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[nynt9]

The Kickstarter bit is an incredibly stupid example that is honestly insulting to the intelligence of the reader. An indie or passion project is not paying anything near the salaries of a AAA studio and they're not leasing a California Metro high rise (if any at all). They have the overhead "footprint" of a very small business, which is nowhere near $10,000/head...unless you think your corner barber or bobble shop is doing $50,000 a month.

That number is before California costs anyway. You want to pay health insurance and whatnot to your employees. Software engineers are expensive. There's electricity and other expenses, office supplies, some baseline rent, etc. It can easily run up. You want to pay your devs a livable wage, and you also don't want to work them 100 hours a week. Man hours aren't free.

And it will only keep increasing, while game prices stay stagnant. Yet the demand for art and acting also keeps increasing, so keep that in mind when criticizing monetization models of games. The money for all that content and polish needs to come from somewhere. Games have been $60 for decades yet they're so much more expensive to make now.

 

[The End]

Well, it depends on how indie they are really. Most 5-man teams may not have offices, are using their own equipment/software, and are probably only paying themselves a pittance.

There's a mountain of difference between like, Yacht club games (who lived at home and paid themselves nothing so they could afford to finish their game) and like, what Obsidian/Harmonix did (pay a full-time, salaried staff). That's not even getting into overseas devs like the RE:Legend guys who can use cheaper cost of living to stretch their dev budgets much farther.

For real though, if you're an indie dev trying to crowd-fund your game stay the hell away from NY/SF/LA/Seattle. Your money will go a lot farther in the midwest.

 

[NoPiece]

Yes, but the developers largely see very little of that money. Profitability of publishers has just continued to grow year over year, especially with DLC and microtransaction practices. They do hide a large amount of money away and avoid paying tax on it, then reap the benefits. That's why you see companies like Amazon trying to get into the big publisher game, if you have the funds and the clout there is a ton of money to be made in this industry. That's also why so many independent devs have shuttered. It's nearly impossible for them to keep up with costs, especially working based on contracts and seeing very little of the return even if your project is a success.

This is only true if you are looking very narrowly at a few successful companies, for a few recent years. Publishing has been a brutal business, E.g., Acclaim, THQ, Atari SA, 3DO, Crave, Majesco. Even the successful companies today had some precarious times, EA was a losing hundreds of millions a year for years in a row around 2008.

 

[senj]

That's what that post said.

Also, did people not think video games cost a lot of money? A shorter version of this article would have read something like "Just read the credits to any Assassin's Creed game."

Eh, you see all sorts of pushback on the internet questioning why things like the small 5 person indie team example need a million dollars to make their game.

People understand in an abstract sense that videogames are expensive to make, but they don't really grasp how that scales upwards or downwards to teams of different sizes and how it functions mostly independently of things like a game's targeted graphical fidelity.

Honestly, the way some people act you'd think indie devs should take a vow of poverty.

 

[Interficium]

This is only true if you are looking very narrowly at a few successful companies, for a few recent years. Publishing has been a brutal business, E.g., Acclaim, THQ, Atari SA, 3DO, Crave, Majesco. Even the successful companies today had some precarious times, EA was a losing hundreds of millions a year for years in a row around 2008.

Shhhh, don't disrupt the "publishers are cartoonishly-evil scrooge mcducks swimming in money pools" narrative.

 

[jstripes]

Eh, you see all sorts of pushback on the internet questioning why things like the small 5 person indie team example need a million dollars to make their game.

People understand in an abstract sense that videogames are expensive to make, but they don't really grasp how that scales upwards or downwards to teams of different sizes and how it functions mostly independently of things like a game's targeted graphical fidelity.

Honestly, the way some people act you'd think indie devs should take a vow of poverty.

It's the culture of Steam Sales and 99 cent apps.

 

[nynt9]

Shhhh, don't disrupt the "publishers are cartoonishly-evil scrooge mcducks swimming in money pools" narrative.

Yeah video games are a very low margin business compared to some other comparable industries for many reasons, including the ones I outlined in my post at the top of the page.

 

[ItWasMeantToBe19]

Why do software designers have to move out to California or Seattle instead of staying in North Carolina and programming and taking meetings from home?

What are the efficiency issues that would justify having to pay someone so much more in San Fran and pay for rent in San Fran?

 

[Haint]

That number is before California costs anyway. You want to pay health insurance and whatnot to your employees. Software engineers are expensive. There's electricity and other expenses, office supplies, some baseline rent, etc. It can easily run up. You want to pay your devs a livable wage, and you also don't want to work them 100 hours a week. Man hours aren't free.

And it will only keep increasing, while game prices stay stagnant. Yet the demand for art and acting also keeps increasing, so keep that in mind when criticizing monetization models of games. The money for all that content and polish needs to come from somewhere. Games have been $60 for decades yet they're so much more expensive to make now.

Again, little to none of that applies to a small indie project. Many of them work from home or have a very cheap/small place off the beaten path and they're willing to accept much reduced salaries by field standards (be it cause they're young, it's a passion project, or they want the experience/credits from their resume).

 

[nynt9]

Why do software designers have to move out to California or Seattle instead of staying in North Carolina and programming and taking meetings from home?

What are the efficiency issues that would justify having to pay someone so much more in San Fran and pay for rent in San Fran?

Where the talent pool is, networking, you can find voice/performance actors, and many other reasons.

Again, little to none of that applies to a small indie project. Many of them work from home or they have a very cheap/small place off the beaten path, they're willing to accept much reduced salaries by field standard (be it cause they're young, it's a passion project, or they want the experience/credits from their resume).

Ah, yes, the work slave labor for "exposure" argument. That only applies to tiny indie teams, only works for like one game or two, and makes games take very long to finish. It's not a sustainable model. If you're trying to be a serious video game development studio you can't do that. You also can't employ talent by telling them you won't pay them a livable wage.

We even have a thread making fun of that argument
http://m.neogaf.com/showthread.php?p=245618000

 

[senj]

Maybe move operating locations to cheaper places like NC.

There's not as much of a hiring pool for devs and digital artists in NC, because they've all moved to areas where companies offer higher salaries, or they're just working remotely for said companies. The ones who remain aren't generally the pick of the litter.So you'll have to offer a high salary to lure good developers...

Basically, you've got causation backwards. Software companies aren't dumb for being located in a high-expense area like San Francisco -- San Francisco is a high-expense area because all of the software companies are located there. Move them all to NC, and NC will become a high-expense area.

 

[Interficium]

Why do software designers have to move out to California or Seattle instead of staying in North Carolina and programming and taking meetings from home?

What are the efficiency issues that would justify having to pay someone so much more in San Fran and pay for rent in San Fran?

I'm sure North Carolina is nice and all, but....

These threads are always amusing for the posters who are like "Why don't they just...." or "Why can't they..." as if they've arrived at some really obvious simple solutions that have never been thought of before.

 

[senj]

Why do software designers have to move out to California or Seattle instead of staying in North Carolina and programming and taking meetings from home?

What are the efficiency issues that would justify having to pay someone so much more in San Fran and pay for rent in San Fran?

(I do remote software work)

There's a couple of factors:

1) Many old school managers (and quite a few new ones) are convinced that you can only be productive face-to-face, so the pool of companies willing to hire remote is smaller.

2) If I lived in San Fran and my job went under, or I just wanted a new one, I could have 5 good offers tomorrow. To find 5 good remote offers will take me a lot longer. A lot of people don't want that extra risk.

 

[Kill3r7]

Why do software designers have to move out to California or Seattle instead of staying in North Carolina and programming and taking meetings from home?

What are the efficiency issues that would justify having to pay someone so much more in San Fran and pay for rent in San Fran?

I would guess most PMs probably try it once or twice and once things go sideways they will never consider it again. Also to be fair, face to face works better during crunch.

(I do remote software work)

There's a couple of factors:

1) Many old school managers (and quite a few new ones) are convinced that you can only be productive face-to-face, so the pool of companies willing to hire remote is smaller.

2) If I lived in San Fran and my job went under, or I just wanted a new one, I could have 5 good offers tomorrow. To find 5 good remote offers will take me a lot longer. A lot of people don't want that extra risk.

.

 

[Chris1]

An average of $10k a month sounds way too high to me, I'm guessing this figure is US specific where benefits like healthcare would add a hefty sum to each person

 

[ItWasMeantToBe19]

I'm sure North Carolina is nice and all, but....

These threads are always amusing for the posters who are like "Why don't they just...." or "Why can't they..." as if they've arrived at some really obvious simple solutions that have never been thought of before.

No, I'm really wondering this with a lot of different areas of the American economy right now. Software is a job that can be done well from home and yet the American economy has concentrated its software industries in certain cities with extremely high housing costs instead of allowing people to work in a more affordable area. I'm not a programmer and can't claim expertise, but this is super confusing to me.

 

[Kill3r7]

An average of $10k a month sounds way too high to me, I'm guessing this figure is US specific where benefits like healthcare would add a hefty sum to each person

Employer costs not employee pay. Also, presumably US/UK centric.

 

[firelogic]

Paying people is expensive. No surprise there. The real problem with game budgets is the marketing budgets that cost more then the entire development team for three years. In an era when a couple of streamers have more impact on sales then entire TV commercial ad campaigns, the marketing budgets are where studios should be slashing to improve their bottom lines. Targeted, selective marketing works much better in this day and age then massive ad blitzes.

Streamers only influence gamers who are already in the know. TV commercials, billboards, posters, trailers in front of movies, etc...reaches people who aren't on gaming forums all day. If you cut all that out and just relied on Twitch to advertise your game, you'd be eliminating the majority of your audience. Mom/dad/uncle/grandparents/aunts aren't watching Twitch.

 

[Tounsi_Tag]

TR 2013 had some issues for a bit. It popped up at E3 a year or two prior and was supposed to come out shortly afterwards...then fell off the map and came back.

Comparatively, ROTTR came out two years later--an insane turn-over for an open world game that does as much as that game did. There's no way the costs were equal.

I was more surprised with the marketing aspect directly prior to both games' launches. TR 2013 was EVERYWHERE and sold pretty well despite SE's discontentment
ROTTR fell under the radar and SE acted like they didn't care

 

[Aselith]

If this is accurate, some games are REALLY expensive.

If that's accurate, it seems like most games are way south of $100 million so his story comes off a little overblown. Horizon is number 35 and it's only showing the budget at 47 million. And that's a AAA game with a big team.

If 47 million gets you on the list, $100 million isn't the norm.

 

[nynt9]

An average of $10k a month sounds way too high to me, I'm guessing this figure is US specific where benefits like healthcare would add a hefty sum to each person

Cost to employer is generally considered to be 1.25-1.5 of salary. Software engineers can make like $90-100k in even entry level positions so this isn't absurdly high.

 

[ItWasMeantToBe19]

If that's accurate, it seems like most games are way south of $100 million so his story comes off a little overblown. Horizon is number 35 and it's only showing the budget at 47 million. And that's a AAA game with a big team.

If 47 million gets you on the list, $100 million isn't the norm.

This is a list of disclosed budgets.

If you spend $150M, you often don't brag about it.

 

[Haint]

Where the talent pool is, networking, you can find voice/performance actors, and many other reasons.



Ah, yes, the work slave labor for "exposure" argument. That only applies to tiny indie teams, only works for like one game or two, and makes games take very long to finish. It's not a sustainable model. If you're trying to be a serious video game development studio you can't do that.
We even have a thread making fun of that argument
http://m.neogaf.com/showthread.php?p=245618000

You can make fun of it all you want, but you'll look stupid in the process. Small businesses have to operate within their confines. This is not limited to the videogame industry. Unless you're willing to pay $2000 to have a plumber unclog your toilet, $300 for your haircuts, or $130 for your Italian meals, not every business can operate at this $10,000/head utopia you seem to be advocating for. People launching Kickstarters are not established publishers, many of them are probably burned out ex-AAA developers who are willing to take concessions for lower pressure/stress work.

 

[HP_Wuvcraft]

....Was it really such a mystery or something?

Some people think video games are made by sprinkling pixie dust on the ground.

i.e. they have no idea and act think they do, and get mad when you actually try to engage them.

 

[Not Spaceghost]

Some people think video games are made by sprinkling pixie dust on the ground.

i.e. they have no idea and act like they do, and get mad when you actually try to engage them.

To be honest people who have never had a job where they're working on a project have no idea how most of these things are structured. They don't realize that the budget isn't like 33% graphics, 33% gameplay, 33% music or whatever, but rather it's basically like 45% salaries, 15% employee overhead, 40% additional costs (events, licencing, marketing, software, etc.). Obviously this break down is based on my own experiences and it varies from field and project type but the idea is the same.

A lot of people think that if you put enough money into the graphics box suddenly the game comes out looking like Horizon, and if you put enough money into the development box then it then it comes out even sooner.

 

[Maddness]

10k per head a month is an old figure too. It's been that way since the early 2000's. It's probably even more at this point.

 

[LegendofLex]

No, I'm really wondering this with a lot of different areas of the American economy right now. Software is a job that can be done well from home and yet the American economy has concentrated its software industries in certain cities with extremely high housing costs instead of allowing people to work in a more affordable area. I'm not a programmer and can't claim expertise, but this is super confusing to me.

High population = large pool of talent
Large pool of talent = more good jobs
More good jobs = high demand to live there
High demand to live there = high housing costs
High housing costs = more population growth in lower-cost suburbs
Population growth in suburbs = high population

It's "easier" to just go where the talent is than to recruit remote folks.

 

[nynt9]

You can make fun of it all you want, but you'll look stupid in the process. Small businesses have to operate within their confines. This is not limited to the videogame industry. Unless you're willing to pay $2000 to have a plumber unclog your toilet, $300 for your haircuts, or $130 for your Italian meals, not every business can operate at this $10,000/head utopia you seem to be advocating for. People launching Kickstarters are not established publishers, many of them are probably burned out ex-AAA developers who are willing to take concessions for lower pressure/stress work.

How is working with no health insurance, no set hours (the longer it takes for your game to finish the closer you are to bankruptcy so you have to work a lot) and a minimal salary low pressure/stress?

 

[ASaiyan]

If this is accurate, some games are REALLY expensive.

Dang, Battlefront II had better be good!

I had no idea the original Pokemon games were that expensive. I'm guessing that's all marketing spend though, lol.

 

[Memento]

I would love to know numbers from Sony games. I wonder which is their most expensive project. Uncharted 4 I would say.

 

[AbortedWalrusFetus]

$10,000 a month, assuming 160 hours a month that's $62.5 per hour, which includes benefits and overhead, which is about as much as your salary is so your average salary per hour is $31.25, or about $65,000 per year. Seems low for my industry but I hear the pay is low and the workforce is particularly junior so that makes sense I guess.

$65k is barely enough to pay an entry level software developer these days. It's not just low for developers, it's extremely low. I know some of that is going to be offset by other lower demand/salary skills though.

 

[Ahasverus]

I honestly think lots of costs could be greatly reduced if tools were more mature. Almost every game means starting from scratch, and that's ridiculous.

Project planning also seems like a mess.

 

[jdmonmou]

For extremely popular games like GTA 5, those costs are made up in the first few days of sales so I don't think the industry is in crisis of imploding because of the high cost to make games.

I wonder how people feel about more early access and episodic games to help recoup costs earlier in the developer cycle. That has pros and cons as well, but it seems like there's a greater chance of the developer making something that the audience likes by getting their feedback much earlier in the process.

 

[senj]

You can make fun of it all you want, but you'll look stupid in the process. Small businesses have to operate within their confines. This is not limited to the videogame industry. Unless you're willing to pay $2000 to have a plumber unclog your toilet, $300 for your haircuts, or $130 for your Italian meals, not every business can operate at this $10,000/head utopia you seem to be advocating for. People launching Kickstarters are not established publishers, many of them are probably burned out ex-AAA developers who are willing to take concessions for lower pressure/stress work.

If clients offering your plumber $2000 to unclog a drain were a dime-a-dozen, then yes, you'd have to expect to pay small business plumbers that much to unclog your drain.

If you're a developer talented enough to deliver on a kickstarter project in the first place, I promise you can find a low-pressure, low-stress job offer at a slight discount off market norms -- $90-100k instead of $120k will get you there easily.

Insist that "Kickstarter devs ought to work at a steep discount"and you're going to end up with a lot of unfinished projects when devs get tired of being screamed at by internet nerds for not working fast enough for dirt pay, and decide to double their salary to work 35 a week for random chill company that is desperate for a developer to come in and maintain their payroll app or workflow tool or any of the thousands of chill job openings out there.

 

[Aztechnology]

An increasingly crowded market where marketing costs on big titles are higher by a large margin than the cost of development certainly doesn't help.

I know Wikipedia isn't a great reference to use always, but just as a snapshot it's always interesting to look at. Basically what it looks like is the marketing side of things is where you want to be lol.

https://en.m.wikipedia.org/wiki/List_of_most_expensive_video_games_to_develop

 

[Dremorak]

Each person costing 10k a month???

Maybe where you shop

 

[family_guy]

There's not as much of a hiring pool for devs and digital artists in NC, because they've all moved to areas where companies offer higher salaries, or they're just working remotely for said companies. The ones who remain aren't generally the pick of the litter.So you'll have to offer a high salary to lure good developers...

Basically, you've got causation backwards. Software companies aren't dumb for being located in a high-expense area like San Francisco -- San Francisco is a high-expense area because all of the software companies are located there. Move them all to NC, and NC will become a high-expense area.

Seems counterproductive when you get paid a higher salary, but your living expenses impact that significantly. Everyone wanting to setup shop in places like LA and San Francisco are just trying to keep up with the Joneses. Talent is everywhere. Let's not pretend like the cream of the crop are working on most projects. People burn out and there are more juniors out of college than senior staff working on these projects. These large corporations want young talent that they can pay significantly less for. I'm not saying everyone should relocate to one place. They should spread it out across the country. Companies like Google have branches in multiple cities.

 

[Justin Bailey]

Yep, something's gotta give eventually. Either $60 price tag goes up, business models change (games as a service), or lower cost games start taking over. We're already seeing the latter 2.

 

[DoctorDake]

Yep, something's gotta give eventually. Either $60 price tag goes up, business models change (games as a service), or lower cost games start taking over. We're already seeing the latter 2.

I'd argue we're seeing the first one as well. I can't think of a $60 game that doesn't launch now with an $80 and $100 version alongside it full of extra features/exclusives/etc. The age of "Digital Deluxe" editions means that if you want the actual launch content, you have to pay more than $60.

 

[family_guy]

$65k is barely enough to pay an entry level software developer these days. It's not just low for developers, it's extremely low. I know some of that is going to be offset by other lower demand/salary skills though.

I think that largely depends on where you live. Typically for the work load that you have as a game developer, that is pretty low. There are people who can make that kind of money as developers in other industries while putting in an average of 40 hrs a week. The people that still want to make games knowing this are doing it moreso for the passion than the money.

 

[TyrantII]

Not suprising seeing the total man hours dumped into these games development cycles.

What's even more amazing is that game prices have been relatively flat since the 90s, and in many cases have decreased, even more so factoring in inflation, compared to other goods and services.

Gaming as a hobby is dirt cheap, while the product has grown more expensive to produce.

We've been lucky industry growth had allowed that to happen.

 

[Justin Bailey]

I'd argue we're seeing the first one as well. I can't think of a $60 game that doesn't launch now with an $80 and $100 version alongside it full of extra features/exclusives/etc. The age of "Digital Deluxe" editions means that if you want the actual launch content, you have to pay more than $60.

True that. I mean, look at this.

SNES games around 25 years ago. Of course this was unsustainable.

 

[gogosox82]

10K a month? What? That seems ridiculously high.

It sounds low to me. Devs literally make poverty wages when you consider how much schooling they had and what their peers in the tech industry make.

 

[TheThreadsThatBindUs]

$144m for a 400 person team for 3 years sounds like a GROSS oversimplification.

Outside of MMOs (and maybe Star Citizen—lol) no game requires a 400 person team working only on that game for a full three years.

400 person studios will have multiple games in the development pipeline, in various stages of completion, at various sites.

All of those 400 people will not be working on just one game for a full 3 years, but those 400 will be spilt into different teams whose expertise are leveraged on different projects throughout those 3 years.

His $10k per person per month figure in probably accurate for small to mid-sized teams, but when you start talking about 400 person teams, you're talking about multi-site, multi-project, sometimes multi-studio affairs that start to look more like he development stable of a publisher than a single developer. The cost breakdown to produce a single game is thus much more complicated than just: no. people x development time x cost per person per time.

 

[brad-t]

Why video games cost so much to make ... presents one piece of data.

Thanks, chief! Good article!

You've presented how much a unit of time costs. Maybe work on figuring out why there are so many units of time. Why does it take 3 years to develop a sequel, for example? Particularly, a same-generation sequel? The cost of developers is what it is, the process of game development is why games cost so much.

You picked the wrong journalist to take to task for not being thorough enough. Not every blog post can be an exposé or in-depth research project. What was shared was interesting and noteworthy.

 

[senj]

Seems counterproductive when you get paid a higher salary, but your living expenses impact that significantly. Everyone wanting to setup shop in places like LA and San Francisco are just trying to keep up with the Joneses. Talent is everywhere. Let's not pretend like the cream of the crop are working on most projects. People burn out and there are more juniors out of college than senior staff working on these projects. These large corporations want young talent that they can pay significantly less for. I'm not saying everyone should relocate to one place. They should spread it out across the country. Companies like Google have branches in multiple cities.

Nothing you're saying is a surprise to either the people who run software companies or the people who work for them, so that's probably a good indication that you're missing some reasons that they continue to not do what you think they should do.

A few points:

1) Clustering helps the talent pool if you're not a company that's comfortable remote (and most companies are not comfortable with remote). Big companies can pay relocation fees, but startups don't have that kind of cash -- so they all cluster around a big corp and try to lure its employees away with equity promises and a looser workplace. That's how San Fran became San Fran in the first place.

2) As an employee, it would be terrible if employers were spread out -- now I have to move between states every time I want to change jobs? This is an industry where the accepted way to get a raise is to go somewhere else -- mean-time-between-changing-employers is something like 2-3 years. Having to move states every time I change jobs would cost me money, not save me anything.

3) Housing costs in the valley are awful, but if you don't have kids you're probably still coming out ahead. A one bedroom in Raleigh average $1200 a month and $3700 in San Fran. But Glassdoor says the average dev in Raleigh is making $70k and the average dev in San Fran is making $101k -- you're paying $30K more in rent, for $30K more in salary, so it's a straight wash, but you have way way way more potential employers, so it's a lot easier to find a new job with higher pay in a year or two. Buying a house would be way cheaper in Raleigh than in San Fran, but I'm not going to buy if employers are all over the place and I have to move every few years. There's no incentive for me to limit potential employment pool to that of Raleigh.

(And this generic developer search on Glassdoor is really friendly to Raleigh -- go into a more specific subset, like "Ruby on Rails dev", and the numbers strongly favor San Fran -- $135k average vs $79k in Raleigh. $30K more in rent for $55k in pay is a good deal)

 

[Memento]

It sounds low to me. Devs literally make poverty wages when you consider how much schooling they had and what their peers in the tech industry make.

How is $10k a month low?

 

[Niceguydan8]

It sounds low to me. Devs literally make poverty wages when you consider how much schooling they had and what their peers in the tech industry make.

How is $10k a month low?

It would do you both a lot of good if you read the actual article and understood where the $10k/month comes from.

Hint: It's not just their wage.

Also, a theoretical $120k per year is not low at all, even given their education requirements.

 

[napata]

How is $10k a month low?

Read the thread. It's been explained.

 

[zelas]

It sounds low to me. Devs literally make poverty wages when you consider how much schooling they had and what their peers in the tech industry make.

Poverty wages??? Yes they could make more if they got into another industry but come on. There are people with just as much schooling who make less.

How is $10k a month low?

Read the article. $10k isn't just the cost of salary.