The Witcher 3 cost $30m?

If true... how?

Poland.

I'm still slightly baffled at the $60M, not so much the breakdown of costs but more how other publishers seem to be able to produce high end games for much less.

Breath of the Wild was in production for what, five years? According to Nintendo they needed to sell only 2 million copies of that game to break even. Is that purely the cost of the Bay area vs somewhere else like Japan?

First party game marketing is subsidized by platform marketing, they can use platform tools and expertise to develop. They have less platforms to test for so less QA.

 

[KHlover]

The Witcher 3 cost $30m?

If true... how?

Wages in Poland are...not high. Rent is low, utility bills are low.

 

[Aces&Eights]

We really need a thread for all the different dev costs vs ROI for games. I would sub for sure. This stuff is just fascinating.

 

[RedSwirl]

Dead Space had more enemies, encounter variety, and combat specifics than Resident Evil 4, and iirc you can beat Resident Evil 4 with just the pistol. Sure, you don't have the QTE suplexes, but that's not really THAT much more in-depth than what Dead Space tries, and obviously Dead Space has way more depth with things like the telekinesis, stasis abilities, and enemies who just plain do more stuff.

RE4 (and basically every RE game leading up to it) is beatable with just the knife. And that's not a bad thing.

 

[CronoShot]

Selling 4 million copies of a single player game wasn't profitable?

What the heck were their expectations for it?

 

[Rosstimus]

Many people would be fine with a great game on a more modest budget.

For example, almost no one asked for multiplayer in Dead Space 2.

$60 is absolutely feasible for a video game, but budgets will need to be reigned in, big time.

BotW was likely created with a fraction of the budget of many AAA titles and it's going to end up selling 10 million copies and likely stay the highest rated game of the generation.

That being said, companies like EA, Activision, Warner Bros., etc. aren't going to change their business model anytime soon. In most cases, it works for them.

Keep in mind, video games today cost more to make than they did in the 360/PS3 era regardless of inflation. Now consider that $60 in 2005 money (The year the 360 was released) is over $75 in 2017. Game prices not rising with the rate of inflation is causing an untenable situation. Maybe an unpopular opinion, but raising the price of AAA games to at least $70 will be good for the industry and good for consumers.

 

[Kremzeek]

spend your marketing budgets smarter, gaming industry.

i don't understand why marketing budgets are expensive nowadays, since they can just throw ads up on YT, Twitter, FB, etc. and that's a whole lot cheaper than the old model of print, billboards, magazine ads, TV commercials etc.

 

[LOLCats]

this seems weird to me, I thought this game sold like gang busters. I'm not a horror guy so i never played, but i thought this was a well loved and was a success.

 

[Triggerhappytel]

Are we sure "wasn't enough" means not profitable? Maybe they felt it wasn't worth the return on investment? And this is why I'm not against cosmetic loot boxes.

I feel the second tweet about the marketing budget and retailer/console vendor margins implies that very heavily.

He doesn't know if it was profitable, but if came in under EA's expectations:

https://twitter.com/covernode/status/920421025405440000

 

[Kill3r7]

Keep in mind video games today cost more to make than they did in the 360/PS3 era regardless of inflation. Now consider that $60 in 2005 money (The year the 360 was released) is over $75 in 2017. Game prices not rising with the rate of inflation is causing an untenable situation. Maybe an unpopular opinion, but raising the price of AAA games to at leas $70 will be good for the industry and good for consumers.

Might work for certain niche games. However, how many mass market consumers would you lose because of a price hike? The mass market, generally speaking, is very price sensitive.

 

[Random Human]

.

 

[Crossing Eden]

Well what was the average cost of AAA development in 2011? That would help us figure out the metric.

Depends on the project.

Yes it was mismanagement if it didn't make a profit yet they thought the first game at 2 million sales was a success.

What part of not making a profit isn't mismanagement to you when you seemingly managed it on the first entry, as a new IP with all the assets being created from scratch? Dead Space 2 didn't need to be created from scratch like DS1.

What you're basically arguing is that every game that didn't make a profit mishandled their budget. That's not how it works. Secondly, It wasn't created from scratch. But still a shit ton of work went into it as it's a larger and more amibtious game than the first one. Look at all the effort that went into just one small sequence during the intro of the game.

EDIT:Witcher 3 cost 81 million to develop and market, where are people getting the 30 mil number from?

 

[LordBaztion]

I wonder how Dishonored 2, Evil Within 2 and Prey did despite their smaller marketing budgets

 

[Memento]

Warsaw vs San Francisco.

Poland.

Wages in Poland are...not high. Rent is low, utility bills are low.

Wow, the difference from country to country is absurd then because that game is like the first thing I think when high budget comes to mind. I mean, 4 years of development, huge open world, a lot of dialogue and performance capture, huge amount of quality assets, etc etc.

Fucking crazy.

 

[badflame]

Some other budgets: https://kotaku.com/how-much-does-it-cost-to-make-a-big-video-game-1501413649

 

[SatelliteOfLove]

Looks like it's not just making the game that's causing the issues. It's marketing it.

It's like some sort of weird closed data curve. "We need to market it to sell more. But we need it to sell more to make up for the marketing. So we need to market it to sell more."

Generation 7 in a nutshell. Have been beating this drum for YEARS and all most would see was the trees.

 

[scitek]

And this is why we see like a fraction of the AAA games that we used to see released.

The market's refusal to go above the $60 price tag killed games like this.

If you bump the price of games even higher, fewer copies will sell across the board.

 

[Audioboxer]

Depends on the project.


What you're basically arguing is that every game that didn't make a profit mishandled their budget. That's not how it works. Secondly, It wasn't created from scratch. But still a shit ton of work went into it as it's a larger and more amibtious game than the first one. Look at all the effort that went into just one small sequence during the intro of the game.

I'm arguing that EA expecting a horror franchise that sold 2m copies first time around to blast a combined cost of 120m+ out of the park was mismanagement. You still haven't answered me how anyone could possibly have thought a horror game was easily doing that?

Even then it sold twice as much as the first game, 2m sales up to 4m sales and that seemingly wasn't enough. At some point you've got to agree those project projection requests were mismanaged and completely unrealistic.

 

[Joeku]

Wow, the difference from country to country is absurd then because that game is like the first thing I think when high budget comes to mind. I mean, 4 years of development, huge open world, a lot of dialogue and performance capture, huge amount of quality assets, etc etc.

Fucking crazy.

FWIW Dead Space 2 is still one of the most lavishly-produced AAA games ever, and it fucking shows, but yeah, wages and cost-of-living vary heavily depending on where things are developed.

 

[KahooTs]

Intimate atmospheric survival horror games shouldn't need that sort of budget.

 

[Sanke__]

With numbers like that.......there should be a full blown fraud investigation immediately

 

[TwilightPrincess]

You have to realize how poor some of these comparisons are, right? The Witcher was made in country that has entirely different rules/regulations/wages.

Last i heard techfirms in poland didn't pay that bad, but yes, they probably pay less. Doesn't really matter for the comparison, it was one example and it's even a bigger game, years later with 200-300 people working on it. Same for Botw (2 mio+ sold copies to break even).

I do realize, that the budget (120 mio) for DS2 was too big, it burned money despite selling double the amount of it's predecessor (which was profitable). So what's your point?

 

[g23]

Jesus when is the AAA video game bubble finally going to burst. This is not sustainable.

 

[Kill3r7]

I'm arguing that EA expecting a horror franchise that sold 2m copies first time around to blast a combined cost of 120m+ out of the park was mismanagement. You still haven't answered me how anyone could possibly have thought a horror game was easily doing that?

Even then it sold twice as much as the first game, 2m sales up to 4m sales and that seemingly wasn't enough. At some point you've got to agree those project projection requests were mismanaged and completely unrealistic.

L4D sold 12M copies around the same time. Completely different games and genres (technically) but I am willing to bet that there is a deck out there with a L4D billet point as projected sales.

 

[Lord of Ostia]

I'm still slightly baffled at the $60M, not so much the breakdown of costs but more how other publishers seem to be able to produce high end games for much less.

Breath of the Wild was in production for what, five years? According to Nintendo they needed to sell only 2 million copies of that game to break even. Is that purely the cost of the Bay area vs somewhere else like Japan?

Yes, it is cheaper in Japan. Japanese developers make lower salaries than American devs as well, in general. The Bay area is insanely expensive.

 

[SomedayTheFire]

With numbers like that.......there should be a full blown fraud investigation immediately

Why? It doesn't sound that outlandish considering where it was made. think about it for a minute before jumping to conclusions.

Last i heard techfirms in poland didn't pay that bad, but yes, they probably pay less. Doesn't really matter for the comparison, it was one example and it's even a bigger game, years later with 200-300 people working on it. Same for Botw (2 mio+ sold copies to break even).

I do realize, that the budget (120 mio) for DS2 was too big, it burned money despite selling double the amount of it's predecessor (which was profitable). So what's your point?

They don't pay that badly for Poland. It still doesn't stack up to other countries.

 

[Luxorek]

It is too high. 60 mio for the game, 60 mio to promote it. Thats insane for this game. Witcher 3 cost 30 mio.

Yeah, not true. It was 81 mln USD total.

 

[Audioboxer]

L4D sold 12M copies around the same time. Completely different games and genres (technically) but I am willing to bet that there is a deck out there with L4D as projected sales.

L4D is a co-op MP game marketed by Valve. DS2s MP was tacked on garbage. At no point during development should anyone have been thinking yes, L4Ds 12 million sales, 10 million more than DS1 seems reasonable to budget on... C'mon.

I am not arguing the point but that is how these things are pitched and talked about.

Well if someone bought into that pitch that is... complete mismanagement of the IP and unrealistic targets.

 

[Kill3r7]

L4D is a co-op MP game marketed by Valve. DS2s MP was tacked on garbage.

I am not arguing the point but that is how these things are pitched and talked about.

 

[Lord of Ostia]

I am not arguing the point but that is how these things are pitched and talked about.

Proving his point that the project was mismanaged by EA though.

 

[Crossing Eden]

I'm arguing that EA expecting a horror franchise that sold 2m copies first time around to blast a combined cost of 120m+ out of the park was mismanagement. You still haven't answered me how anyone could possibly have thought a horror game was easily doing that?

Even then it sold twice as much as the first game, 2m sales up to 4m sales and that seemingly wasn't enough. At some point you've got to agree those project projection requests were mismanaged and completely unrealistic.

2m for a new IP in the context of last gen was very noticeable. So obviously EA was willing to fund a more ambitious sequel that had a ton of work put into it. Back at that time, the horror genre wasn't anywhere near as dead and unprofitable as it is today. You're basically faulting the devs for being ambitious and the pub for heavily advertising their new ambitious game. You're also not taking into account the cut from console makers and retailers.

Proving his point that the project was mismanaged by EA though.

Again SP is where most of the budget for development went. And that's what they advertised the most. L4D is a really stupid comparison as it appeals to a completely different market entirely.

 

[Audioboxer]

2m for a new IP in the context of last gen was very noticeable. So obviously EA was willing to fund a more ambitious sequel that had a ton of work put into it. Back at that time, the horror genre wasn't anywhere near as dead and unprofitable as it is today. You're basically faulting the devs for being ambitious.

And you know what, sometimes unreasonable ambition is a fault, if it costs you money. It's arguably killed the studio whoever thought these pitches and projections for Dead Space were reasonable. Most games going from 2m to 4m would be seen as a success.

 

[LukasTaves]

How does that happen?

Uncharted 2 had a ~15 hours high quality singleplayer campaign with some of the most impressive graphics and performance capture of its time + addition of a Multiplayer mode + a COOP mode + Naughty Dog size which is not small at all.

HOW DID DEAD SPACE 2 COST 40 MILLION MORE???

It makes no sense to me.

But then again, Tomb Raider 2013 budget was like the entire Uncharted trilogy... which seems so crazy for me too.

ND apparently makes their devs work overtime, and for free.

Dead Space 2 is at least a project of similar scope, that had to tackle 3 platforms at once, and they shifted to lead on Ps3 , including research to get most out of it.

Tomb Raider 2013 was also a very ambitious project. On the tech alone, it had larger play areas than uncharted, but maintaing similar visual fidelity, that doesn't come for free.

There's also the possibility of the $20 million for Uncharted 2 being a mispoke. IIRC that was the same budget as the first, which back then was at the higher end of AAA costs. With every sequel back then costing significantly more it would have been a feat to keep the costs the same.

 

[Audioboxer]

ND apparently makes their devs work overtime, and for free.

Dead Space 2 is at least a project of similar scope, that had to tackle 3 platforms at once, and they shifted to lead on Ps3 , including research to get most out of it.

Tomb Raider 2013 was also a very ambitious project. On the tech alone, it had larger play areas than uncharted, but maintaing similar visual fidelity, that doesn't come for free.

There's also the possibility of the $20 million for Uncharted 2 being a mispoke. IIRC that was the same budget as the first, which back then was at the higher end of AAA costs. With every sequel back then costing significantly more it would have been a feat to keep the costs the same.

At the time that was answered as follows

Naughty Dog bosstype Evan Wells has said Uncharted 2: Among Thieves will cost USD 20 million to make.

That's the same as Uncharted 1, but this time there's no need to build an engine for PS3 from scratch.

Ultimately we won't know if that was truly the final cost as someone rightfully pointed out that EG interview was prior to release.

 

[Kill3r7]

L4D is a co-op MP game marketed by Valve. DS2s MP was tacked on garbage. At no point during development should anyone have been thinking yes, L4Ds 12 million sales, 10 million more than DS1 seems reasonable to budget on... C'mon.



Well if someone bought into that pitch that is... complete mismanagement of the IP and unrealistic targets.

Proving his point that the project was mismanaged by EA though.

Correct but a lot of these projects won’t be greenlit if there isn’t massive growth. That is hard to achieve for certain genres. So developers will add and tinker with the formula to capture the larger market. The lead for DS3 had an interesting quote about DS3 development and Destiny 2.

 

[thepenguin55]

Keep in mind, video games today cost more to make than they did in the 360/PS3 era regardless of inflation. Now consider that $60 in 2005 money (The year the 360 was released) is over $75 in 2017. Game prices not rising with the rate of inflation is causing an untenable situation. Maybe an unpopular opinion, but raising the price of AAA games to at least $70 will be good for the industry and good for consumers.

I would far prefer to pay $80 for just a base AAA game than see everything go down the “games as a service” path. Of all the gaming trends that have come and gone over years “games as a service” is the only one to elicit just a feeling of utter disgust from me. Even more so now that I know that GAAS is causing the cancellation of (likely) good games. As far as AAA games go I’ll soon only have Nintendo to turn to.

 

[Jigorath]

Since Horizon hasn't even sold the gangbusters 4 million copies (and it is gangbusters) does that mean Horizon likely wasn't profitable?

Last known sales figures for Horizon had it at 3.4m copies sold at full price.

Unless the budget was astronomical it's hard to believe it isn't profitable.

Dead Space 2's issue might have been that most of its sales were at bargain bin prices.

 

[Renekton]

By making a compeletly unnecesarry multiplayer mode, and running an ad campaign that hurts more than helps. But you will never see “EA marketing department got hit by layoffs.”

MP is normally a very small fraction of total dev cost.

 

[Sanke__]

Why? It doesn't sound that outlandish considering where it was made. think about it for a minute before jumping to conclusions.


They don't pay that badly for Poland. It still doesn't stack up to other countries.

An EA investor call said 2 million of those sales were week one

That is double the production budget in one week in sales

That would be a huge success for a movie

There is money missing somewhere

And the Poland thing:
Not sure about tech companies but I work as an analyst at a bank, over half of my department is in Poland, they make about 1/4 the salary of someone in the US with the exact same job

 

[Crossing Eden]

And you know what, sometimes unreasonable ambition is a fault, if it costs you money. It's arguably killed the studio whoever thought these pitches and projections for Dead Space were reasonable. Most games going from 2m to 4m would be seen as a success.

Yea again you're faulting them for being ambitious with their sequel to their well received multimillion IP. They created one of the best sequels of last gen. Dead Space 2 didn't kill the studio. That's completely ignoring the context of what happened after they made that game. AND, what you're still not taking into account is that even tho they sold 4m, not all of those were at full price.

Correct but a lot of these projects won't be greenlit if there isn't massive growth. That is hard to achieve for certain genres. So developers will add and tinker with the formula to capture the larger market. The lead for DS3 had an interesting quote about DS3 development and Destiny 2.

Even DS2 had a lot of macro and micro design choices to accommodate a broader audience appeal.