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[Ether_Snake]

This is not a news article or anything from Gamasutra but here goes anyway:

The game industry is getting increasingly competitive, development cost is rising constantly with the average big budget game costing over $40,000,000. Even if a game is excellent, its success is in no way guaranteed due to high competition and market saturation. But there is a potential solution.

A game's production cost should be relative to its success, not the other way around.

A high production value does not equal profitability anymore, as stated above. So the key is to release games as foundations which can then be expanded through additional development based on its success. This is, after all, what MMOs have been doing for some time. World of Warcraft's success is what determines how many new zones, enemies, and equipment Blizzard adds through updates. We tend to forget that this principle could easily be applied to practically any genre.

Little Big Planet will use this principle. If the game is a success, new features will be added, new items, new gameplay mechanics, which together will enable the game to remain fresh while at the same time enabling Media Molecule, and Sony, to keep development costs relative to the game's success. If it's not a hit, the game will remain as a one layer game. A full game on its own, but of relatively small scope. If the game is successful, new layers are added to the game. Not merely new levels, but new features or items that can all tie-in together with the previous ones in order to expand the gameplay's diversity.

Super Mario Galaxy could use this principle as well. The game world is made up of various planets separated from one another which you can travel back and forth to. Imagine if the first layer of the game released was the equivalent of a small solar system. Various planets that revolve around a bigger and more complete game-world. If the game is not a great success, it remains as is. Again, a complete game on its own, but of smaller scope. Yet if the game is indeed a success, new planets are added and linked to the previous ones, and the game expands from here. This is not merely additional levels. These new planets can be anything, from levels to chat-rooms to theater-like locations where you can view promotional material for other Nintendo products. Anything can be added if desired, and again all the while controlling development costs based on the game's success and player feedback.

GTAIV? Same principle as the one above. Liberty City is the core game, and new locations are added afterwards based on the game's success, all linked to the core game. New stores become accessible in Liberty City itself, where you can now play pool or exchange weapons, a destruction-derby-like event now becomes accessible, etc.

The problem with all of the above is that you still need an engine, and developing an engine remains one of the costliest aspects a game's development. But look at Gears of War. It would be relatively easy to make a fantasy game using that particular engine. So maybe we should see less entirely new games on the market, but more games that can be modified and/or expanded based on their successes? I wouldn't mind paying for the same Gears of War experience, simply in a different setting. If the game is fun why not? Crysis could easily become a Predator game. Metal Gear Solid 4 could be a Ghost in the Shell game. Soul Calibur could be modified to be a bit more RPG-esque, but keep the fighting part, and make a Claymore game out of it. Yet certain companies I won't mention keep developing whole new engines for each and every game they make, which is extremely costly.

Thoughts?

 

[Ghengis Cohen]

Where in christ's name did you pull out the 40 million dollar figure?

 

[Sharp]

Sequels are good.

 

[Prime crotch]

Where in christ's name did you pull out the 40 million dollar figure?

Shenmue?

 

[Dahbomb]

The only current "next-gen" game that is close to that $40,000,000 is Killzone 2. The average next-gen game costs way less than that, even the supposed megaton titles like Halo 3/Gears of War/Resistance/UT3.

 

[Ether_Snake]

The only current "next-gen" game that is close to that $40,000,000 is Killzone 2. The average next-gen game costs way less than that, even the supposed megaton titles like Halo 3/Gears of War/Resistance/UT3.

I can tell you with 100% certainty that this is not true. But I won't reveal which game cost as much because I work for that developer/publisher.

Plus games like GTAIV cost over 40,000,000.

 

[XiaNaphryz]

I can tell you with 100% certainty that this is not true. But I won't reveal which game cost as much because I work for that developer/publisher.

Plus games like GTAIV cost over 40,000,000.

I agree, and I also cannot give details due to a similar work situation.

 

[Ghost]

Solution: Program in managed code.



(please, i need a new job)

 

[Ghengis Cohen]

Forty million dollar games are exceptions not the rule. Some games do cost that much but in no way can you say that it is in any way average.

 

[Sharp]

I also work for a mystery publisher. My game costs a certain amount and uses state-of-the-art technology to create a world. It also has gameplay up the wazoo. But we only have one more week to finish it and my staff is composed of ten-year-old kids so it may not be feature-complete.

Spoiler

True story.

 

[CrushDance]

I can tell you with 100% certainty that this is not true. But I won't reveal which game cost as much because I work for that developer/publisher.

Plus games like GTAIV cost over 40,000,000.

Omg insiderz!

J/K.

Well I think you're right and this is going to start becoming a problem as "What can I put in and get out?" sort of thing. I think this is where Nintendo has done well and 3rd parties are licking it up.

 

[AAK]

Microtransactions and in-game advertising will most probably play some large roles in the future of this generation.

 

[usea]

I wanted to link you to a recent article from escapist magazine dealing with profitability, risk etc, but I just can't find it. Their site is ****ing TERRIBLE. What happened to the magazine layout?

 

[FrankT]

I was thinking about this the other day actually, but more on the line of how the heck are all these games going to make it this fall. I would imagine some very good games not seeing a nice return because of congestion. No less I would imagine the rising costs of making great games versus the return is becoming a growing issue.

 

[PantherLotus]

Interesting concept but I'm not certain that a single-tiered product can deliver enough to make a splash big enough to ever get to the next point in the cycle (additional support). I think we're dancing around the issue of Episodic content, which is not in itself a bad thing.

I think what you're suggesting would work, but to be able to continue to make money off of it (either through subscription or micropayments/upgrades), it would have to be a significant enough of a product to warrant an initial purchase.

I also think the game industry could model itself after the television industry, and quite easily too. Have a pilot (a demo) and a package (the first 8-12 episodes). The initial success will determine the future of that game. And still, we come back to a huge initial investment and a risk of reward. Look to the production of LOST, for example. 200 million development costs, and they weren't certain that it would pay off. Luckily, it did...and it was only through huge marketing efforts, an extremely compelling initial episode, and a fair amount of luck for it to happen.

So yes. And no. Close, but not exactly. Did that make sense?

 

[Salazar]

Screw waiting around for people to like / buy a game (perhaps far more often than not in vain) in order for it to get big / good / complete. Expansion packs are good - completion packs sound like a hammer-blow to my joy in games.

 

[itxaka]

+ than 40 million $???

Nintendo winning this gen confirmed. Easy development cost plus lot of consoles sell = $$$

I really see a problem with that, but or the videogames fanbase rises a lot (so the installed base is at lest 50 million consoles and you got a bigger audience for your games) or the industry is doomed.

 

[EMBee99]

You better get used to ads in games, guys.

 

[Ether_Snake]

Forty million dollar games are exceptions not the rule. Some games do cost that much but in no way can you say that it is in any way average.

Yes that is why I said the average big-budget game. The Halos, Killzones, Assassin's Creed, GTAs, etc.

I was thinking about this the other day actually, but more on the line of how the heck are all these games going to make it this fall. I would imagine some very good games not seeing a nice return because of congestion. No less I would imagine the rising costs of making great games versus the return is becoming a growing issue.

Yes I think that a lot of companies are going to hurt this year, unless gamers are willing to spend more money on this hobby than in the past, which is not out of the question in of itself. But add online multiplayer into the equation and you end up with people being able to enjoy their purchases for longer periods of time, which means less incentives to buy new games.

Interesting concept but I'm not certain that a single-tiered product can deliver enough to make a splash big enough to ever get to the next point in the cycle (additional support). I think we're dancing around the issue of Episodic content, which is not in itself a bad thing.

Yeah but the thing is we can assume that a smaller game would be sold for less, hence increasing its sale potential. Of course you couldn't expect Halo 3 to sell as much if the game was two hours long. It all ties in to what kind of game it is to begin with, and how it is presented and perceived, but Little Big Planet and Super Mario? I could see those taking such an approach.

 

[Kafel]

Ok.

Insiders tell us that developers lie on development costs. Good to know.

 

[Ether_Snake]

+ than 40 million $???

Nintendo winning this gen confirmed. Easy development cost plus lot of consoles sell = $$$

I really see a problem with that, but or the videogames fanbase rises a lot (so the installed base is at lest 50 million consoles and you got a bigger audience for your games) or the industry is doomed.

Well Nintendo has it right to some extent, but not completely. If Nintendo was all alone in the world, then fine, but third parties need to make money on the console. Imagine if everyone jumps onto the Wii ship, it will be the same problem. The competition will be too high, lots of companies may even do the right thing, make the good games, yet only a few would sell due to high competition. Just because a door is open doesn't mean that you could have hundreds of people pass through it at the same time. Nintendo on its own is very difficult to compete with on their own platform. I don't see the Wii as a solution in of itself. LBP is a good example of something that uses the same concept as Nintendo, but it would not be possible on the Wii. There are far more possibilities and possible revenue streams from PSN and XBox Live, especially with downloadable entertainment like movies and TV shows, music, etc., something much less prominent on Nintendo's platform, and much more open to third parties.

5 years from now this will be even more evident, and more revenue streams will have opened on those platforms. They just need to grow the userbase moreso. With the PS3 this is possible thanks to its Blu-Ray playback. With the 360 it is possible thanks to MS' Windows compatibility in certain areas.

 

[Terrell]

LBP is a good example of something that uses the same concept as Nintendo, but it would not be possible on the Wii. There are far more possibilities and possible revenue streams from PSN and XBox Live, especially with downloadable entertainment like movies and TV shows, music, etc., something much less prominent on Nintendo's platform, and much more open to third parties.

LBP couldn't be done on Wii? Ummm, aside from the graphics and the game being available as a download, what couldn't be done? You can upload camera photos to the console to give you custom textures, WiiConnect24 and Wi-Fi Connection would give you the opportunity to share content... the only difference is a graphics downgrade (but who even knows how severe that would be) and that the game would likely only be available on disc, which last I heard is also going to be available on disc on PS3. So yeah... kind of tells you how many people are going to download the game on PSN when Sony isn't making the content exclusively online.
And yeah, microtransactions? Considering the oh-so-clever nickname of "microtransrapements" that the content has received so far, it's a safe bet what 3rd-parties are doing with that revenue stream... gouging their customers. Need For Speed and "horse armor", anyone? I'm almost happy that developers aren't leaning on a microtransaction crutch with Wii.

 

[Core407]

There are a lot of ways to maximize the potential for big sales. Developers need to take advantage of what is at their fingertips and use these things to recoup costs associated with games today. Sony for example, seems to be releasing 1.5 HD versions of old titles and then dropping true sequels. Great idea that could be taken further. The idea of testing a concept with a small downloadable game is a great way to gauge the potential of an idea.

 

[Ether_Snake]

LBP couldn't be done on Wii? Ummm, aside from the graphics and the game being available as a download, what couldn't be done?

Physics and the amount of data stored in memory (which will likely require some help from the HDD). Probably other stuff too like subtraction/addition to geometry, among others.

 

[Xiaoki]

You use WoW as an example but estimates put the initial production cost of WoW at around $50 million and Blizzard has spent that same amount for 2 years of updates and an expansion.
MMOs can be very profittable even with only 150,000 subscribers but MMO players usually just subscribe to one at a time because of the monthly fee(which is why MMOs are so profittable).

Expanding games with lots of mini updates(like Thieves Den for Oblivion) is a great way to rake in the extra dough for minimal effort but the update needs to be worth it, otherwise the players will feel ripped off(like Horse Armor for Oblivion).

 

[Ether_Snake]

You use WoW as an example but estimates put the initial production cost of WoW at around $50 million and Blizzard has spent that same amount for 2 years of updates and an expansion.
MMOs can be very profittable even with only 150,000 subscribers but MMO players usually just subscribe to one at a time because of the monthly fee(which is why MMOs are so profittable).

Expanding games with lots of mini updates(like Thieves Den for Oblivion) is a great way to rake in the extra dough for minimal effort but the update needs to be worth it, otherwise the players will feel ripped off(like Horse Armor for Oblivion).

That sounds like a lot of money for WoW, but I'm not advocating the creation of more MMOs, just that investment should be proportional to success and not the other way around. And like I said not all games could be as such, a two hours long Halo or GTA would not fly. It requires a different approach to begin with. But companies need to stop making multiple high profile games at the same time, especially if they all use different engines. People are just not used at the idea of buying smaller less expansive games that can expand later on.

 

[Doc Holliday]

Well Nintendo has it right to some extent, but not completely. If Nintendo was all alone in the world, then fine, but third parties need to make money on the console. Imagine if everyone jumps onto the Wii ship, it will be the same problem. The competition will be too high, lots of companies may even do the right thing, make the good games, yet only a few would sell due to high competition. Just because a door is open doesn't mean that you could have hundreds of people pass through it at the same time. Nintendo on its own is very difficult to compete with on their own platform. I don't see the Wii as a solution in of itself. LBP is a good example of something that uses the same concept as Nintendo, but it would not be possible on the Wii. There are far more possibilities and possible revenue streams from PSN and XBox Live, especially with downloadable entertainment like movies and TV shows, music, etc., something much less prominent on Nintendo's platform, and much more open to third parties.

It didnt hurt third parties when the only machine worth making games for was the ps2 and the ps1 to some extent. They might even save cash by not having to port to so many games.

 

[Dr. Kitty Muffins]

1. Use in game ads

2. Outsource certain select areas like Q&A and others.

3. Choose a base of operations located in a state/country that is business friendly, which means not neccesarily based in California.

4. Use the Unreal 3 engine for a quicker start.

5. Seek alternate sources of funding ala Bioware/Pandemic.

6. Work with Mistwalker (joke)

 

[Ether_Snake]

It didnt hurt third parties when the only machine worth making games for was the ps2 and the ps1 to some extent. They might even save cash by not having to port to so many games.

Market was smaller, less competition.

 

[Decado]

$40m for GTAIV? That seems insane. Don't see where the money is going.

Last I heard on the subject, I think Crysis was mentioned as being the most costly game in development at $20m. Not sure how "official" it is, though.

 

[itxaka]

That sounds like a lot of money for WoW, but I'm not advocating the creation of more MMOs, just that investment should be proportional to success and not the other way around. And like I said not all games could be as such, a two hours long Halo or GTA would not fly. It requires a different approach to begin with. But companies need to stop making multiple high profile games at the same time, especially if they all use different engines. People are just not used at the idea of buying smaller less expansive games that can expand later on.

I think that more than expand games you gotta have 2 lines of commerce as nintendo hopefully will have.
1 of them should be the "hardcore" way as having rpgs of 60+ hours and games really deep and inmersive that are gonna cost +20$ million and are gonna sell 800k copies at best
2 of them, wii fit, brain academy, wii sport, "casual" line, short games (if you want expandable as well) that are easy to come by, to play at and to develop them and are gonna sell +2 million copies thus keeping them very profitable.

Is the only way I see the industry should get going as no mass effect, halo3, assasin´s creed on 2 months are gonna turn very profitable as they collide in the customer´s pocket.

Also, Sony is doing great on their platform with this issue as they are gonna have games presumably cheap to develop that appeal to the public, (LBA for casual and warkhawk for hardcore) along with hardcore titles that are more money consuming.

 

[Grayman]

I think games will get shorter, AGAIN. Games will have the same quality but less artist working on them.

I also wouldn't be surprised if companies make some games with cheap assets but crank up the AA, AF, or other effects instead of hiring more artists. Quake 3 still looks ok today with video cards forcing some enhancements.

Pushing online play more might cut down on used game sales slightly as well.

That sounds like a lot of money for WoW, but I'm not advocating the creation of more MMOs, just that investment should be proportional to success and not the other way around. And like I said not all games could be as such, a two hours long Halo or GTA would not fly. It requires a different approach to begin with. But companies need to stop making multiple high profile games at the same time, especially if they all use different engines. People are just not used at the idea of buying smaller less expansive games that can expand later on.

I don't know what the concrete reasoning is but generally MMOs seem to cost exorbitantly more money than other games.

 

[Somnid]

I think Nintendo's solution is about the only viable one at this point in time. I mean 360 owners seem to have tons of disposable income with the amount of games, marketplace content, and accessories they buy but they can't support the industry like that. It's only a matter of time before their dollars are spread thin and the whole thing caves. Basically, companies must branch out to other audiences, this industry game of sequels and shooters saturating the market isn't helping things either.

 

[Gokurakumaru]

Multiplatform. It's a good thing, not a bad thing.

 

[Ether_Snake]

1 of them should be the "hardcore" way as having rpgs of 60+ hours and games really deep and inmersive that are gonna cost +20$ million and are gonna sell 800k copies at best

No game that cost 20 million should sell only 800k. Any high budget games should sell at least a million worldwide and hopefully generate its biggest share of profits with a cheaper-to-develop sequel, like let's say Dead Rising 2 or Lost Planet 2.

I think games will get shorter, AGAIN. Games will have the same quality but less artist working on them.

But art, while expensive to some extent, is the least risky aspect of development. It's very straightforward, the tools make it easier to produce high quality assets at greater speeds, etc. Programming is where a lot of money is spent, often because new games require new engines to meet their ends. Look at how many games you could create out of a Zelda or a Final Fantasy. Just change the art, make new levels, you're done. But add programming and not only do you end up with a different, unproven concept, but you face the risk of realizing late in production that what has been programmed just doesn't work, it's too complex, and it needs to be scaled back. You could easily take a game like Resident Evil and tweak a few aspects of it to end up with a whole new and fun game.

Look at Dark Sector. A company is paying millions to arrive at the same conclusion that Capcom reached before. Yet while they develop Dark Sector, Capcom will build up on RE4 to make its RE5, most likely surpassing any other similar game on the market. That's how profitable it can be to build up from a foundation. Heck, Resident Evil, Dino Crisis, Onimusha, Devil May Cry, and more, were all using the same engine and same foundations, they just changed the art in the end, and tweaked the games a bit. But overall Capcom saved a lot of money (at least if they were smart about it, who knows).

I think Nintendo's solution is about the only viable one at this point in time. I mean 360 owners seem to have tons of disposable income with the amount of games, marketplace content, and accessories they buy but they can't support the industry like that. It's only a matter of time before their dollars are spread thin and the whole thing caves. Basically, companies must branch out to other audiences, this industry game of sequels and shooters saturating the market isn't helping things either.

The 360 and PS3 are going to be doing that. People already spend money on movies and music, what Sony and MS are trying to do is have people spend that money through their consoles. That is the purpose of making the consoles entertainment hubs. Nintendo can really only sell games. So in the long run I think Sony and MS are better positioned to open up revenue streams for the industry. I am pretty sure that Nintendo will have to rely on hardware sales to keep on making money, mainly through the release of accessories and other such cheap but profitable gimmicks, with new console versions released as the years go by. They have been doing that for years and it's already shaping up to be the case with the Wii (k I expect to be flamed for that ).

 

[itxaka]

No game that cost 20 million should sell only 800k. Any high budget games should sell at least a million worldwide and hopefully generate its biggest share of profits with a cheaper-to-develop sequel, like let's say Dead Rising 2 or Lost Planet 2.

Well, it was an example, i meaned a game that cost 40$ million how many copies has to sell to cover the cost of just creating the game.

Also, very good point on the sequels, didn´t think about that but i assume this generation they are going to cover the cost of the games with that, but for a normal developer, will they throw it all at a game that just could have a sequel? it´s a bit risky as if your game is a flop, well, your´re pretty fu**ed up with a sequel that has to be an AAA game to sell a cover cost for the first flop and the sequel.

 

[Defuser]

Isn't development cost always high when beginning on a new console?

 

[VultureDude]

anyone wanna guess how much money has been put into Duke Nukem Forever? :lol

 

[Ether_Snake]

Well, it was an example, i meaned a game that cost 40$ million how many copies has to sell to cover the cost of just creating the game.

A lot of companies right now are making games knowing they won't make a profit on the first title, as crazy as it may sound, but instead on each sequel. The first game asborbs the development cost of the engine and all things like animations, etc., then everything is re-used for the sequels which are released a year later.

It's a pretty bad way to do things IMO, because it is very difficult in this gen to release a sequel every year due to longer development times, but logically it should be possible if planning is good.

 

[itxaka]

A lot of companies right now are making games knowing they won't make a profit on the first title, as crazy as it may sound, but instead on each sequel. The first game asborbs the development cost of the engine and all things like animations, etc., then everything is re-used for the sequels which are released a year later.

It's a pretty bad way to do things IMO, because it is very difficult in this gen to release a sequel every year due to longer development times, but logically it should be possible if planning is good.

Wow, that a bit crazy and sad for the studios.
It´s not easier to buy the UE3 (700k $ IIRC?) and develop on top of that? as you can use it many times for different types of games and the staff gets used to an engine with a lot of support. Well not in case of big companies like capcom that can make their our engines.

EDIT: I´m dying to know what you are working on as it must be a BIG game to cost that sum.

 

[Linkup]

All three make their money through software. Some choose to also make money on hardware. The best additional revenue stream that the gaming industry can get is additional software sales since it is where the most profit comes from.

 

[KLoNe]

anyone wanna guess how much money has been put into Duke Nukem Forever? :lol

My guess is $40 Million EXACTLY.

 

[Pachael]

I think Nintendo's solution is about the only viable one at this point in time.

Killer app of the future: Wii Dating!

 

[Caesar III]

$40m for GTAIV? That seems insane. Don't see where the money is going.

Last I heard on the subject, I think Crysis was mentioned as being the most costly game in development at $20m. Not sure how "official" it is, though.

Anno 1701 was the most expensive german game so far with $10m.!

Where the money goes? in manhours!

Developing today needs hundreds of men and they want to get money for their work.

if there work 120 men at a game, that would mean 120x $30(per hour) x 9h(a day) = $32400 a day just for the men working on the title! And most of them get more than $30.

if they work for 2 years, ...

just a senseless example, but to think about

 

[Ranger X]

Still games are expensive to make and devs costs are rising faster than potential sales. This means trouble even for beginner business men. I personally don't like the idea of adding to a game "if it's successfull". This will encourage the game to go barebones, we could have half of an experience at first buy. Also, all people that won't have the mainstream taste will get shafted and their beloved games will not receive support. It really isn't a model to go by.

 

[Visualante]

The answer is to put Tarantino's name on it even though he had nothing to do with it.

 

[EverSoTrendy]

Shit, 40mill for a game? Man, I would never front the cash for such projects. That's madness.

 

[Gantz]

Game companies should work more on gameplay than graphics these days, oh wait... :lol

 

[Skiptastic]

Madness? THIS IS GAMING!

In regards to the OP, my guess is that games like Rock Band and Guitar Hero will eventually go down this path. Rock Band should be the only version on this generation of games, with any updates coming through Xbox Live or PSN. All the rest of the content that will be updated should be through downloadable content. New songs? Download em. New characters? Download em. New arenas? Download em. This should open up new ways of paying for content and should lead to profitability. I think that GTAIV's episodic content will be a nice litmus test for profitability of downloadable content on the console side.

And yes, development costs should rise if the game is successful...but if you don't put in the development costs at the beginning, there is a chance your game will not be as good, which will hinder its chances at success. So it's a catch-22.